Sunday, January 22, 2012
Business
Bangladesh can be social business champion
Social business promises to make Bangladesh a champion in solving global problems, Hans Reitz, founder of Grameen Creative Lab, said yesterday.
"The country has its own problems to solve. It has suffered a lot from poverty, natural disasters, malnutrition, illiteracy and many other social problems," he said.
"Bangladesh will probably have to handle similar problems in the future as well. It is a place where anyone can find problems easily."
But there is a brighter side to it.
The experiences of dealing with so many social problems for so long can help solve social ills around the world. "It is just a matter of time that Bangladesh becomes a champion in social business to solve social problems," Reitz said.
The 45-year-old spoke at a gathering at The Daily Star Centre in Dhaka. His German-based lab promotes social businesses and the principles of Professor Muhammad Yunus.
The profits of capitalist businesses are private and mainly used for personal gratification, Reitz said. "But my enjoyment should not take away other people's enjoyment."
Reitz said the capitalist businesses cannot be social businesses because they operate on a mission, whereas social businesses hinge on values.
Social business ventures should not be tax-free or have special licences to operate, he said. "It is a normal business. Unlike not-for-profit business, we are part of the business community and have to pay tax."
Entrepreneurs who want to set up social business ventures should not look for assistance from the government, Reitz said.
Social business must make profit to keep ventures up and running, he said. "You have to be capable to pay salaries to your employees at market rates."
"But the equity of the company should always be dividend-free, as social business does not allow investors to take away dividends. They will however be able to take out their initial investment," he said.
Many argue that there are many established good businesses around the world, which can take care of social business, said Reitz. "But that is not the reality."
"My village in Wiesbaden in Germany is one of the richest and modern villages in the world. It has no electricity crisis or pollution. Still, many people are poor. There are also many elderly people who are not taken care of by anybody. We know about them when they die."
"It means that as a company or society, even if you reach the highest point, you do not get a solution, as the system is self-centred. It is all about a mindset."
The social activist said Bangladesh is set to achieve its millennium development goals (MDGs) by 2015. "We have to go on after the country achieves its MDGs. We also have to have ownership of the national aims."
He said young entrepreneurs should not worry about the possibility of a misuse of the business concept.
"Professor Muhammad Yunus has developed the idea of microcredit. Now there are thousands of organisations that have been built on the theory in Bangladesh and abroad. Some have misused the theory to maximise its own profits."
Reitz, who has turned all of his 12 companies in Germany into social businesses, said social business can be used as a tool to solve some of the world's most pressing needs. "The simplicity of the concept is, it works for the community and people."
He said new technology can help entrepreneurs solve many social problems.
Rokia Afzal Rahman, chairman of Mediaworld Ltd, the owning company of The Daily Star, said many women entrepreneurs have contacted her to say that they want to launch social businesses, however small they may be.
Mahfuz Anam, editor and publisher of The Daily Star, said, "Social business tells us to think out of the box and think of business differently."
"We all know that the world has progressed a lot. But there are also a lot of failures. We produce enough food; still many people go hungry."
"So, social business applies to everything, including our lifestyle. This is actually the beginning of a journey of new creativity."
Shah Husain Imam, associate editor of The Daily Star, said he thinks social business is an answer to greed.
He said social business practices should be audited so that the targeted people can reap the most benefits from the effort.
Niaz Rahim, a director of Rahimafrooz Group, a leading business house, said using CSR funds, businesses in the country have launched various programmes that have created jobs and lifted many out of poverty.

Saturday, January 19, 2013
OP-ED
Promote Social Businesses in Bangladesh
Shazia Omar
One thousand eight hundred extremely poor women in Rangpur are not only lifting themselves out of poverty but also contributing to our national foreign currency earnings through the export of their goods to high-end shops in Canada, Australia, France and England.
