The Advantages and Disadvantages of Using Base of the Pyramid Approaches - Essay Example

THE ADVANTAGES AND DISADVANTAGES OF USING BASE OF THE PYRAMID APPROACHES TO PROVIDE SOLUTIONS TO CLIMATE CHANGE, EXTREME POVERTY AND HUMAN RIGHTS By Students Name Course Code and Name Professor’s Name University Name City, State Date of Submission Introduction Among the most disturbing issues in the world today, is the income inequality. The gap between the poor and the rich is gaping in every country of the world. Recent reports by Oxfam state that by the end of this year, 1 percent of the world will own more than 99 percent of all the world’s wealth (Tengely-Evans, 2014). Several scholars have represented the situation in the form of a pyramid whereby the poor occupy the base of the pyramid (BoP) which is the largest group. Such a situation is very damaging since it means that there are so many people living in abject poverty, something that the world has been battling since the advent of the millennium development goals (MDGs). In fact, the eradication of extreme poverty is the first item on the MDGs. Something else that has been attracting much attention lately is climate change. The fact that the environment is degrading faster today with the increase in industrialization is alarming as it affects important issues such as food security. These issues affect yet another important part of life, human rights. This paper will be looking at the advantages and the disadvantages of using the BoP approach to deal with climate change, extreme poverty, and human rights. 1. Climate Change The bottom of the pyramid is the largest social-economic group that is also the poorest. The population of the planet is a little over 7 billion yet over 3 billion people live on less than $2 per day (Anderson & Markides 2012). The phrase “base of the pyramid” is used, in particular, to develop new models of doing business that use new technology and deliberately target the said demographic. Climate change, as has been mentioned earlier, is among the most important issues that the world has to deal with. With globalization, there has been increasing levels of carbon dioxide and other greenhouse gasses in the atmosphere. The effects on the environment are degradation of the atmosphere and, therefore, global warming. Global warming is essentially the reason seasons are becoming more and more unpredictable. Worse still, global warming has brought about desertification, a situation where deserts are encroaching on arable land. Desertification is among the many reasons that there is less agricultural production and a threat to the world’s food security. To deal with climate change, there has been the development of new models and among them base of the pyramid approach. Several other factors contribute to climate change. Almost every person in the society, whether rich or poor, have their ways of participating in harming the environment. The rich invest in industries, for example, where they employ the poor while the poor take part in harming the environment through cutting down trees and depleting other types of resources. The resources include the soil nutrients as in the case of overexploitation of land. Climate change, which may refer to a change in global or regional climate patterns, is majorly affected by agriculture, something closely associated with the BoP demography (Ansari, Munir & Greg). In general, the bottom of the pyramid depends on agriculture for their sustenance. In Africa, where most of the developing countries are, is majorly dependent on farming. It is because of this reason that global warming and climate change pose the greatest threat to the survival of the people. Agriculture contributes to worsening the climate of the planet. Several of the activities associated with BoP in contributing to climate change are deforestation, accelerated soil erosion, loss of soil organic matter, salinization of soils, coastal water pollution, and acidification of the oceans. There are several advantages that are seen with using the BoP to provide solutions to climate change. Climate change evidently affects the poor more than it does the rich. In this case, the poor are more willing to combat environmental degradation more than anyone else in the society. The poor are more affected by climate change as it affects their very basic livelihood. Climate change affects agricultural production as it affects seasons. In the world today, there is much famine in many areas as rain is less predictable. People who depend on rain, the poor as they cannot afford irrigating their crops, suffer the most when the rains fail (Wheeler & von Braun 2013). Carbon sequestration in soils The paper cannot reiterate more that the poor are dependent on agriculture for their upkeep. Agriculture contributes a lot to climate change through its emission of carbon to the atmosphere. To help reduce these levels of pollution. The BoP can be approached to use organic agriculture which can remove and sequester over 7,000 pounds of carbon dioxide from the air per acre per year (Jat et al. 2012). In essence, organic farming, if properly executed, does not compromise yield. In fact, it increases yields in drought years since the additional carbon stored in the soil helps the soil hold more water. During the wet years, the extra organic matter in the soil helps in wicking water away from plant roots. The decaying plant matter also limits erosion and keeps the plants in place. In this case, the BoP can be approached and trained on investing in organic farming which will primarily improve on agriculture production and at the same time curb climate change. In case of climate change, the soil will be in a better position to adapt to the changing climate as the matter in the soil plays quite a significant role in boosting the production of land through the retention of water as seen above. Local food systems and greenhouse gas emissions Since the BoP group is essentially the ones producing food for the entire population, their methods of production plus how they ensure that the products reach the markets matter a lot in protecting the environment. In this regard, adopting greener methods of production could significantly mitigate climate change. Production of food, for example, could be done near markets. The idea is to reduce the overall emission in transporting the food. Although the effort may not seem like a lot in preventing climate change, it could prove very crucial later as there will be less carbon dioxide gasses expelled to the atmosphere. The farmers will also be saving more on their production cost as they will not have more transportation to do (Wakeland Cholette & Venkat 2012). The main advantages of using the BoP approach to combat climate change, as seen above, is that they dwell more on sustainability and “natural” methods of dealing with