There are two approaches to advocating international development: the old (international aid = top-down) and the new (market-driven = bottom-up). At the end of the day, international development calls for a combination of the two; yet the old approach – world bank, government-run programs, international NGOs, etc.— is still far too prominent. The good news is that the pendulum is swinging; Kiva, for instance, might turn out to be the World Bank of the 21st century.

IDE Myanmar has been a quiet but compelling leader in the new market-driven approach. IDE and organizations such as Kick Start have successfully lifted hundreds of thousands of farmers out of poverty on a relatively small budget. I predict that one of the leaders of these organizations is likely to win the Noble Peace Prize in the next decade. Their success hinges on their ability to build reliable distribution channels while manufacturing and marketing products their customers really want and need. As a Stanford graduate student, I have been fortunate enough to work with IDE Myanmar over the last three months to design an affordable rice thresher, which will be introduced to Burmese rice farmers within the next year. It’s been a wonderful experience, throughout which I’ve been thoroughly impressed by IDE Myanmar and its compassionate capitalist culture (business-like, but driven by mission).

I want to get people thinking about better practices in disaster relief. IDE Myanmar has emerged heroically in the aftermath of Cycle Nargis. IDE has no political agenda, and over the years has convinced the regime that it is solely interested in market-driven development. IDE is one of the only foreign organizations that has permission to operate freely in the affected region. I won’t get into the depth of the humanitarian disaster, but it is unbearable to think about the misery of the country’s 60 million citizens.

IDE is successful because it is locally based and has the distribution channels, manufacturing capacity, operations expertise, product design capacity, and social mission. IDE reaches 25,000 victims every day, helping to satisfy their basic needs of water, food, and shelter. For example, IDE figured out how to combine three of its products, the WaterPump, WaterBasket, and WaterGuard ($40 for a combo package), to bring clean drinking water to 145,000people per week. IDE Myanmar never thought about these issues before the cyclone. Instead, its daily operations were geared toward commerce: selling low-cost farming products through a nationwide retail channel. Even though that was a far cry from emergency aid work, IDE transformed literally overnight.

Katrina, Asian tsunami, Nargis, and most recently the Sichuan earthquake: natural disasters seem to occur every week and clearly nobody knows how to respond effectively. It is not a question of money. Most critics are upset with the institutions in place (think FEMA) but do not offer any realistic solutions.  We should take a hint from IDE’s successes in Myanmar and support market-orientated nonprofit organizations, or social-mission-orientated, for-profit companies, playing a more prominent role. Governments and international aid agencies should respond, but they should also let local organizations have the protagonist role whenever they deserve it. Just as the new approach to international development has increasingly become bottom-up, so should disaster relief efforts.

Do you agree?  How would you incorporate the IDE Myanmars of the world into the relief system?

imageLloyd Nimetz founded the online giving market While pursuing his MBA at Stanford Graduate School of Business, Nimetz has focused on for-profit business models that address social challenges. This summer he will launch a payments platform for India’s bottom billion.