The Blue Sweater: Bridging the Gap Between Rich and Poor in an Interconnected World (42 page)

Finding such modes of distribution reminded me of Haddy, the Gambian fertilizer seller I'd met years before. The solution focused on building on systems already in place, systems that worked for the poor and increased their overall levels of choice. I also thought of Charlotte, who wished she could accept the free antiretroviral drugs but appreciated that at least she could afford the European pills in the marketplace that suited her body's needs.

Indeed, when we talk to women in rural areas, they push us to think of more creative solutions altogether. It can be hot and sticky under the nets, and you are vulnerable to mosquitoes if you walk around inside the house or go to the bathroom at night. Consequently, we've been working with a brilliant scientist who has lived for more than two decades in Africa and has been developing a way to cover the walls of a rural home to protect the household not just from malaria, but from all sorts of insect-borne diseases.

We started with a single approach-financing a technology transfer by investing in an African entrepreneur to bring a critical good to Africans. Through the work, we learned a lot about how people make decisions and what it might take to build an alternative distribution system. We also learned that while free bed nets are key to reaching the masses, there is also a place for market mechanisms that put malaria bed nets in shops so anyone who needs them can get them without having to hope that a clinic will provide them, at least until public health policies are reliable enough to ensure truly universal access.

Public health is the thorniest area for change, but not an impossible one. So much can be learned by listening to the market: Indeed, this process may lead to insights about how to price insurance products for the very poor so we'll have a more rational system for bringing affordable, critical goods to them in a way that is reliable and accessible. Malaria bed nets might be one component of such a program, which would have to be built from the perspective of the people who actually use it.

What also makes the process of growing solutions to poverty complex is the noise we hear in the media and among thought leaders who believe their way is the only way. They suffer from a paucity of listening skillsjust at the time when listening has never been more important. Today's media are highlighting a major debate between those who think that everyone in Africa should be given a free bed net to protect him or her from malaria and those who believe that the bed nets should be sold at an affordable price.

The free-nets side cites fast coverage ratios and immediate reductions in malaria. And it's true: Malaria rates fall dramatically when an entire village is given free nets. Social marketing advocates-those who believe that nets should be sold-argue that giveaway programs typically result in quick fixes that don't last and point to evidence in Ethiopia and other countries where, only a few years after net distribution, actual usage rates fell precipitously. This, too, is true.

So often we ask ourselves the wrong question. When it comes to a disease like malaria, the question should not be whether bed nets are sold or given away free. Both distribution methods have their place in a broader attack on the disease. The question instead is, What does it take to eradicate malaria? Without a reliable source of bed nets, people may find themselves abruptly cut off from a supply when they most need it. It's not "either-or," but rather "both-and."

We have to be careful, as well, that the world's focus on bed nets doesn't hold back other potential innovations. The Bill and Melinda Gates Foundation has put hundreds of millions of dollars into researching a malaria vaccine, and efforts are under way to create a line of house paints that kill mosquitoes but are safe for humans to touch. These are exciting possibilities that will work only if the world learns how to collaborate in a system-wide assault on the disease.

In the 21st century, private-sector approaches fueled in large part by creative philanthropy will be vital to solving public-sector problems. Almost nowhere is such innovation needed more than in supplying water. Poor farmers in arid regions can't find enough of it to irrigate their crops. People the world over contract diseases from dirty water; an enormous global burden of disease is due to unsafe water and poor sanitation. Increasingly, we're seeing skirmishes that may lead to big wars in this century over who has rights to water.

Meanwhile, the water table in India alone is declining by 6 meters (20 feet) a year. Solving water-related issues is key. Again, no one has all the answers. If they did, we wouldn't have a world where 1.2 billion-or one in five of us-have no access to a glass of clean water.

As with public health, our approach to water at Acumen Fund has been to experiment and innovate to find solutions that can inform the public debate and show the way to wide-scale change. In India, for example, the platforms of many state governments have held largely that water is a human right and should be given free to everyone. At the same time, more than 180 million Indians have no access to safe, affordable water.