the menace. Other than that, they are not an economic burden to any country that wishes to adopt them. While climate change mitigation is an important thing to do, a lot of it has been happening due to people seeking to make profits in production, whether in companies, industries such as transport, and also in agriculture. In this regard, it may not make sense investing in very expensive installation of carbon capture and storage at power stations (Szulczewski et al. 2012). In other words, polluting the environment so as to make profits and then using the proceeds to construct systems to mitigate the pollution is not a feasible or bright idea. The main disadvantages of using the BoP approach to combat climate change is that there are more issues affecting the people at the bottom that would deter them from engaging in sustainable agriculture. For example, they may not be able to practice crop rotation, shift cultivation, or farrowing as some of these require that farmers stop cultivating land for some time, avoid growing particular foods for some time and so on, a luxury the BoP cannot afford. This makes the approach a destitute method of dealing with climate change. The best way to deal with the climate change menace may not be investing in BoP approaches but in advocating greener living from any part of the society. Some of them would include production of more fuel efficient cars or better still, businesses investing more in renewable and cleaner energy. 2. Extreme poverty Extreme poverty may also refer to absolute poverty. It was originally defined by the UN in 1995 as a condition by which an individual suffers severe deprivation of fundamental human needs such as food, safe drinking water, health, shelter, sanitation facilities, education, and information (Gorgon & Nandy 2012). Extreme poverty depends on both the income of an individual and also their access to services. Currently, however, those that live below the poverty line of a $1.25/day as said to be suffering from absolute poverty. Most of these people reside in South Asia, The West Indies, Sub-Saharan Africa, East Asia and the Pacific. Nearly half of these people live in the two most populous countries on the planet, China and India (Gorgon & Nandy 2012). Extreme poverty remains one of the most disturbing and critical issues in the modern world. Its importance in global issues led to the establishment of the Millennium Development Goals (MDG) in the year 2000 by 189 UN member states (WHO 2008). Their aim was to reduce extreme poverty by half by 2015; the world met this goal in 2010. The UN, the World Bank, some African states such as Kenya, and the US have set themselves near targets where they seek to end extreme poverty by 2030. As the poor are the majority are the most affected by poverty, there are several BoP approaches that try to combat the situation. The Libertarian, which has grown stronger in the recent years, is among the approaches (Karnani 2010). The movement emphasizes on having free markets arguing that they can be helpful in reducing poverty. The World Resources Institute suggests ‘development through enterprise’ emphasizing on business models that are driven by a motive and engage the BoP as producers and consumers. Some prolific exponents of this perspective argue that selling to the BoP can be profitable and at the same time be effective in eradicating poverty. International companies such as Unilever have already adopted the BOP approach and are looking for ways of implementing the strategy to combat extreme poverty. In its goal to reduce poverty, the libertarian approach assumes that the poor are not only fully capable of participating in the free market economy but are also willing to participate. Some authors such as Prahalad (2009), postulates that the poor should are “resilient and creative entrepreneurs and value-conscious consumers”. The UN on their website, on the other hand, purport that “currently, micro-entrepreneurs use loans as small as $100 to grow thriving business and, in turn, provide [for] their families, leading to strong and flourishing local economies” (Morley, Machado, & Pettinato 1999). There is no proof of whether this assertion is right though There are advantages and disadvantages of using the BoP models such as this one to combat extreme poverty. At the core of BoP perspectives, there is relying on a hypothesis of mutual value addition; the greater the value that those living at the BoP create, the greater the venture. BoP venture are supposed to generate enough value to the society they operate in. The initial ideas were developed as business opportunities where the poor were seen as able to buy products only that they needed them at subsidized costs. In this regard, companies embarked on bridging this gap by manufacturing goods and offering services that the BoP could afford. Somehow because of the opportunity side based the development of the idea, the business strategy side of the perspective dominates the discourse. A BoP venture is supposed to be a revenue generating enterprise that other sources goods from, or sells products to those at the BoP in a way that helps improve the living standards of the people. In other words, there is the BoP as consumer and BoP as producer. Despite companies based on either of the two perspectives have same core principles, their outcomes in poverty alleviation are different. The fact that the source raw materials from the society for the production of goods is beneficial in raising the standards of living of the BoP. If, for example, there were farmers producing milk or any cash crop, a company that buys from the society can be very helpful to the survival of the society and the improvement of its welfare as the people will be sure of an available market and thus a source of income. Extreme poverty entails living under $1.25 day (Pogge 2012). If there is a guaranteed market for the poor, it is obvious that they will ensure that they at least produce something of value to the company so that they can earn a living and thus will not be living under a dollar or lacking basic needs. Apart from providing themselves with food and shelter, there will be other forms of development in the society. People with high purchasing power will attract the establishment of other businesses in the area and, therefore, the creation of more employment opportunities. In the long run, this will empower the society economically and socially. Companies view the market at eh BoP as financially capable of buying items, a view that may prove a hindrance to suing BoP to eradicate extreme poverty. There are several letdowns of using BoP to address extreme poverty though. The products and goods available in the market are not free of charge. The companies responsible for producing them have to more than meet the cost of production as, at the core of their business