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Can Small Projects Make a Big Difference? Dev't Marketplace 2003

Innovators with ideas ranging from training rats to detect disease, to growing chili peppers to stop elephant crop damage, descended on the World Bank's $6 million Development Marketplace competition earlier this month and left with seed funding to turn their ideas into reality. Join us for an online discussion with Development Marketplace organizer John Wilton, the World Bank's Vice President of Strategy, Finance and Risk Management.

Guna Raj Pathak:
Dear sir, May I know that only affiliated individuals, organisations have the rights to put up the innovations? or if some individuals if willing to participate independently ?any prohibitions ?
Bob Watson:
DM encourages applications from anyone with an innovative idea in development. The only requirement for eligibility is that applicants submit their idea in partnership with another group. These partnerships, in the case of individuals, should be with NGOs, government agencies, universities, or other "public purpose organizations". But as you can see from some of our past success stories, we find good ideas from individuals private firms, NGOs, academics and many other sources - even World Bank staff.
Dr. Manoj Varma:
The Government of India has a lot of projects and schemes which will fulfill each and every need of all sectors , but due to several reasons like beauraucratic indifference, lack of information at grassroots level, lack of confidence in Government machinery etc. instead of introducing new projects, is it not a better alternative to look for better ways to strengthen the existing infrastructure so as to make it more effective?
Bob Watson:
The World Bank works with governments and through governments to address these kind of sectoral and country-wide issues and we'll continue to do that. The Development Marketplace is intended to allow the Bank to reach beyond governments to the grassroots. We see these activities as complementary and not mutually exclusive.
MAUREEN KISAKYE:
Does the money have to get spent in one year?
Bob Watson:
Yes. We ask people to trial or pilot an innovative approach so we ask them to try to achieve results within a one year period to begin to demonstrate whether the approach is feasible. However, we recognize that in start-up activities, in innovation activities, things don't always go as planned. So in some cases we grant a grace period in recognition of unusual circumstances. For instance, in 2002, we funded an education project in China which was delayed by SARS. We were happy to allow them more time to finish up. This is one reason why we ask project teams to focus on goods and services rather than conferences, because it's easier to measure results within a one year period, although we recognize that measuring development impact requires much more than a one year horizon.
MAUREEN KISAKYE:
How do you ensure that the money is well spent?
Bob Watson:
Projects do not receive all of their grant funding up front. Rather they are paid in tranches tied to project implementation milestones so project teams cannot receive a tranche of payment prior to completing the previous milestone. We assign a World Bank staff person (almost always in the country of implementation) to monitor and supervise project progress, but this person also plays an important role in advising project teams and disseminating success stories to the rest of the World Bank and the development community.
MAUREEN KISAKYE:
Does the World Bank integrate any component of these projects into regular World Bank projects?
Bob Watson:
We've had several success stories recently in this respect. One of our 2000 winners, "weather-based" index insurance for small farmers, was recently rolled out by the International Finance Corporation and private insurers in India on a pilot basis. In addition in 2002 we funded an internet-based credit bureau for micro-finance institutions in Benin. An upcoming private sector development loan in that country now plans to incorporate a microfinance credit bureau as part of the loan activity. And going back to Roll Back Malaria, which was funded in 1998, malaria eradication is now a part of 25 executed or planned loans that the World Bank has made in Africa. Still, we have a ways to go on this dimension. Bear in mind that DM grant funds organizations at most $250,000 to test and pilot an idea, whereas World Bank loans tend to be much larger loans co-ordinated through sovereign governments. So it is important to prove-out some of these innovations before incorporating them into such large scale activities.
MAUREEN KISAKYE:
How did the Development Marketplace get started?
Bob Watson:
Development Marketplace started as a response to the need to find internal innovations in products and services coming out of the World Bank's Strategic Compact in 1997. That approach yielded a number of new ideas like the "Roll Back Malaria" initiative that were considered successful enough to warrant opening the process to outside ideas in 2000. That year, when we first opened the competition, we received over 1200 applications from over 100 countries and that was the first signal that we were on to something different. And from there we've continued to hold Development Marketplace global competitions every 18 to 24 months. This year the process was almost entirely externally-focused where all but two of the 47 projects selected were from outside the World Bank Group. This has turned out to be a great way to find innovations on the ground that we might never otherwise come across.
MAUREEN KISAKYE:
which projects in the past have been particularly successfull? do those successful projects share common elements, or are they all different?
Bob Watson:
