Friday, July 18, 2008

Regarding A New Approach to Economic Development

On June 17, 2008 The Guardian published an article entitled "Latin America's poor provide rich pickings" which detailed a new approach for economic development in Latin America's most impoverished regions. COHA Research Associate Chris Sweeney wrote the following letter to the editor in response.

The Base of the Pyramid (BoP) approach certainly has the potential to bring economic development to the poorest areas in Latin America. This business model provides an effective way to bring essential goods and services to those most in need; it bypasses the inefficiencies of government aid by cutting out state involvement altogether. Still, BoP runs the risk that any market-led approach to development faces – the systemic continuation of an uneven class divide. The poor may benefit from newfound employment opportunities, but as long as the profits they generate are repatriated to wealthy multinational corporations, current inequalities will persist and even worsen. In the short run, BoP may be a positive step because it improves the living conditions of the poor by providing them with the chance to compete in the outer limits of the business world. However this is only a small step and not a sufficient solution. The challenge for the future will be to find a way to distribute not just wages, but profits more equitably.

Chris Sweeney; Research Associate
Council on Hemispheric Affairs

To read the full Guardian article, please go to:

No comments: