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The market creation approach aims at involving the private sector to deliver aid more effectively, either by opening a market for products and services that are relevant to poverty alleviation or by linking small farmers to value chains that allow for higher incomes and better livelihoods.

Poverty Alleviation as a Business - origin of the study

Urs Heierli, the author of this series of studies, was posted in 1987 in Bangladesh to serve as country director of SDC, the Swiss Agency for Development and Co-operation. It was not such an attractive post at that time: Henry Kissinger had termed Bangladesh a "basket case" and, Brigitte Ehrler, had given her resignation from a high-ranking job at BMZ (the German Ministry for Development Co-operation) and written a book: "Meine letzte Dienstreise" (my last duty trip), after having recognised that most development projects did increase the gap between the rich and the poor in Bangladesh. He was asking his predecessor, Erwin Baenteli, for a hint during the handover: "As many things have failed in this country; is there anything that works here?" In reply, and after sleeping it over for a night, he said: "I think all those activities driven by the private initiative of the poor may work". How right he was! Nobody, at that time, would have dared believe that private initiative taken by the poor could unfold the power to make a million treadle pumps work, plant a 100 million trees or produce a million latrines every year – all being a good business for the poor.