Working Together in Pursuit of Inclusive Business: Sharing the Latin American and Caribbean Experience with Asia and the Pacific
In 2012, ADB and the Inter-American Development Bank entered into a formal partnership on South-South cooperation. One of the priority topics for this inter-institutional cooperation is inclusive business. Since 2008, the IDB has built up a dedicated program called Opportunities for the Majority for Latin America and the Caribbean with 45 private sector projects worth $250 million, leveraging more than $1 billion of additional investments, and 33 grant-financed technical assistance projects.
ADB recently created its Inclusive Business Initiative to provide specific technical assistance and promote private sector investment that benefits the poor and lower-income groups in Asia and the Pacific.
This publication summarizes the Inter-American Development Bank's Opportunities for the Majority program and provides recommendations for ADB to learn from Latin America in the pursuit of inclusive business. It is part of the IDB-ADB cooperation on knowledge exchange between the two regional development banks in Latin America and the Caribbean and in Asia and the Pacific.
Main findings of the report
- There is a significant and growing market opportunity for inclusive business.
- Multilateral development banks can create value and additionality in this market.
- Opportunities for the Majority was successful in mainstreaming inclusive business at the Inter-American Development Bank and beyond.
- The Inter-American Development Bank made a number of internal adjustments to accommodate base-of-the-pyramid business models.
- Assuring the evaluability of inclusive business investments is essential for model validation and learning.
- Blended financial instruments and robust technical assistance are required for program effectiveness.
- A strong and diverse team was essential to program effectiveness.
- Inclusive business does not mean higher risk and lower returns, yet should address systemic market failures to assure scale.
Key considerations for ADB
In an ADB context, the most fundamental question requiring consideration is whether ADB intends to mainstream inclusive business as one of the key drivers of its Strategy 2020 and as a means to further engage the private sector on inclusive growth. After internalizing these important lessons - and assuming there is growing interest within ADB to incrementally develop and widen the scope of its inclusive business agenda - ADB should consider the following recommendations:
- Provide coordination capacity and assess operational options for inclusive business implementation
- Develop implementation modalities and rollout strategy
- Internal engagement and readiness
- The Retrospective in Brief
- Purpose and Approach
- The Evolution of the IDB’s Base-of-the-Pyramid Strategy: The Opportunities for the Majority Initiative
- Key Findings of the Opportunities for the Majority Evolution
- At a Crossroads: Key Considerations for ADB