BoP Strategies for fighting the Resource Curse

The paradox of plenty has plagued a number of countries in Asia and Africa. Terra Remer, explains the logic behind this phenomena very succinctly

"Local communities near resource deposits often suffer adverse social and environmental consequences inflicted by extraction operations. Natural resource dependent countries are more likely to experience civil wars, as witnessed this past decade in Sudan, Sierra Leone, and Indonesia." - Terra Lawson-Remer

Many regions have been trapped in these downward spiral of events. However, the resource curse is not inevitable: countries with good governance, benefit significantly from natural resource wealth. In his book, Alexander Stimpfle discusses the lessons of policy around bottom of the pyramid microfinance from Botswana. One of his suggestions is to use the mobile phone networks as a means to alleviate financial access concerns. The development of mobile phone infrastructure is still a challenge in countries with the resource curse.

There are lessons so be learnt from the strategies employed by telecom industry in India-
The Indian telecom industry has a huge customer base of $800mn. With a population of 1.2bn and quarter of the people living at or below the poverty line suffering for basic needs of food, clothing and medical care, affording cell phones should be a tough option for these people. However, Indian telecomm companies have revolutionized the space with innovations in infrastructure, low-priced devices and smart offers. Today, the largest share of revenues for these telecomm companies comes from prepaid mobile recharges that India's poorer sections employ. The telecom companies in India operate at very low Average Revenue per User but benefit form the user base. With cellular penetration projected to be at 97% by 2014, the Indian telcos seem to be doing a good job. At large, the challenges in many parts of India are corruption in government and lack of transportation infrastructure. With similar problems in the countries effected by the paradox of plenty, the Bottom of the Pyramid strategies for building infrastructure seem to be the direction to head towards.