Archive for the ‘ASEAN’ Category

The Letter writer: Yesterday’s social mediators

Letter writer Mr Thangaraju s/o Singaram, who is 85 years old and was from Tamil Nadu, India.

Click to enlarge and read the stories of those who were lucky enough to have been educated when they migrated looking for work. They made their living helping others… as the Tamil letter writer Mr Thangaraju says, we weren’t just letter writers but counsellors, mediators and therapists, helping illiterate migrant labour keep their connections alive across the miles.

Vignettes from Singapore’s past: Independent Women

Look up more on Samsui women , pioneering globe trotting. independent employment for women.

The Samsui women were a proud and independent lot. Prostitution, opium peddling and various vices were common with other women mired in poverty. However, Samsui women chose to be engaged in hard labour with little pay instead of being lured into vices even if they paid more. They found employment in tin mines, rubber estates, on construction sites and as amahs or “domestic servants”. They were hired extensively at construction sites in the 1950s. They carried rocks, dug holes and conducted menial work that defied their small physical stature.

They wore a red head dress which became their trademark feature. The red head dress was a square piece of blood-red cloth folded in a way that it sat like a fairly large rectangular roof on their heads. Their hair was combed into a bun or “pigtail” or towchang and tucked under the red cap. The towchang was a mark of their spinsterhood. They dressed in a stiffly starched black samfoo (sometimes spelt samfu), a tunic-and-trouser suit, protected by an apron. The sandals they wore were pieces of rubber cut out from used tyres and fashioned on their own with a strap. 

Human centered systems design: Navigating complexity through flexibility

Drawing credit: JAM visualdenken

Systems designed for use by communities tend to operate differently from back end or operational processes. Its only natural given the unpredictable nature of crowds. I’m sure there are a lot of people looking into this field, with greater experience and knowledge than I.

However, I bring this up due to a recent event in an online community in which I have been participating actively since early 2007. And this experience made me reflect upon some of the issues that had emerged from the workshop we conducted late in November 2012 on sustainable agriculture value chain development for the lower income demographic in the developing world.

That trust is the key to success for any programme meant for a human population is unarguable.

The challenge is to establish the foundations for gaining, building and maintaining trust, that too with a large community or groups of peoples rather than individuals on a one on one basis. When technology is added to the mix as a mediator for communication flow, then one further layer of abstraction is added to the challenge, that of lack of nuance and meaning that body language and tone of voice, among a myriad other things, add to face to face communication.

Complicating this is also the difference in contextual knowledge – exposure and experience – between segments of the global population. The OECD world and its ilk, aka mainstream consumer culture, have been exposed to and immersed in a far more technological environment full of touch screens, apps, software and the ubiquitious Internet. While mobile phones are increasingly bringing the world to every human’s fingertips, one can hazard a reasonably accurate guess that the majority of the world’s lower income demographic residing in rural regions of the developing world probably will not possess the same or similar level of experience.

Thus, any human interaction system meant to reach this population must embody flexibility and responsiveness, in a consistent, close to realtime way, in order to build and maintain trust with the community. And one way would be to clearly establish the boundaries of the flexibility of the system, that is, the negotiable and the non negotiable. Feedback mechanisms are without value if the system itself is too rigid in its originating design or the responses too random or reactive.

Published! Pathways Out of Poverty by iBoPAsia Project

Innovating with the BoP in Southeast Asia.

The iBoP Asia Project has published the complete set of small grants funding innovation projects for those at the Bottom of the Pyramid in the ASEAN region. One of the first projects to win the Small Grants competition in 2008 was The Prepaid Economy Project: Understanding BoP household financial management.

Mapping global seasonality: national times of abundance and scarcity?

Connecting some dots made me think of this exercise. If national governments are increasingly looking at ways to bridge the informal economy with the formal, in order to provide more inclusive benefits to their citizens and at the same time there’s an increasing focus on providing inclusive financial services to those outside of the formal economy, then why don’t the overly large global institutions consider mapping national seasonality as a way to track regional abundance and scarcity?

Rather than applying existing metrics which result in a significant portion of the population slipping between the cracks, there is scope to develop measures of assessment where it is known that incomes are irregular, and tend to display seasonal patterns. This mapping need not be too granular in the first instance, even at country level it may be of help as another layer of information over the various surveys conducted.

India, for example, has long known the linkage between the state of her monsoon season and that year’s economic performance, even for organizations and people who are not directly connected to the land and its produce.  Recently, I did something similar for Kenya, mapping the ebb and flow of local income in three different regions and was able to arrive at a rough estimate for a nationwide time of abundance – a peak sales season, if you will.

Highly industrialized nations have detached themselves from the land and the natural seasons, thus the impact of the rains or the dry season on economic activity are barely perceived. In emerging economies and still developing nations where a greater proportion of the population is rural based and food security more vulnerable to weather changes, these elements can influence national GDP or consumer durable sales.

