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Global Goods, Local Market

This shop, along a well traveled road in remote Uganda, sells only produce that has been carried from villages in outlying areas. At each point, costs are incurred for transportation, adding to the price and reducing margin. Nearly everyone along the same road is selling the same produce. It is hot and much of the inventory goes bad. The men sell, in larger quantities, to trucks that carry the produce into cities.

In an environment of extreme scarcity, women have little means to produce goods that can be sold for a decent margin.  I have worked, for instance, with a group of women in rural Uganda who try to run businesses based on agricultural production.  Since they usually only have a bit of garden from which to sell, they have a small crop and are usually selling the same vegetables and fruit as everyone else in the area is selling, during the same season.  They can’t compete on price and are very vulnerable to changes in costs (especially transportation to market).  I have spent sleepless nights trying to figure out how these ladies can produce something value-added.

In my grandmother’s day, the way you did that was to produce a jam or a salsa or a chutney that was distinctively yours. Everyone would say, “Oh, I just love Beulah’s jalapeno sauce!” and pony up to pay for every new batch.  (Yes, “Beulah” was my grandmother’s real name.)  For hundreds of years, women have distinguished themselves in some particular area of production–usually some household item–in order to compete in the local marketplace. So you would think it would be obvious and universal to find women doing this.

But the problem for the ladies in Uganda was that conditions were so sparse, there was nothing from which to create differentiation.  There were very few spices in circulation (only those things, like ginger and garlic, that were grown locally).  Their cooking equipment (usually a collection of stones) did not allow for fine gradations of temperature or technique.  They had no access to jars or other containers that could be used to sell in small quantities.  And no way to sterilize so those quantities would be safe to transport, store, and eat.  A sewing machine is a rare treasure in such communities. Few women have fine needlework skills.  And there is only room for so many hairdressers in any neighborhood.

So, this is why it becomes very important to find other goods to sell. And it is why organizations like Avon, Jita, and Living Goods (and Coca-Cola) are providing a beneficial service to the poor in rural areas by arranging for women on the ground to sell global goods in the local market.

Here are Saif and me, on my first visit to Bangladesh. We were both younger then, but my hair color is better now.

My research partner, Catherine Dolan, and I have been researching Jita since early 2008. The CEO of that system, Saif Al-Rashid, built it up from the ground when he worked for CARE Bangladesh, recruiting the women, teaching them to sell, working out the distribution logistics.  It was a long time in creation and a true labor of love.  We are both really proud of him and what he has achieved.

Our research has shown that the Jita system works extremely well to provide an income for women, all of whom are drawn from the ranks of the hard-core poor.  However, we have learned that people in the West tend to overlook the remarkable achievement of finding a reliable way for rural women in a conservative Muslim society to earn a living, especially when many of them are barely literate or numerate. Instead these critics are too busy getting twisted about how immoral it is to sell consumer goods to the poor.  I have written a lot about that in this blog and we have had a couple of public panels about the issue.  Last November, we began setting the scene for a massive study of the impact of the consumer goods on these communities.

Catherine and I also conducted the first independent, empirical study of Avon among the poor, in South Africa.  Most of the press response to the Avon study was positive–the Guardian, the BBC, and the Economist all did their homework and they “got it” as to why this was an important innovation for development efforts–but others freaked out about selling lipstick to the poor and just could not see past their own prejudices about cosmetics.  I wrote a case about this issue, called “Avon in Africa,” especially designed to show the cultural history that makes these ideas look more like prejudice than morality. (There is also a teaching case on Jita, called “Care RSP.”)

Often, global goods are acquired at retail stores in the city for selling at home and at local shops. I captured these Vaseline jars for sale at a faith healer where Avon products were also sold. (I think that's Vicks VapoRub on top.)

Living Goods usually gets a free pass on such moral judgments because people think medical goods are “necessities” and therefore ok for the poor to have. Yet, in developed societies, we usually do not make the very poor pay for medical care–not even in the United States!  To ask a poor African women to pay for medicine to give a sick baby raises easily as many moral questions as selling her a lipstick, in my view, but Westerners usually look right past that problem.

In any case, the provision of finished goods for a local market is an important service and one we all need to understand better if we are to support female entrepreneurs who work under the most disadvantaged conditions.

All three of these systems will be represented at the Power Shift conference being held in Oxford next Monday and Tuesday.  Saif will be there and Catherine will moderate.  They will be joined by Sue Bossart from Avon and Tamsin Chislett from Living Goods. The session is called “Top Down” to refer to the flow of goods from the global level to the local exchange and to distinguish these systems from those designed to sell “up” from local producers to global retailers like Walmart (the “Bottom Up” session, running in parallel, will address that flow).  A third session, “All Around,” will look at Coca-Cola’s attempt to integrate both directions of flow.


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