Earlier this month (11-14 June), the Inter-American Development Bank (IDB) hosted a major international conference called "Building Opportunity for the Majority." The "majority" refers to the base of the economic pyramid (BOP), a socio-demographic designation describing both the development needs and the market potential of about 4 billion people worldwide who live in near-poverty or poverty conditions. The event highlighted new IDB president Luis Alberto Moreno's commitment to reform the bank's policy and concentrate on serving low-income communities. Among those in attendance were former United States President Bill Clinton, Peruvian economist and author Hernando de Soto, Telmex Chairman Carlos Slim, and MIT Media Lab guru Nicholas Negroponte (founder of the One Laptop per Child association).
During the conference, IDB president Moreno laid out a plan to empower the majority of Latin America, where 70 percent of the population (361 million people) is considered part of the BOP. His plan includes loans for small and medium-sized businesses, increases in job-training funds, and greater financial support for infrastructure projects that directly benefit low-income communities. President Moreno's plan constitutes a major effort by a multilateral development bank to actively engage the majority of its stakeholders using private sector-led strategies.
Companies' engagement of the world's poor as consumers and producers, in Latin America and elsewhere, does not have to be mutually exclusive to environmentally-sustainable development. BOP communities often lack adequate water, energy, sanitation, housing, and - most of all - jobs. Integrating low-income communities into the economy can generate economic growth, and, in theory, as the economy grows, so does technology adoption, helping once-unsustainable communities consume efficiently and reduce waste while increasing living standards. Several successful BOP entrepreneurs have already demonstrated that it is possible to provide clean water, clean energy, improved sanitation, and better housing while generating profits.
A new WRI publication entitled "The Market of the Majority," launched at the IDB conference, is among the first efforts to systematically and quantitatively document the size and scope of the BOP. The report analyzes markets in 20 Latin American countries, utilizing household income and expenditure survey data and a methodology developed in partnership with World Bank and IDB economists. WRI's analysis defines the BOP as those earning less than $3260 USD (PPP, 2005) per year. By this definition, the Latin American BOP (361 million people) constitutes a spending potential of $510 billion USD.
"The Market of the Majority" in English
"El Mercado de la Mayoría" en Español
In addition to "The Market of the Majority," the exploration of BOP issues around the world is the primary focus of WRI's NextBillion.net. NextBillion.net features analysis, commentary, research, BOP news, a searchable activity database, and a BOP events page updated daily by a team of BOP experts. The site also allows users to post comments and write stories about their own BOP research and experiences.
Recent related content updates to EarthTrends include nine new feature stories on poverty and economic governance taken from the World Resources 2005 report and updates of poverty indicators in the searchable database.
RELATED LINKS
Mapping the Majority
A web-based interactive tool that allows users to analyze 58 indicators related to the BOP in Latin America and "to explore the degree of inclusion and living conditions of different segments of the population."
Base of the Pyramid Protocol
"A pioneering business incubation process that enables multinational corporations (MNCs) to generate new business opportunities at the Base of the Pyramid."
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