Since Acumen Fund started working on water, I have been invited numerous times to sit on panels focused on determining whether water is a human right or its ownership should be privatized. Again, the question is wrong. People need water to live, and there is no better intervention to improve health on a global scale than bringing safe, affordable water to as many people as possible. But how do we make sure it can be distributed to the poor in a sustainable way? How do we ensure that all people have access at least to the minimum amount of water needed to live healthy lives? We're trying to find those brave entrepreneurs who are determined to discover the answers.

Tralance Addy is a Ghanaian entrepreneur who, after a long career at Johnson & Johnson, turned his energies toward creating a company that would deliver safe, affordable water to low-income rural communities. He identified an ultraviolet filtration technology developed by Ashok Gadgil at the University of California at Berkeley, and set off to introduce this new technology to the developing world. In the Philippines, Tralance learned that he was selling the wrong thing to poor villages: People didn't actually care about what kind of technology was cleaning their water. Instead, they wanted a service that was reliable, affordable, and safe. Tralance thus shifted his focus from the technology to building the right distribution system.

We met Tralance when, armed with these lessons, he decided to establish the business in India. Along with other early investors, Acumen Fund made an equity investment of $600,000 into the new company that now had a simple business model. WHI would sell a $50,000 filtration system to a local entrepreneur with the capability of running a small business serving around 5,000 people at village level. Individuals would buy the water at affordable prices, and the revenues would eventually cover the costs of running the company. Tralance had a vision of serving millions this way, and we bet that he could do it, though the odds were against him. Long distances, lack of bank credit, terrible roads, and a sense of fatalism among many villagers meant that only the most patient of investors would ultimately be rewarded.

I and several Acumen partners went to visit WHI's first facility in 2005, when the company was establishing new operations in India. Our first stop was Vijayawada, a small city by Indian standards with a population of about a million people. We'd taken a long, hot, overnight train ride from Hyderabad to arrive just before dawn so we could drive another 3 hours to visit the company's first village operation. We were all eager to get a better sense of what it took to bring safe water to people who'd not previously had access-to underserved markets that had been for too long invisible.

Despite the early hour, the city was teeming. Colorful trucks overflowing with baskets and fruits, furniture and people, rumbled along Vijayawada's crowded early morning streets. Women walked with pots of water tucked under arms covered with colorful bangles. Others carried metal containers on their heads. Morning is the time for fetching water. Three-wheelers and bicycles competed audaciously in a dangerous game of chicken with the big bully vans and trucks that often carried signs on the back saying, "Please sound horn, please."

As soon as the car reached the outskirts of Vijayawada, we found ourselves on a narrow road lined with palm trees and green fields as far as the eye could see. Thatched huts dotted the landscape, and every so often we would come across two women in saris of fuchsia or chartreuse fluttering against the blue sky. Potholes riddled the road, and we weaved carefully from side to side. Then the road was smooth again, though I doubt we ever exceeded 30 mph as we passed bicycles, people, and cows. Women laid just-washed brightly colored clothes on flat rocks to dry in the sun. A white Ambassador car whose hood was bedecked with yellow marigolds puttered along with its old men and women passengers nodding to the past.

Flowers for celebration, for mourning, for making life more beautiful: India is filled with flowers jasmine and gardenia, marigold and bird-ofparadise. An ox stood alongside a cart painted with folkloric landscapes: Life was beautiful.

After a 2-hour drive, we entered a village area called a panchavat and moved along a single road toward clusters of houses. In the distance, we could see the WHI structure, an alien-looking, diamond-shaped dome colored electric blue. People had come to the site using all sorts of forms of transport. Boys walked forward with plastic containers and filled them from one of the three taps. Young men drove up on motorbikes and bicycles, rickshaws and three-wheelers. One man pushed a huge cart that carried 9 or 10 of the 15-liter containers. On average, the center was already selling 300 containers a day at their first facility-an early sign of success.