mind, they saw the BoP as ‘untapped’ markets and a place where they can make sales. It is this market-based perspective that differs from the grant-based perspective that greatly limits the possibility of actually alleviating extreme poverty in the society. Poverty alleviation requires more than establishing companies in the society and selling them goods at subsidized costs. In looking at the purchasing power or rather how to combat poverty, one would realize that there is more than meets the eye. The MoP needs more than a supply of basic needs if they have to pay the supplier. To really empower the people, it would be considered better to provide grants to the people as a method of empowering them financially (Panapanaan et al. 2014). Apart from that, boosting of social capital investigate in areas such as education can be very effective in combating extreme poverty. Education offers an individual more opportunities in life while the grants can be used to start small businesses and in turn empower the people economically. The businesses can also provide the goods at the cheapest possible rates and offer grants too incase they are buying raw materials from the people. At the end of the day, a corporation considering starting a business at the MoP as an economic viable idea is only into the enterprise for the profits and not necessarily to help the people. 3. Human rights. To better understand how BoP can be used to offer solutions to human rights issues, and the advantages and disadvantages of using the approach in dealing with such issues, it is important first to give an account of what human rights are. Simply put, human rights are rights inherent to all people. Their rights are shared by all people and are not dependent on factors such as nationality, sex, color, place of residence, national or ethnic origin, language, religion, or any other status. Every human being is entitled to the rights without any form of discrimination. The rights are all interrelated. They are also interdependent and indivisible (Donelly 2013). While this is so, there have been arguments that there are people who are ‘more equal’ than others. This section of the paper will be looking at the advantages and disadvantages of using the base of the pyramid approach to address issues to do with human rights. Upholding of human rights is not negotiable. Unfortunately, people at the bottom of the pyramid always suffer from several types of discrimination. The example laws targeting those engaging in terrorist activities are more likely pay much attention to the people at the bottom of the pyramid yet if these groups need funding, the most likely people to be funding them are not those at the bottom of the pyramid but those at the top. This situation is more pervasive in international law than it is in the business however. There are quite a number of human rights. All the rights are important and should people from the top or the bottom of the pyramid should enjoy them equally. People are supposed to have the right to live. This right is one that elicits quite some attention in relation to the BoP. In looking at the right to live, this particular right entails quite a number of other issues. If any individual has the right to life, it means that they should be able to access things that are essential to upkeep. Unfortunately, there exists too much inequality in almost every part of life. The main advantages of using BoP to address issues such as human rights is that it sheds light of the conditions the people at the BoP have to tolerate and, in that way, help policy developers come up with ways through which they can mitigate the situation. The right to live relates closely to the human right to health which means that everyone has the right to the highest attainable standard of mental and physical health. It includes the access to every medical service available, sanitation, healthy and adequate food, healthy working conditions, decent housing, and a clean environment. In other words, all people should enjoy all these factors regardless of where they lie on the pyramid. Unfortunately, the situation is not the same on the ground as the BoP is often discriminated upon and their lack of financial power limits the possibility they may afford the services they seek. Worse still, they do not have a voice over services they should they receive and what their human rights. Use of MoP helps develop a better understanding of much the people need to be done so that the gap between them and the rich closes. In international companies, there usually occurs cases of people being subjected to inhuman working conditions (Josephs 2014). Naturally, the companies are owned by the 1 percent, and the employees are the 99 percent in the BoP. When they understand that the poor will always have their rights impinged, they will know the best measure to take to ensure every person in the society enjoys their rights. The majority of the population lies at the bottom of the pyramid. In other words, focusing on this group of people and developing financial projects that will empower them is essential to ensuring upholding of human rights. The people are also the majority at this level and since it cuts across all nations of the world, addressing the financial needs of the group and their human rights will be addressing all the needs of every person on the planet. People at the BoP do not enjoy most human rights as they should. They live in abject poverty and cannot even guarantee themselves a meal. They are chronically hungry and most of them illiterate yet human rights state that education should be free, at least for the primary level. While the base of the pyramid approach may seem like the best in dealing with the inequalities that exists in the society and more so in solving issues to do with human rights, it is far from addressing them. The reason is that the resource allocations significantly affect how much rights people in the specific demographics can enjoy. Addressing the issue of human right may require empowering the people economically but it also calls for measures that will help uphold the rights of every individual on the planet despite where they come from, race or sex. The MDGs are among the best initiatives that, if all of them are achieved, will ensure that all people enjoy universal human rights. If people achieve MDG1, for example, they will no longer suffer from extreme poverty and hunger. In conclusion, this is clearly the age of inequality. Education, access to resources, access to health, power, and many more important aspects that characterize the human race showcase just how much inequality exists in the world today. The bottom of the pyramid has been used to shed some light on important issues such as climate change, eradication of poverty, and human rights. 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