ADB offers $3.6-M grant for dev’t of inclusive business

MANILA, Philippines - Manila-based Asian Development Bank (ADB) is offering an initial $3.6-million grant for the development of inclusive business in the Philippines and the rest of Asia.

This is being undertaken with other development partners that include Credit Suisse, the government of Sweden, the development banks of France, Germany, and the World Business Council for Sustainable Development.

Inclusive business is a commercially viable core business, designed to address socioeconomic issues such as poverty, employment and inclusive growth.

Dr. Manuel Rybach, Credit Suisse managing director and head of International Relations and Research Institutions, said inclusive business is an innovative public-private partnership.

ADB principal economist for regional and sustainable development department Armin Bauer added that inclusive business should have scale, reach, and depth. In other words, it must be an ongoing business effort, involves a large number of poor, impacting large areas of a local economy or several Asian nations, and impacts on the local economies.

Right now, proponents of inclusive business are looking at a potential project involving cacao farmers in Mindanao, and a scholarship program for Filipino seafarers.

Also in the pipeline is a spice project that involves Cambodia and India, and a water project in the People’s Republic of China.

Meanwhile, Bauer said they are in talks with the Board of Investments (BOI) to start an accreditation process for companies that want to join the inclusive business program.

The ADB has been in talks with the National Economic and Development Authority (NEDA) on Philippine poverty, unemployment, and the sectors that are most appropriate to inclusive business.

Already identified as potential targets for inclusive business are agriculture and agri-business, tourism, health and education.

As an example, the ADB economist said the country’s tourism industry utilizes more imported materials for its hotels rather than tapping the local market. The local furniture industry likewise exports its products instead of marketing to local tourism.

According to the ADB, the Asia Pacific region reduced its share of the poor to just 21 percent or those earning $1.25 per capital income. One of the many reasons for the relative improvement is policy adoption of inclusive growth in economic planning.

That involves the private business sector that creates or promotes models that directly contribute to poverty reduction.

“Asia’s private sector is increasingly realizing that the base of the income pyramid, or those living below the $3 to $4 poverty line (the bottom 60 percent of the population), represents an interesting business opportunity as a substantial new market for goods and services,” Bauer said.