Private Utilities and Poverty Alleviation

Private Utilities and Poverty Alleviation

Market Initiatives at the Base of the Pyramid

Edited by Patricia Márquez and Carlos Rufín

Drawing on cases from electricity distribution and other infrastructure industries, and from experiences spanning Asia, Africa and Latin America, this book examines new business models to bring basic utility services to the four billion people comprising the base of the socio-economic pyramid.

Chapter 1: Introduction: Utilities at the Base of the Pyramid

Patricia Márquez and Carlos Rufín

Subjects: development studies, development economics, economics and finance, development economics, industrial economics, public sector economics


Patricia Márquez and Carlos Rufín Omaira and Yesenia are neighbors in a Latin American shantytown. They are best friends, and dwell in hillside shacks reached by steep, uneven steps. Together with two partners, they signed up for a microfinance loan to buy equipment for their informal economy workshop: a computer and printer to stamp labels on their home-made clothes and coffee filters. Often the computer turns off because of a power surge. Once, a shortcircuit caused a small fire in Yesenia’s home. When it rains, their informal electricity connection often fails, they have to ask Wilmer – the neighborhood handyman – to reconnect wires to the nearby lamppost for a $10 fee. It is necessary for these two women to spend time at home as water service comes twice a week, and must be gathered in buckets by standing in line at a nearby pump. Both Omaira and Yesenia complain of the fetid smell outside when garbage piles up, as it is seldom collected. This story is a snapshot of the drama of insufficient access to basic services suffered by the urban poor in Latin America. In other parts of the world, the poor endure even worse conditions as children play alongside human excrement, or electricity is not available even from illegal connections. Access to utilities is key for achieving economic growth and improving the lives of citizens worldwide. Polluted water is a major source of infectious disease, particularly diarrheal illnesses that are a major cause of infant mortality in...