I was struck most of all by the fact that not a single woman approached the plant to buy water. I remember standing next to a man years ago as we watched a woman carrying not one but two pots on her head still walking gracefully. As I marveled at her expertise, the man had said, "Well, you know, women are built for that. They have stronger necks relative to men."

"I see," I had hummed, not wanting to get into this particular conversation with a stranger on the street. I remembered the same sentiment voiced so many years ago by Chowdury, the man who drove me through the desert on a motorcycle. For 20 years, I've seen attempts made to reduce women's labor based on the assumption that the more time women have free from daily chores, the more they can increase their income, care for their families, even have some leisure. But most attempts failed. Now, with no focus on gender, for some reason this new plant was enticing men to carry water. Of course, they weren't carrying the water themselves, but hiring boys with bikes, rickshaws, and taxis. But what mattered was the change itself.

A poultry farmer with a handlebar mustache and a big, intelligent smile explained that he purchased, on average, 10 containers a day. He fed the water to his chickens-about 7,000 of them, a big jump from the 5,000 he'd been raising before he had clean water, which, he said, made medicines unnecessary and enabled his chickens to grow about 20 percent more quickly.

He was there to ask WHI to allow him to pipe water to his farm, but they refused, explaining that it would be too easy for people to steal water by drilling into the pipes. The farmer wasn't convinced. He said he would pay for it, protect it, and take care of it. The group asked him to think about purchasing a water storage unit instead, at least as an intermediate step. This would allow him to control flow and reduce time spent carrying water. I was struck by his entrepreneurial spirit and sophistication. He knew he was the company's most important customer, and he was bent on changing his life.

We wondered aloud why not every villager was rushing to buy safe drinking water. After all, the farmers' chickens were visibly healthier, and families drinking safe water would likely see much lower health care bills. But technical changes are easier to effect than behavioral ones. To reach out to the rural villagers, WHI thus decided to partner with Naandi Foundation, a local NGO that understood the communities where the company hoped to work and had great experience in helping villages adapt new technologies, build distribution systems, and work effectively with local governments. This kind of partnership between for-profit companies having skill in delivering goods and services and nonprofits with an understanding of poor communities and a will to ensure they are protected is an important model for the future, one that depends on the blurring of lines dividing private and public sectors.

As one of the first investors in WHI, Acumen Fund has been working with the company for more than 4 years. In that period of time, we've collaborated on a number of projects, including redesigning the original plant structure so that the existing outlets are streamlined, simple to build, unobtrusive, and easy to maintain. WHI deserves credit for experimenting with its design, recognizing shortfalls, and changing quickly to a better model.

We also worked together to bring bank credit into rural areas so that villages could borrow the capital needed to install a plant in the first place. Acumen Fund used our patient capital to provide a 30 percent firstloss guarantee to ICICI, India's second largest commercial bank. We could have lent directly for village operations, but this approach would bring more money into underserved areas. Over time, we reasoned, if the business model worked, the banks would become more comfortable with lending and we could reduce our guarantee.

As it turned out, in less than a year, because of WHI's track record, Acumen was able to provide a second guarantee with a 15 percent loss coverage. In other words, this time, a $1 million guarantee from Acumen released $8 million in commercial loans to build rural water systems.

After spending a few hours at the water facility, we walked through the village. Most people lived in thatched huts or concrete houses, all of which were neat and clean. Women gathered at the wells, gossiping and laughing while they pulled the water from the ground. They still carried the well water to the river's edge for washing. All along the river, women were laundering their clothes: Water was at the center of life. Young schoolgirls in green skirts and white blouses carried their books, and white egrets sat atop haystacks and cattle. As both men and women worked in the surrounding fields, at least some of their children were being watched in a tiny day-care center next to one of several small temples: a clear source of community pride.