Economic Development
TANA: Organic Spices Enterprise Development Project
History:
The region of Chocó in Colombia has been impacted by violence for years. Few economic opportunities exist, especially for displaced single women who are often the sole providers for their families. In this context of endemic poverty, a group of women in the area, led by Maritza Parra Córdoba, formed La Red de Mujeres para el Desarrollo (the Women’s Development Network) 13 years ago. Together, they began growing, processing, and selling organic condiments, such as basil, cilantro, ginger, and turmeric under the brand name TANA. These spices are the only certified organic condiments produced in Colombia and, TANA, with assistance from the Pan-American Development Foundation (PADF), has become one of the most successful projects in the troubled Chocó region.
How CGSGI’s support will ensure TANA’s success:
CGSGI is working to help TANA become a self-sustainable business and reduce its reliance on NGO support. By identifying new market opportunities, introducing appropriate technology improvements, and providing rigorous monitoring and evaluation, CGSGI is assisting TANA to increase its sales and grow, thereby creating additional jobs for the community. Increased incomes will allow the growers to improve their families’ access to education, nutrition, and health care. By operating independently, TANA truly will be an example and an inspiration for other aspiring entrepreneurs in Chocó.
Cartagena Hotel Supplier Development Project
Among Colombia’s large cities, Cartagena has the highest poverty rate and has received a disproportionate share of internally displaced persons. Despite these discouraging statistics, Cartagena attracts millions of tourists each year and as a result, the hotel industry has thrived. Many small businesses and cooperatives in the Cartagena area are poised to meet these hotels’ needs for goods and services, but today many Cartagena hotels currently buy goods from Bogotá, often at high costs, because of shortfalls in the quality and quantity of goods produced in Cartagena.
How CGSGI is promoting entrepreneurship:
CGSGI, working with the government of Colombia, the National Hotel Association of Colombia, and the United States Agency for International Development, launched the Cartagena Hotel Supplier Development Project, which is promoting local suppliers. The program is working with six hotels in the Cartagena area to identify their buying requirements as well as simultaneously providing capacity-building assistance to producers in Cartagena, so they can supply the hotels with timely and high-quality products in sufficient quantities. The hotels have committed to purchase 20 percent of their requirements over the next three years from the suppliers participating in this project. The businesses produce agricultural and food products, textiles, and services (grounds-keeping, pool maintenance, etc.) needed by the hotels, thereby creating jobs for residents of under-resourced communities in and around the Cartagena area.
Investment Fund
Although Colombia’s economy has grown significantly in recent years, small and medium enterprises (SMEs), which employ approximately 30 percent of the labor force, often face challenges in accessing the financing that would enable them to grow.
How CGSGI will help SMEs:
CGSGI recognized the potential of SMEs in Colombia to diversify the economy and promote economic development. In April 2009, CGSGI and Fundación Carlos Slim announced the launch of a $20 million investment fund that will invest in SMEs that are seeking to expand but are underserved by existing capital markets. The fund aims to increase job creation and incomes, and to provide SMEs with capacity-building assistance (in addition to financing) to enhance their compliance with financial reporting, management accounting, and corporate governance standards. Investments focus on firms that are committed to job creation in Colombia.
Expansion of the Poverty Reduction and Alleviation Program (PRA)
What is PRA?
Over the course of the last decade, Peru has experienced an economic boom, which has translated into sustained growth. This rapid expansion has helped to reduce the national poverty rate by about 15 percent since 2002. In spite of these gains, though, in 2008, about 39 percent of the population still lived below the poverty line. To address this problem, CGSGI, in partnership with Compañia Minera Antamina S. A., is improving and expanding the Poverty Reduction and Alleviation (PRA) economic development model in Peru’s Ancash region. The PRA model is a market-based approach to develop and link mainly agricultural local businesses with existing national and international markets.
Why the PRA model works:
The key to PRA’s success is its focus on demand – jobs and wealth are created by identifying a sustainable demand for a product, and working backwards to meet it.
PRA’s business component promotes market-driven enterprise growth and development through its Economic Services Centers (ESCs), which provide beneficiaries with expertise ranging from technical assistance for producers to market identification and consulting for small enterprises.
CGSGI’s role:
CGSGI and its partners are improving the PRA model by expanding its geographic reach, and applying more rigorous monitoring and evaluation to better measure the program’s impact on poverty reduction. The addition of two satellite ESCs in remote areas of Ancash will allow PRA to reach a broader range of clients, many of whom are classified as very poor; increase the area of impact of the program to 85 percent of the region; and generate sustainable income and employment for approximately 1,500 additional producers each year.
