Announcement made by IDB President Moreno during First Forum for the Development of the Base of the Pyramid in São Paulo
SÃO PAULO, Brazil – The Inter-American Development Bank Group (IDB Group) plans to double investments to develop businesses that provide solutions to improve living conditions of people living at the base of the economic pyramid across Latin America and the Caribbean.
The IDB, through its Opportunities for the Majority Initiative ( OMJ ), plans to double annual investments to $100 million as of 2012 to support the expansion and development of businesses that provide high-quality goods and services and improved earning opportunities for the region’s low-income population, IDB President Luis Alberto Moreno said during the First Forum for the Development of the Base of the Pyramid in São Paulo.
“About 360 million people in the region, or 70 percent of the population, are underserved and pay very high prices for services such as health, education and housing,’’ said Moreno. “Governments and civil society cannot meet these demands alone. There is a tremendous opportunity for the private sector to provide market-based solutions to enhance the living standards of this important segment of the society and help combat poverty.”
Created three years ago, OMJ has invested over $160 million to develop profitable business models serving the needs of the Base of the Pyramid, a $500 billion a year market in Latin America and the Caribbean. Projects backed by the initiative range from supporting companies in the actual provision of goods and services specially tailored for the segment to projects that allow small-scale producers and merchants to enter the formal economy and participate in more profitable and sustainable value chains.
By 2015, more than 2.2 million people in the region are expected to benefit from the current 24 projects that are being financed by OMJ, according to Luiz Ros, head of the IDB’s Opportunities for the Majority.
“In recent years, Latin America and the Caribbean have made important strides to reduce poverty, paving the way for the creation of an emerging middle class that is eager to access better basic goods and services,’’ said Ros. “We are looking to finance business models that seek to integrate this low-income segment of society into the formal economy, improving their quality of life and promoting greater social inclusion.”
The First Forum for the Development of the Base of the Pyramid (BASE) is taking place in São Paulo on June 27–28. More than 500 government officials, business executives, development experts, civil society organizations and investors are participating in the event to discuss successful business models and upcoming trends for this transformative field in Latin America and the Caribbean.