These women should be recognised as national heroes! Previously destitute, deserted by their husbands, raising their children on barely one meal a day, with no education, these women had no means to earn a living. The indigo-dyed bed sheets, scarves and shirts they learnt to hand make in a bamboo-mud hut factory on the side of a dirt road in Rangpur now fetch attractive prices in the global market and allow them a chance to live as human beings. This colourful and innovative solution to extreme poverty is one with great potential for replication and expansion as the global market for indigo products is far from saturated.
Rangpur, where people have long faced struggles with seasonal hunger, offers very few job opportunities for illiterate, asset-less, landless women. With these women in mind, CARE set up a social business called NCVI -- Nijera Cottage and Village Industries (NCVI). NCVI trained these women to make indigo dyes and also gave them shareholder status in the company. The practice of transferring ownership to workers is one that needs to be promoted in Bangladesh, where cheap labour is often exploited. How long can a nation prosper on the bleeding hearts of its poorest women? If we are to eradicate extreme poverty, equitable practices must be promoted. NCVI is a good example of a promising social business.
However, there are challenges within this model. The women entrepreneurs who own NCVI lack the managerial skills and marketing capacity to run their business alone. CARE, now under the funding umbrella of shiree, manages NCVI. shiree, also known as The Economic Empowerment of the Poorest, is a £65 million partnership between the governments of UK and Bangladesh, which aims to reduce extreme poverty in Bangladesh.
Women consumers around the world appreciate the eco-friendly, pro-poor products and are willing to pay high prices that make this production worthwhile despite the shipping costs involved, if the design is extraordinary. Continuous product development is necessary to hold on to market demand. Here again, NCVI women require extra support. They lack the exposure necessary to invent designs that appeal to European tastes.
Apart from business, our heroes face a plethora of other challenges. A few months ago, I led a group of seven Members of Parliament to Rangpur and Nilphamari to visit communities of extremely poor women, to explore how national policies may be able to better support them. Extremely poor women, such as Kajali, an NCVI entrepreneur, were keen to avail the opportunity to demand support from their parliamentarians.
Kajali's husband left her some years ago to search for employment in Dhaka. She now lives with her elderly mother and disabled son. Kajali said: "We need power to run the fans in our factory. We need social safety net coverage for the elderly and the disabled. We need access to free and good quality health care. The days I am ill, we have no money to eat, and one minor illness can wipe out all my savings."
The MPs on the trip were impressed by the hard work of the NCVI women and themselves purchased several items to carry home as a reminder of their responsibility to these women. (Albeit, at a much haggled price, a fifth of what it was truly worth!)
We wait to see whether or not the MPs actually ask the government to institute policy or budgetary changes to benefit these women. We wait to see whether or not the MPs learnt from NCVI's success so that they promote similar establishments in their constituencies. We wait to see whether or not the MPs make the most of their positions of power to serve their people.
It is entirely the responsibility of the government to establish proper infrastructure and power to encourage business growth in the northwest. Without adequate incentives and an enabling environment, these regions will remain depressed. There will continue to be a dearth of jobs for the growing population and exacerbated conditions of poverty and urban migration.
Even if the government shows signs of administering strategic job-creating changes in the north, industrial expansion will take time. In the interim, it is possible to facilitate alternative income generating opportunities, such as cottage industries like NCVI.
Distributing khas land or unused sandbars to the poorest to grow crops and earn a livelihood can help. Projects such as Practical Action Bangladesh have demonstrated great success in helping extremely poor people climb out of poverty through sandbar cropping, a simple technology that makes use of dry riverbeds during the winter.
Extremely poor women have the strength and determination to earn their own living but we need to provide them with a means to do so. Donors, NGOs, the government and the private sector, all have a role to play.
Last year, NCVI exported $70,000 worth of products. Each woman working there earns between Tk.1,800-6,000 per month. Setting up the factory cost approximately Tk.140,000 lacs, apart from the space which belongs to NCVI and was purchased with support from donors. Can we expand the potential of this home-grown solution to poverty?
Perhaps other donors, non-resident Bangladeshis or the Export Promotion Bureau could help NCVI find new buyers and expand its market.