Let's start by discussing an outside evaluation of DM projects that was done in February of this year. That work looked at projects funded in 2000 and found that about 40 percent were worthy of additional investment and attention. This is a very good number for a venture capital type approach, which many venture capitalists would be delighted to have in their portfolios. Some common threads of projects thought to be successful include: 1) local partners on the ground to manage implementation, 2) projects that focused on delivery of goods and services, rather than conferences, books or reports, and 3) projects that were focused and did not attempt to deliver "a Christmas tree of services". In addition to the 40 percent, the evaluation found other projects that were quite successful but not terribly replicable -- so for instance we funded one project in Brazil that successfully changed the law around squatters and land reform. While that was highly successful, it's not the kind of thing that you can take to seven other countries and scale up because the legislative context in each is very country-specific.
MAUREEN KISAKYE:
Development Marketplace has been running for several years now. Can you name a project that has begun making a difference on a large scale?
Bob Watson:
Several DM projects have begun to scale up in a significant way. We'll tell you about three here but encourage you to visit the DM web site for more details in the project portfolio section. In 2000, we funded a social entrepreneur in South Africa who had an idea to use roundabouts or "play pumps" as a way to generate potable water in rural areas. He won funding to install 40 "play pumps" in rural South Africa from DM. Since then he's gone on to install over 500 more with the support of the Kaiser Foundation Coca Cola, South African Breweries and the South African Department of Water Affairs. Roundabout recently signed a contract with the Kwa-Zulu Natal Department of Education in South Africa to install thousands more at rural schools, a contract worth about $10 million. This project is clearly on its way to making a large impact and various funders have approached them to expand into Mozambique and elsewhere in Africa. A second project is the Affordable Hearing Aid project which won funding at DM 2002. This project produces low cost hearing aids in India sells them at market rates in the developed world and uses the profits to subsidize low cost sales in developing countries. We funded them $100,000 and they have attracted another $2.7 million from additional partners including Acumen Fund, Lions Club International, and the Al Noor Foundation. They planned to distribute 10,000 hearing aids to low income people worldwide in developing countries. The third project -- also funded in 2002, in the Philippines -- is our e-commerce for farmers training program. We funded an ex-commodities trader to train small farmers on co-operatives to use computers and ultimately mobile phones to get real time pricing information on commodities they are growing to eliminate middle men and their markups and enable the farmers to make better decisions about buying selling growing etc. In just over one year, this project has reached 1900 farming co-operatives in partnerships with LandBank, Unisys and others. The enterprise itself is already profitable and trades over $50 million of agricultural products through its site and discussions are already underway to bring this approach to Thailand and other East Asian countries.
MAUREEN KISAKYE:
What happens to the projects are their year of funding is up? Is there any follow up on the part of the Bank or are the projects then asked to fend for themselves?
Bob Watson:
Most projects after their funding is spent continue on with implementation and monitoring of their impact. The sustainability beyond the initial funding period is an important selection criterion for the jury when deciding which projects to select. This is one of the reasons why DM asks for applications in partnership. We hope that at least one of the partners has the organizational and financial capacity to keep the project going. That being said, for more our more successful projects, DM actively follows up both inside the World Bank and with the broader community of organizations that fund innovation in development to spread the word about promising approaches that may be appropriate for others to fund. One nice example of this is a project we funded in 2002, "poison dart frog ranching to protect the rainforest" in Peru. This project aimed to create incentives for campesinos on the edge of the forest in Peru to generate income by preserving the forest and selling the frogs into the collectors market in North America and Europe. This project received $800,000 in follow-on funding from the Global Environment Facility to continue and scale-up. That is a particularly successful case but we know of many other projects that have received additional support from the Skoll Foundation, national and local governments, ILO, UNDP, USAID, the Swiss government, and other grantmakers in their efforts to keep their ideas on track.
Stevan:
Where does the money come from to support Development Marketplace? Do the same sources plan to support DM next year?
Bob Watson:
DM funding comes from a range of sources both inside and outside the World Bank. From outside this year, we had important funding contributions from UNAIDS, the Global Environment Facility, USAID, Microsoft, and a major global foundation which asked not to be identified. This funding supported projects in HIV/AIDS, biodiversity, climate change, information and communications technology, and other areas. In addition, International Finance Corporation contributed several hundred thousand dollars to support commercially oriented projects like digital divide data in Cambodia. Although several of these partners were joining us for the first time this year, our past experience with IFC and InfoDev suggests that partners tend to repeat their commitments.

Thank you for participating in the discussion.



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