Making the difference to the BoP

“ How to achieve sustainable impact to the BoP through PSD and Development Aid”

A focus on Latin America & value chain integration

Latin America is a region that is characterized by its socioeconomic growth potential. With leading countries such as Brazil, Chile, Peru and Colombia, the region has enabled improvement in competitiveness, infrastructure, international trade partnerships, strengthening of regional and national financial market systems, state reforms and modernization, hereby making improvements in reaching the small & micro enterprises which are growing in numbers, contributing to job creation, economic activity and the gross domestic products of the countries.

Economic growth in the region goes hand in hand with reforms in access to land and means of production, decent wages and international trading opportunities. Healthcare and education facilities, promotion of civil society and attention to vulnerable groups are some of the preconditions for a sustainable development of opportunities in the countries.

The private sector plays a pivotal role, accelerating the pace in identifying new business opportunities in which it can partner with multilateral organization, financial intermediaries, nonprofit organizations, institutions and governments. Hereby creating a multi stakeholder engagement where the return on investment is not only profit, but moreover promoting the socioeconomic development of the region. Integrating for instance the low income communities into the value chain through a sustainable business approach. The private sector is increasingly investing time, knowledge and resources into strengthening local small enterprise networks that show promise to become suppliers or otherwise participate in the supply chains. Besides the traditional sectors as agriculture and natural resources, there is a growing demand for investments and innovation in the fields of renewable energy, clean technology, waste management, innovative production technology, financial services, telecom and media as to logistics.

The opportunities in the rural areas of the region are in need of a different structure and approach on poverty alleviation and productive integration. Focusing on themes like (sustainable) agriculture, renewable energy, climate change and access to basic services. A strategy which is based on four key principles:

(i) Sustainable exploitation of the competitive advantages of a region or territory;
(ii) Enhancement of the ability of local productive systems to participate in value chains;
(iii) Involvement of private enterprises as investors;
(iv) Economic inclusion of the local population, particularly the poorer social sectors.

For low-income communities to be able to compete in the global market, it will be an advantage to collaborate with investors and private enterprises that have the linkages to the markets, expertise and technology to transform and add value to their products. Knowledge sharing by exchanging information and strategies and improving the quality of initiatives through learning from shared experiences will help generate a consistent and sustainable impact in low-income communities, not only at the level of local producers, but within the region and in the wider international business community and its counterparts.

Investment in multi-stakeholder collaboration – which must include local NGOs and link with (local) authorities, local businesses, financial institutions, educational facilities, etc. – must be geared towards enhancing sustainable development and socioeconomic opportunities (in terms of entrepreneurship, business, spin-offs). Environmental sustainability may be enhanced through the introduction of a methodologies and requirements for business partners for organic certification and measurement of greenhouse gas emissions. The international joint ventures and the initiation of a multi-stakeholder process are expected to set an example which will have a positive impact.

The Dutch development agency ICCO is engaged in promoting and supporting the multi stakeholder approach, hereby collaborating with European enterprises, Multilateral Institutions, foundations, local civil society organizations as the local business community in Latin-America. Hereby focusing on niche opportunities in agribusiness, waste recycling, renewable energy and more. Bottom line is to provide an sustainable outcome for the base of the pyramid.