NCVI is a cottage industry owned by the beneficiaries, women who were previously extremely poor, but they are made to pay income tax since they are now "company owners." There are no laws or regulations that govern social enterprises, though other countries such as the UK and USA have separate laws, thus a new policy is needed. Who will lobby for such policies?
Professor Yunus, Rehman Sobhan and other prominent thinkers in our country have been espousing the value of social business models where workers are also shareholders. In such a model, company owners can choose what percent of their profits they want to share. It need not be a huge percentage. The sharing in itself would represent a shift in mindset towards a space more progressive and pro-poor. Profit sharing is the only just way to go about in large businesses such as those of RMG companies.
The governor of Bangladesh Bank speaks of his love for the people. We hope he will use his current influence to support the institution of pro-poor policies, quickly. We hope other NGOs searching for solutions will learn from leaders such as CARE and PAB. We hope private sector companies or wealthy individuals looking to help our nation will step up and replicate job-creating initiatives such as NCVI. We hope our heroes will not be left out on their own without the support they deserve from those who are able to give it.

Tuesday, June 28, 2011
Business
Bangladesh to mark Social Business Day
Bangladesh today celebrates Social Business Day along with about a dozen countries in an effort to contribute to solving some of the deep-rooted problems the world faces.
On the occasion, Yunus Centre, a hub of social business movement, will organise a daylong event at Sonargaon Hotel in the city, in association with Grameen Telecom Trust, Bangladesh-German Chamber of Commerce and IHS Alliance Fibreglass.
It will be a platform for businesses, nongovernmental organisations, students and citizens to learn about the latest developments in social business around the world, and the know-how to use the concept to create their own ventures to fight social problems, organisers said.
The theme for this year's event is "achieving the millennium development goals through social business".
"This year, we have dedicated the event to the idea of social business solving millennium development goals," said Nobel laureate Professor Muhammad Yunus in his greetings on the eve of the second edition of the event.
The 2006 Nobel peace prize winner has developed the concept of social business, a type of business dedicated to solving a social problem.
A social business is a non-loss and non-dividend company where investors can recoup their dividend but nothing beyond that. All profits will be used to improve the products and service offered, and/or to increase the reach of the company.
Alongside Bangladesh, Social Business Day is due to be celebrated in several countries, including Peru, Germany, Argentina, China, India, Portugal, Poland, Uganda and Brazil.

Friday, July 13, 2012
Professor Yunus, Grameen and social business
S. M. Rashed Ahmed
Much has been written and said about our Nobel laureate Prof. Yunus and Grameen; hence I am not quite sure from where to begin. In the history of human endeavour so much is owed to this single individual who, through his innovative approaches for creating a world without poverty, has set in motion an irreversible process for a quiet revolution for historic social change.
It is no exaggeration to say that the name of Bangladesh has become synonymous with Prof. Yunus and Grameen. This is based on my personal experience of years in the diplomatic service.
In this context, I wish to record two events which stand out in my memory. The first one is from when I was Bangladesh ambassador to Japan. It is customary in Japan for their Imperial Majesties to host a luncheon for the ambassador and his wife. During a cordial luncheon meeting both Imperial Majesties devoted most of the time to a discussion on Grameen and Prof. Yunus. We were fortunate to have been able to apprise them of the work of Grameen and its pioneer as Prof. Yunus had visited Japan earlier.
The other event, which was to leave an indelible imprint on my mind about Grameen was when I took up my assignment with UN in Kosovo. To my surprise, I was warmly greeted by the local K Albanians and the K Serbians including the Monks of the Monastery, where foreign persons were looked upon with suspicion. The reason for my acceptability, which I was to find out later, was that Grameen Bank had established its presence in that area before I went there. They knew about Bangladesh and Prof. Yunus. The poor women were earning their livelihood from the microcredit programme where jobs were scarce. My wide public acceptance as the UN administrator helped in resolving the conflict through face to face dialogue and negotiations. Thanks to Grameen.
