Lessons from the Private Sector

Reaching out to smallholder farmers in remote areas has
always been a significant challenge for value-chain based development
interventions. I hit this stumbling block while working on my task of
incorporating UNGP on Human Rights in the commodity value chains as a part of
my internship. Devoid of ideas, I started to reflect on my experience working
for the private sector in sub Saharan Africa.

I recalled that way back during one my work trips to a
remote village in East Africa, I had encountered difficulty to buy a bottle of
water but a bottle of Coca Cola was readily available. This had impressed me a
great deal and had made me wonder how this incredible reach was achieved.

Historically, in the development world, the private sector
has been looked upon as greedy and turning a blind eye to human and resource
exploitation across its value chains. The singular motive of the private sector
is seen as profit maximization and it is believed that very little attention is
paid to how the profit is secured. Any association with the private sector has
been looked at suspiciously and the nonprofit world has wanted to keep the
sector at an ‘arm’s length’.

But, is private sector all that bad? Is there anything at
all to learn from their workings?

I am deeply drawn towards an excellent TeD Talk by Melinda
Gates in 2010 ((https://www.youtube.com/watch?v=GlUS6KE67Vs)
where she expresses amazement at the working of Coca Cola. She wonders how if
coke is able to deliver their products to remote communities, the governments
and NGOs are not able to do the same. According to her analysis, the coke
network produces regular data which is used to measure progress and suitable action
is taken on that basis – a clear loop of timely information flow. This
comparison amazes me. I remember being part of a large livelihoods program in
West Africa where we were struggling to get information even about basic
program implementation by year three. So often the information comes in when
the program is almost complete allowing very little opportunity to make any
course correction. The effectiveness of the programs is greatly curtailed by
this information lag. The problem usually lies in viewing evaluation as a
post-facto activity rather than an ongoing process. Evaluation is continued to
be seem as an activity that lets the donors know how well the program was
implemented after its completion. It is rarely seen as a tool for ongoing
analysis to review implementation strategy and effect changes. The outcomes of
evaluation become good tools for future program implementation but very rarely
for the ongoing one. This has to change. Information flow cannot be just from a
‘mid-term’ or ‘final’ evaluation but should be continuous to enable the program
to be dynamic.

Credit: Changemakers.com
(medicines piggy backing coca cola network)

Changemakers.com (medicines piggy backing coca cola network)

Again in my private sector life, we have often worked on
extensive agricultural commodities buying operations that extended to over two
hundred villages, most of them remote. We still were able to reach small
producers through a network of financed small agents, with tremendous success.
The model of coke seems to be similar where they train and finance local
entrepreneurs who act as micro-distributors for their products. The success of
the approaches can be clearly attributed to a great understanding of the ground
realities in these communities and coming up with a relevant strategy to
overcome the constraints. Each environment may pose different challenges and
merely coming with a general plan of action may not result in success. One of
the major challenges of agricultural value chains programs is how to reach
small holder farmers in a cost effective manner. In many cases the programs
ignore this segment and focus on ‘larger’ farmers from ‘larger’ villages who
are easier to target. This is where the need for creativity arises. The
solutions should be custom designed rather than one-solution-fits-all approach.
I have seen some NGOs use the distribution network of the private sector to
distribute mosquito nets to some remote communities. With the advent of technology,
some programs have started using mobile technology to reach out and provide
solutions to these otherwise remote communities. This should become a rule
rather than an exception.

An interesting example of harnessing the advantages of the
private sector network is the work of ColaLife. ColaLife uses the same principles and
networks that Coca-Cola and other commodity producers use, to open up private
sector supply chains for a new, easy-to-use,
affordable anti-diarrhea kit, containing oral
rehydration salts (ORS) and zinc supplements. The work began with the concept
of using space in Coca-Cola crates – but has extended into a range of innovations, some based on Coca-Cola’s expertise and networks – but
many based on questioning the status quo. (see pictures above)

  Credit: Technoserve

We are seeing many changes in how private sector is being
viewed now. The newly ratified Sustainable Development Goals (SDGs) is
recognizing the importance of the private sector and is advocating a larger
role for the sector. It is important to view the private sector not just as a
source of resources but to learn from some of their approaches and tools that
have made them successful which could be extremely important for effective
development interventions.

“Thirumalai Parthasarathy is an intern at our private sector unit. When he is not all serious about his work he is a fun loving guy that is always joking around, laughing and cheering everyone around him up.” 


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