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private-partnerships (PPPs) that can lead to innovativedemand-based products and services formeeting the needs of the poor people.To summarize: an enabling environment, capacityand institutions that will enhance access tofinance and safety net mechanisms are criticalfor the entrepreneurs at the bottom of thepyramid and require innovative approaches.Remittances can be an attractive business formicro-finance institutions and a valuable additionalfinancial service for current and potentialmicro-finance clients. Also, micro-insurance canassist in increasing the demand for micro-financeand potentially take micro-finance activities to alarger scale.Public-Private PartnershipsThe informal economy is particularly dynamic anddemands a high level of responsiveness from thestate. Even though globalisation is significantlychanging the traditional role of the State, the roleof the government must remain central in the developmentchoices. One compelling reason is that‘in most reforming countries the private sectordid not step in to fill the vacuum when the publicsector withdrew.’ 85At the same time, developing countries arerecognising the importance of markets and theyunderstand that markets have to be created andgoverned. And sometimes the private sector hasto be motivated to do what needs to be donethrough the strengthening of the policy environment,and through incentives and removal ofbarriers for market creation. An efficient privatesector depends on a sound domestic macroenvironment that fosters good trade policies andinstitutional foundations, and adequate capacityto maximise benefits from the macro globalenvironment and to promote distributional equity.The private sector is keen to harmonise privateinterest with public interest because, inter alia,it has started recognising the potential businessopportunities. Accordingly, the private sector isactively promoting new approaches to alleviatingpoverty, opening opportunities for all concerned,including the poor people and the private sectorcompanies. While private financial institutionsare willing to develop innovative partnershipmodels to provide access to inclusive financialservices, they need assistance in formulatingappropriate policies and strengthening capacitiesthat would remove barriers to market creationand expansion of market access to entrepreneursat the base of the pyramid. Governments, meanwhile,should be encouraging private financial institutionsto garner savings, long-term credit andmarket-based social protection instruments in ruraland underserved areas, 86 hence the emphasison public-private partnerships. Also, partnershipwith the private sector is no longer simply aboutmobilisation of resources; it is also about actingon knowledge gained from the wealth of collectiveexperience about entrepreneurship, managementskills and global networking.The challenge to make the ‘missing markets’play an economic role in job creation andservice delivery lies less in finding technologicalsolutions to production and distribution and morein structuring institutions, capacities, incentivesand regulations. And, if sustainable, high qualityand affordable basic services are actually to bedelivered to the poor and disadvantaged, capacitiesmust be built to engage the talents and energiesof the greater community and to allow forreal and meaningful ownership of the activities ofthe different stakeholders.Public-private partnerships hold great promise inthis endeavour, especially if they were given anenabling environment that removed barriers tothe entry by the smaller and community-based239