During my assignment Prof. Yunus visited Kosovo twice. I was told by the SRSG Steiner and other colleagues that they were deeply impressed by the vision and commitment of Prof. Yunus to the eradication of global poverty and for peace.
Recently, at the "Social Business Day 2012" at Savar, which incidentally coincided with the birthday of Prof. Yunus, I joined his numerous friends and well wishers to celebrate the achievements in Social Business from around the world. I will briefly touch on the opening ceremony and the Social Business based on my rudimentary knowledge of the subject.
The presence of such a large number of national and foreign participants; the signing of MOU on a Social Business Project in Haiti, which in the words of Prof. Yunus was a "seed from Bangladesh being planted in Haiti;" the presence of Astronaut Garan who read Prof. Yunus' book Creating a world without poverty in the space station and committed to help the poor through Social Business; the starting of Social Business by Japanese company Felissimo Corporation; the reiteration of financial commitment and support to Social Business project by the Managing Director, Grameen Credit Agricole Microfinance Foundation (France); and support to Social Business project by others including Patricia Lynch, Vice President, Kaiser Permanente, USA, Eric Lesueur, Project Director, Veolia Water, France, Rokia Rahman, Chairman, Media World Ltd, Bangladesh, who spoke about her intention to start a Social Business project involving supply of seeds and fertilizers to the poor farmers; the notable presence of Ambassador Shiro Sadoshima of Japan, which underscored the support of the Japanese government to the concept of the Social Business, were events of great significance for Grameen, and its founder.
Like Grameen, the idea of Social Business is increasingly gaining acceptability around the world. As Prof. Yunus himself explained, the economic and financial crisis in Europe and the West impacts negatively on the poor in Bangladesh and elsewhere. The system based on traditional capitalism has failed to meet the challenges facing humanity; it is time to redesign a "new kind of capitalism that serves humanity's most pressing needs." This will change the current money-centric system and reverse it by putting money in its place and human beings as the basis of the new capitalism; profit seeking motive will be replaced by motive of serving the poor and the vulnerable. Social Business is aimed at addressing the problems of global poverty, development, environmental hazards, health care, safe drinking water, intertwined with economics, finance, food and agriculture, energy, and massive youth unemployment and social crisis, etc.
That the social business concept is catching up globally is clear from the fact that it is being "adopted by leading corporations including BASF, Intel, Danone, Veolia, and Adidas as well as entrepreneurs and social activists in various parts of the world. Significantly, the idea of Social Business is being embraced at the highest academic levels abroad. To cite some examples: the Grameen Creative Lab (GCL) at Weisbaden; Glasgow Caledonian University partnering with Grameen on a Social Business project aimed at enhancing healthcare in Bangladesh; the new California Institute of Social Business based at the California State University Channel Islands Campus; Kyushu University in Fukuoka, Japan, creating a Grameen Technology Lab partnering with Japanese companies; Yunus Center at the AIT Bangkok and HEC, the prestigious international business school in Paris creating a Social Business chair. For a fuller understanding of the Social Business concept it will be worthwhile to read the book Building Social Business by Prof Yunus and to contact the Yunus Center at Grameen HQ Dhaka.
Prof. Yunus is not only the pride possession of Bangladesh but also of the world at large. Let us forge a national consensus on preserving the integrity, independence and autonomy of Grameen. Let us utilise the precious service of our only Nobel laureate to strengthen Bangladesh, particularly by lifting its international image which has been badly bruised by the unacceptable controversy created about him and Grameen. Crucially, it will help realise the twin objectives of our foreign policy, i.e security and development. Security, particularity non-military, involves poverty, development, safe water, food, energy and climate change. We need to work collectively to achieve a functional democracy based on the rule of law, good governance and human rights, strong economy and a credible defense force to achieve the national aspirations of a strong, peaceful, stable, self-reliant, multi-religious and multi-cultural Bangladesh.