Growing the Wealth of the Poor - World Resources Institute

R E C O M M E N D A T I O N S : A D V A N C I N G E N T E R P R I S E A N D R E S I L I E N C Eproducts that form the basis of nature-based enterprises;often, rural producers cannot sell their products exceptthrough state-controlled auctions or outlets. In the rightcircumstances, this regulation can help regularize pricesand access to commodity markets, but in many cases itsquelches competition and restricts the entrepreneurialspace that rural enterprises occupy. Creating opportunitiesfor these enterprises to go outside the state-controlledsystem and market their wares directly can expand theirmarket reach and provide an incentive for productimprovement and innovation.2. Provide Long-Termand Integrated Enterprise Support.Budding rural enterprises can benefit from a variety ofsupport services sponsored by governments, donors, andNGOs—from business development and marketing supportto microfinance programs. Experience shows that these aremore effective if administered as an integrated package,where financing follows intensive skills development andbusiness planning and where consistent follow-up is providedas enterprises take their first steps.■ Provide market analysis, business planning,and mentoring services. A realistic view of themarket and a sound business plan to reach this market areoften luxuries that small producers do not have theresources or knowledge to undertake. Filling this gap cangreatly enhance an enterprise’s chances of success. Businessmentoring programs have proved highly effective at reducingthe failure rate of new enterprises.■ Regulate, but don’t over-regulate, the microfinanceindustry. Microfinance has become a crucialpart of the enterprise generation cycle in many rural areas.Although the microfinance industry has grown rapidly,further growth is required to fuel the expansion of naturebasedenterprises. Governments have a vital regulatory role,providing oversight as the commercial banking industryenters the microfinance market, encouraging competition todrive down loan costs, and creating product standards thatensure that loan and insurance products are well designed.Governments can also assume an educational role, makingtraining available for smaller microcredit and microinsuranceproviders.■ Provide professional business services forcontinuing support. Once support services are established,the need for them may persist for many years. Oneof the most frequent shortcomings of enterprise developmentprograms is their lack of follow-up services, oftenleaving new enterprises without access to legal, accounting,marketing, technical, and financial services they require tosustain themselves and expand.3. Reorient the Government BureaucracyToward Service.If the government line agencies that deal with naturalresources are to foster community-based enterprise ratherthan thwart it, they must jettison old attitudes and developnew skills that emphasize service delivery and shareddecision-making with local institutions.■ Redefine the mission of line agencies. Tochange their culture, line agencies must begin by redefiningthemselves. Rather than seeing themselves as sole managersof natural resources, with an emphasis on productionalone, they must shift their focus to collaborative management,with a goal of ensuring both a good decision-makingprocess and sustainable resource use based on thesedecisions. This entails helping communities participate inlocal resource decisions and use local resources responsiblyfor their livelihoods.■ Establish incentives to change agency culture.Translating this new mission into change within lineagencies will require developing performance indicatorsthat embody the agencies’ new goals and tying promotionsand pay to these performance measures, thus rewardingstaff for acquiring participatory skills and delivering technicaland advisory services to resource-based enterprises.■ Develop staff capacity to work collaborativelywith local resource users. Agency staff typicallylack training in participatory methods, necessitating adedicated effort to develop and reward such skills. The goalshould be to transform agencies into “learning organizations”that reward innovation and collaboration and thatculture cross-cutting skills that combine technical expertisewith a mastery of process and social skills.4. Revitalize Rural Representation.To compete against larger industries and urban constituenciesand to gain access to larger markets, small ruralenterprises need their legislative representatives to advocatefor their concerns more effectively and to make sureresource policies and regulations treat them fairly. Legislativereforms are needed to realign incentives for ruralrepresentatives and increase their downward accountabilityto their rural constituents.Not all of these reforms are of the same degree of difficulty.Some, such as increasing legislative transparency throughenactment of Freedom of Information legislation, may beaccomplished in the short term—and have been in manynations. However, we acknowledge that other more substantivereforms, such as reigning in the power of the executivebranch and of political parties, are more challenging and199