Copyright 2006 The Financial Times Limited 
                       Financial Times (London, England)

                           January  26, 2006 Thursday

SECTION: FT REPORT - INVESTING IN YOUNG PEOPLE; Pg. 1

LENGTH: 863 words

HEADLINE:  Models needed to build a future COMMENT: A UNDP initiative can help
young business people succeed, writes Sanjay Gandhi

BYLINE: By SANJAY GANDHI

 BODY:

   Young people represent a great proportion of developing country populations
and most of them are growing up in poverty, without access to needed goods and
services, and without sufficient opportunities for employment and building
sustainable livelihoods. Indeed, the demand for jobs intensifies each year.

   Investing in youth is crucial to achieving widespread poverty reduction, one 
of the aims of the UN's Millennium Development Goals (MDGs). Lasting solutions
must be found that will expand and evolve along with the youthful population.
Any investment must be made with a long term view and large, or regenerating,
funding pools. 

   To help harness the power of markets to give youth needed goods and services 
and livelihood opportunities, the  United Nations  Development Programme's
Growing Sustainable Business initiative works with the private sector to develop
business models that can stimulate local development and entrepreneurship. It is
vital that these solutions are profit-seeking, with incentives that justify
real private investment and where financial sustainability is embedded in the
design.

   While markets cannot meet every need, they can stimulate youth
entrepreneurship, especially among small and medium-sized enterprises, which are
the main engines of job creation in most developed economies.

   For young people SMEs are crucial. In Kenya, for example, the average age of 
those working for SMEs is 35 and SMEs employ 72 per cent of the workforce.
However, many of these young entrepreneurs face barriers, including a shortage
of capital and skills, and lack of access to markets and basic services.

   The Growing Sustainable Business initiative was created to work with
businesses, both large and small, to address these problems, making enablers,
including finance, available and helping forge links between small entrepreneurs
and broader markets.

   For the company or investor, it helps to reduce risk by making local
connections, co-funding research and feasibility assessments, and helping to
build the capacity of entrepreneurs to engage in partnerships as suppliers,
distributors or other contributors to the value chain.

   The programme operates at country level, focused on local needs and working
with local communities, entrepreneurs and government as well as global private
businesses. It is managed by a full-time GSB "broker" on the ground.

   For example, in Tanzania, Ericsson developed a business model to deliver
telecoms to the rural poor in a country where 90 per cent of the territory and
75 per cent of the population are not reached by telecoms networks. It involved 
detailed research, interaction with local regulators, operators and farmers to
design a model that suited the beneficiaries and was profitable for Ericsson.

   Importantly, this initiative has created a platform for a suite of new
applications, such as financial services, education and healthcare, to be
provided. It also prepares the ground for the creation of a new market and new
entrepreneurs - for biodiesel, an energy source which can be produced locally
and used to supply energy for the network base stations.

   In Madagascar, BFV-SG (the local subsidiary of Societe Generale) worked
through the GSB to develop a joint venture with a microfinance institution to
increase access to finance for SMEs, by providing additional capital and sharing
credit risk with the local institution.

   Similarly, Electricite de France is developing a rural electrification
business along with other partners that will provide access to electricity for
the Sava region, Madagascar's most productive vanilla-producing area, as well as
for 20 villages that lie in between. Rural electrification rates in Madagascar
are below 3 per cent.

   The GSB also plays a role in helping local entrepreneurs connect with larger 
companies through value chains, increasing both the productivity and incomes of 
the local businesses.

   In Kenya, Kevian Fruit Juices, a local, family-owned juice manufacturer, is
working to develop a purchasing plant in Thika that will create a local market
for mangos supplied by smallholder farmers. Farmers currently leave a
significant share of production to rot, due to lack of a local market and local 
processing for their produce.

   SABMiller in Zambia and Unilever in Tanzania are also working with the GSB
initiative on supply chain business models for local farmers - again creating
new markets and income-earning opportunities.

   These new business models - combining technology, local knowledge and
relationships - can have a lasting impact in poor communities by contributing
to jobs, entrepreneurial opportunities and key necessities for young people.

   These kinds of opportunities require markets that function, which is where
the private sector is best placed to play a catalytic role and where links and
partnerships between companies and local entrepreneurs can have substantial
impact.

   The UNDP, through its leadership of the GSB initiative and its brokerage and 
support roles, works at country level to help make these opportunities happen,
to benefit young people and their communities.

   Sanjay Gandhi is the global programme manager of the UNDP's Growing
Sustainable Business Initiative.

LOAD-DATE: January 25, 2006