Tag Archives: multinationals

Toothpaste will save Africa!

I was reading an article today and got really depressed.

(Azeem Azhar (2005). “Better and Faster than politics” New Stateman 18(878) p. 24.)

Here is a snippet:

The bottom of the pyramid is a new competitive business space, with new demands. If you want to sell toothpaste to an Indian villager, you need to know that he may not have access to running water, that he can’t afford to throw away the packaging, and that your main competitors are the twigs from the neem tree.”

And another:

“…the organisations best able to rapidly design and deliver the products and services that poor people need are the world’s multinationals.”

I totally understand his argument. Sure the world’s poor people are an untapped market for large multinationals and there is money to be made. But does this Indian villager really need to spend money on toothpaste when he can get free twigs from a tree to brush his teeth. I mean, is that really an effective use of his/her wage, over say clean water or a flushing toilet.

It really comes back to how we measure poverty. And I think we do that by living standards. Therefore the fact that someone has a toothbrush, raises their livings standards and moves them out of poverty. Please someone explain how this works in intricate detail.

This also doesn’t help the country that this new toothbrush owner lives in. All the money he spent on it his lovely toothbrush gets flown out of the country back to the United States (or somewhere else equally rich). The country doesn’t really benefit from the creation of jobs to make the toothbrush, nor any money from taxes (other than a value-added tax) earned from the manufacturing plant (land tax, capital gains tax, company tax).

The author finally gains some considered thought and suggests:

“Am I saying that there is no role for government in this sort of work, that politics is useless? Far from it. Government and civil society – politics, if you like – are urgently needed to foster the basic conditions, such as physical security, that allow the poor to connect to the world economy.”

Thank God (Side note: I don’t believe in God. Who should I thank?). The governments of developing countries need to apply restrictions on multinational companies operating in their country if they want to extract some of that wealth for themselves. Don’t sell out to McDonald’s!