Whether its segmentation of rural markets for companies or policies of financial inclusion on a global scale, I believe this additional layer of information has the potential to provide some crucial nuances to information currently being analyzed, and found wanting.

Welcome to Bazaaristan: global informal economy being recognized

Street Vendor, Mombasa, Kenya (Photo credit: Niti Bhan)

Across the globe, 1.8 billion people — a quarter of the world’s population — work off the books each day. They are paid in cash for the goods they sell and the services they provide, and due to their ubiquity, there’s a word for these merchants in nearly every language. As Robert Neuwirth reports, in French colonies, they’re known  as débrouillards — self-starters, entrepreneurs, all outside the bureaucratic system. They might be vendors selling revolutionary goods in Egypt’s Tahrir Square, Nigerians selling mobile phones, or the guy down the street hawking flowers on the corner. Whoever they are, they work in the world’s fastest-growing economy: System D.

As Neuwirth writes, System D, slang for “l’economie de la débrouillardise,” is the crucial blackmarket, providing opportunities where the regulated global economy has failed. Its value is estimated at roughly $10 trillion, meaning, as Neuwirth points out, that, “If System D were an independent nation, united in a single political structure  — call it the the United Street Sellers Republic (USSR) or, perhaps, Bazaaristan —  it would be an economic superpower, the second largest economy in the world.” The Organization for Economic Co-operation and Development (OECD) predicts that two-thirds of the world’s workers will be employed in System D as soon as 2020. ~ Via Foreign Policy magazine

Reflecting on managing retail at the BoP

Sari sari shop owner evaluating price/SKU

When I think about my time in the Filipino village last year, the most significant learnings from the field are the ones I never really wrote about or pondered deeply at that time. They were too specific to retail, I felt, or business management, and while this shop was one of the sources of income for the household I was living with, was it crucial for cash flow or simply something for Fe to do in her spare time?

I had lots of time in the evenings since there was no internet access nor much to do here in the village and I thought I’d entertain myself by evaluating the inventory management, pricing and profit margins for the shop. After all, it wasn’t part of the main focus on the research but could provide insights into what it was like to run a shop like this.

Accompanying Fe to the nearest town where she stocked up on supplies at retail prices was an eyeopener. Sachets and single serve packages, small tins of food or even diapers – none of them was priced to be beneficial to the final reseller, instead their pricing was calculated on the assumption that whoever bought the product at the end of the manufacturers supply chain was the actual end user or household consumer. They are also buying here directly, sure, but I would wonder at the percentage of sales actually being made by sari sari, spaza or kirana type shops which are so ubiquitous among the BoP.

I found that standard practice is to simply add an affordable 2 to 3 peso markup to the product, rather than basing it on any percentage of the cost of the item or total cost of purchase. After all, when we went to stock up this shop, it cost us 7 peso each to reach the town, then spend another 15 or 20 hiring a modified motorcycle tricycle taxi to bring us back with the shopping all the way off the main road into the cluster of houses in the rice fields.

The shop was not making any money at all and just about staying in the black. It was a diversion for Fe, and I suspect a disillusioning disappointment as well, since she’d gone to the trouble of taking out a micro-finance loan to start it up. Although in this case, I’d arrived in late February and the region was still recovering economically and socially from the worst typhoon in 80 years which hit the previous June in 2008.

Analysing the situation I found that while she’d had first mover advantage in the walkable distance with her shop and also priced competitively with the main road shops further away, neighbours saw her success and rapidly copied. There were two other shops within hailing distance, neither of which was critical to their owner as a source of income. There’s a subtle hierarchy developing in this part of the The Philippines, based on the status of the migrant worker supporting the local family – was your remittance coming from a merchant seaman or a domestic servant?

Then I looked at the products themselves, trying to find a markup on the cost that would not only be reasonable and even attractive compared to “competition” but still offer some returns on the investment. That’s when I found that there was no rational basis for the pricing of sachets by P&G or Nestle vis a vis quantity available and purchasing frequency patterns of the local populace.

There were maximum constraints on pricing purely due to the “closed” customer base and their cash flow and income, so how else to discover a cost advantage? I looked for an “economic order quantity”. I found that shampoos and coffee sachets could be bought 6 at a time, sold with a reasonable markup and covered the cost of all 6 by the time 4 were sold. So these 6/4 sachets became group A and were primarily fast moving. Then you got the powdered milk and diapers, you could only afford to buy 4 at a time and were only able to cover the cost of all 4 when you sold 3 sachets. And so on and so forth.

But after all that, the bottomline didn’t change much, it might have only eased the cash flow/inventory purchase cycle but there really wasn’t anyway to generate a significant increase in income as it was.

At this point I want to say that if MNC brands like Nestle and Proctor & Gamble really want to effect positive change among the BoP, one thing that they can do is design their sachets, pricing and sales material to target the BoP small shopkeeper, not just the retailers and traders within their existing sales and distribution channel.

Literally a few cents difference in pricing here or there, along with an increased focus on the shopkeepers – training, pricing, margins – could make a significant difference in their livelihood and income.