Aid: Supply-led versus Demand-led assistance

Supply-driven Aid Branding options
Left: Supply driven assistance – food relief delivered by helicopter. Right: Demand driven assistance – prototype ColaLife anti-diarrhoea kits

Consider the two pictures above – both are efforts to save lives – one is supply-driven the other demand-driven. Many would group these types of initiative together as ‘aid’ as opposed to ‘trade’ type activity. However, they are fundamentally different. In the first example a need is identified, in this case a need for food, and it is supplied. It is pushed out to the people who need it. In the second case, the ColaLife case, a demand is created for a commodity. The commodity, in this case an anti-diarrhoea kit, is first given a recommended retail price that people in remote communities can afford. Marketing is undertaken to turn need into demand. The commodity is then fed into the top of the distribution chain at a price that enables everyone along the distribution chain to make a profit fulfilling the demand. The demand for the commodity pulls the commodity into these remote communities.

Note how the word ‘need’ is associated with a ‘push’ system. And the word ‘demand’ is associated with a ‘pull’ system.

Supply-driven assistance is non-personal and is usually time-bound. Everybody in the same area gets the same thing (food, vaccinations, shelter, mosquito nets etc) at the same time.

Demand-driven systems are different. By definition, they are able to provide personal assistance at the time and the place that an individual needs it.

Historically, the majority of development assistance has been supply-driven and, generally speaking, we, the global community, have got pretty good at it. The trouble is that there is a limit to what supply-driven systems can achieve. For example, at the current rate of progress to reduce child mortality (1.8% per year since 1990) it will take more than 185 years for child mortality in less developed countries to fall to the levels in Europe and the USA today. Demand-driven systems like ColaLife may be part of the step-change in progress that we need in this area.

100 Children 1 in 7 vs 1 in 185
Child mortality rates in sub-Saharan Africa vs those in the UK today. At the current rate of progress it will take more than 185 years for mortality rates in Africa to fall to the mortality rate in the UK today. ColaLife thinks that demand-driven systems might be part of the answer.

Consider this recent quote from Abdulai Tinorgah, who heads the UN Children’s Fund’s Child Survival and Development section in Nairobi:

“The challenge is not what to do [to stop a child dying from dehydration from diarrhoea] but how to deliver [ORS] at very high coverage. Whereas blanket interventions such as measles immunisation, vitamin A supplementation, and bed-net distribution have been scaled up significantly over recent years, those that have to do with case management have shown much less progress.

“Because these require a health system ready and able to respond to individuals when they need care, there are special challenges especially of access, demand generation and logistics.

“Social marketing and private-sector initiatives, coupled with better distribution and public information, are among the ways ORS coverage could be increased.”
Source: Follow the fizz, save a life, IRIN News, NAIROBI, 2 March 2012

The other characteristic of supply-driven assistance – delivered as it usually is – is that it does nothing to strengthen local systems. Indeed it will undermine any local systems that may exist. On the other hand, demand-driven systems, such as ColaLife, have the potential to strengthen existing systems and put money into the pockets of people in the local communities being provided with the product or service.

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[This blog post was first published through the Business Fights Poverty Network]