Opening remarks by IDB President Luis Alberto Moreno at Second Strategic Partners’ dialogue meeting hosted by the Opportunities for the Majority Initiative.
It is gratifying to see all of you gathered here today, representing diverse organizations, approaches, ideas and structure of resources. Many of you have been pioneers and innovators in what is now our common endeavor. The IDB is fortunate to count you among its allies and is proud of its association with all of you here today.
The purpose of this meeting is to strengthen and focus our dialogue so we can work together better. Unite our resources, share our ideas and achieve a greater impact. Our group here is very diverse. It is not often that we would sit together at the same table. So today is an opportunity to demonstrate that our diversity is a strength from which we can forge a common agenda, enhance our resource platform and create better solutions, whether they are for projects or research.
I’d like to begin by saying just a few words about the earthquake in Haiti last month. I traveled to Port au Prince shortly after it happened, to see conditions for myself, and to start the process of getting the IDB involved in relief and rebuilding. We have set up a special task force to coordinate all of the Bank’s efforts, and we are already helping bring cash and other materials into the country and advising Haitian authorities and NGOs on the ground. Haiti will receive billions of dollars in aid from foreign governments and international organizations in the coming years, but the private sector will also have an important role to play in Haiti’s future. Haiti needs everything now: homes, communications networks, utility systems, government buildings, financial institutions, schools, hospitals, shops, factories – the list goes on and on, and private sector investment is badly needed. I’m sure many of you are already thinking about what you can do. As we share ideas and resources we can build on what we have achieved already, take the lessons we have learned elsewhere, and get Haiti and the rest of the world engaged with each other at long last.
The idea of considering the base of the pyramid as a springboard for development and not as an economic obstacle is still a relatively recent one but cases like Haiti bring this concept to the forefront. Across the globe, proponents of sustainable development are pioneering new products and services that can offer low income populations tools for reducing vulnerability and/or enhancing socio-economic well-being. Targeting this market gives the international development community a framework for concerted action. At the IDB, we have established a permanent structure to make this concept a reality through the Opportunities for the Majority initiative.
Luiz Ros and his team from Opportunities for the Majority have been on the forefront in the design of market-driven social innovations and in helping to demonstrate to all of us that socially-oriented products and services can, with appropriate early stage support, deliver the next generation of commercially scalable and replicable activities that benefit low income-markets.
Navigating this new “investment space” is complex, however, and what is exciting is that we are seeing more organizations and development finance institutions coming to the IDB to learn from our experience with Opportunities for the Majority. We applaud these efforts and hope that the information and recommendations made today will contribute to the successful growth of important new initiatives and models to serve the base of the pyramid. We all know that in order for pioneering social investments to make the leap from interesting pilot to commercial, replicable and scalable business models, they require innovation support and assistance.
We are aware that now, more than ever, during this time of world financial and economic crisis, majority markets in both developing and developed countries represent a significant asset in our recovery and return to growth. We can use it to create quality job opportunities, provide responsible consumer credit, expand lending to entrepreneurs and improve housing opportunities.
Our shared mission has never been easy. Among our challenges are mobilizing resources from both entrepreneurial, non-governmental and public sectors and convincing diverse actors to work together as a team.
We believe the IDB is the ideal platform for this dialogue. Forging coalitions and partnerships is a central task of our Opportunities for the Majority initiative, which is backed up by a $250 million financing facility dedicated exclusively to supporting investments in majority markets in association with local and international partners. We have already invested over $100 million in new business models and innovative projects that we feel show terrific promise. Some of our distinguished partners will share some of their experiences and models today. Pilot projects and innovations will continue to receive IDB support. But perhaps now, this historical moment of great challenges is the time to think about working on a significantly larger scale.
Taking advantage of what we call “platforms” – through agreements with those existing networks with great capillarity in low-income populations – will multiply the impact of our resources, benefitting millions of individuals as opposed to only narrow population sub-segments. For instance, we may think about how to exploit the development role of millions of low-income families in Brazil, Mexico and other countries who receive cash transfers as incentives for school attendance and preventive health. Rather than consider these recipients as victims, they can be viewed as enablers. Why? Because they are developing positive track records as citizens that can help them gain access to bank accounts, micro-cards, credit cards and debit cards. Obtaining this kind of financial identity has been proven to result in higher incomes and living standards. We call this “financial democracy.” By whatever name we choose to call it, its importance is undeniable. Expanding the opportunities for majority markets should be front and center in our efforts to restore the world economy to financial health and to lift vast sectors of the population to a higher living standard.
Beyond mentioning some of the new directions in the Bank’s current thinking, I want to emphasize that above all else, the IDB is here to listen to you. We have more than an academic interest in your ideas. We have a stake in them. We depend on the constant flow of new ideas, concepts and approaches to continually refine and improve our mission. Our purpose here is to keep this dialogue moving in an ever more productive direction.
In challenging times like these, we are more inter-dependent than ever before. At the IDB, we have the structure and resources in place to make good on our long-term commitment to consistently channel investment to majority markets, giving prominence to the private sector. Yet we also know that we don’t have the capacity to go it alone. No single organization does.
Washington, D.C., February 9, 2010
