Subject: ECONOMIST | BRAC in business

Date: Friday, 19 February, 2010, 3:03

Face value

BRAC in business

Feb 18th 2010
From The Economist print edition

Fazle Hasan Abed has built one of the world’s most commercially-minded and successful NGOs

PA

Arise, Abed

SMILING and dapper, Fazle Hasan Abed hardly seems like a revolutionary. A Bangladeshi educated in Britain, an admirer of Shakespeare and Joyce, and a former accountant at Shell, he is the son of a distinguished family: his maternal grandfather was a minister in the colonial government of Bengal; a great-uncle was the first Bengali to serve in the governor of Bengal’s executive council. This week he received a very traditional distinction of his own: a knighthood. Yet the organisation he founded, and for which his knighthood is a gong of respect, has probably done more than any single body to upend the traditions of misery and poverty in Bangladesh. Called BRAC, it is by most measures the largest, fastest-growing non-governmental organisation (NGO) in the world—and one of the most businesslike.

Although Mohammed Yunus won the Nobel peace prize in 2006 for helping the poor, his Grameen Bank was neither the first nor the largest microfinance lender in his native Bangladesh; BRAC was. Its microfinance operation disburses about $1 billion a year. But this is only part of what it does: it is also an internet-service provider; it has a university; its primary schools educate 11% of Bangladesh’s children. It runs feed mills, chicken farms, tea plantations and packaging factories. BRAC has shown that NGOs do not need to be small and that a little-known institution from a poor country can outgun famous Western charities. In a book on BRAC entitled “Freedom from Want”, Ian Smillie calls it “undoubtedly the largest and most variegated social experiment in the developing world. The spread of its work dwarfs any other private, government or non-profit enterprise in its impact on development.”

None of this seemed likely in 1970, when Sir Fazle turned Shell’s offices in Chittagong into a refuge for victims of a deadly cyclone. BRAC—which started as an acronym, Bangladesh Rehabilitation Assistance Committee, and became a motto, “building resources across communities”—surmounted its early troubles by combining two things that rarely go together: running an NGO as a business and taking seriously the social context of poverty.

BRAC earns from its operations about 80% of the money it disburses to the poor (the remainder is aid, mostly from Western donors). It calls a halt to activities that require endless subsidies. At one point, it even tried financing itself from the tiny savings of the poor (ie, no aid at all), though this drastic form of self-help proved a step too far: hardly any lenders or borrowers put themselves forward. From the start, Sir Fazle insisted on brutal honesty about results. BRAC pays far more attention to research and “continuous learning” than do most NGOs. David Korten, author of “When Corporations Rule the World”, called it “as near to a pure example of a learning organisation as one is likely to find.”

What makes BRAC unique is its combination of business methods with a particular view of poverty. Poverty is often regarded primarily as an economic problem which can be alleviated by sending money. Influenced by three “liberation thinkers” fashionable in the 1960s—Frantz Fanon, Paulo Freire and Ivan Illich—Sir Fazle recognised that poverty in Bangladeshi villages is also a result of rigid social stratification. In these circumstances, “community development” will help the rich more than the poor; to change the poverty, you have to change the society.

That view might have pointed Sir Fazle towards left-wing politics. Instead, the revolutionary impetus was channelled through BRAC into development. Women became the institution’s focus because they are bottom of the heap and most in need of help: 70% of the children in BRAC schools are girls. Microfinance encourages the poor to save but, unlike the Grameen Bank, BRAC also lends a lot to small companies. Tiny loans may improve the lot of an individual or family but are usually invested in traditional village enterprises, like owning a cow. Sir Fazle’s aim of social change requires not growth (in the sense of more of the same) but development (meaning new and different activities). Only businesses create jobs and new forms of productive enterprise.

After 30 years in Bangladesh, BRAC has more or less perfected its way of doing things and is spreading its wings round the developing world. It is already the biggest NGO in Afghanistan, Tanzania and Uganda, overtaking British charities which have been in the latter countries for decades. Coming from a poor country—and a Muslim one, to boot—means it is less likely to be resented or called condescending. Its costs are lower, too: it does not buy large white SUVs or employ large white men.

Its expansion overseas may, however, present BRAC with a new problem. Robert Kaplan, an American writer, says that NGOs fill the void between thousands of villages and a remote, often broken, government. BRAC does this triumphantly in Bangladesh—but it is a Bangladeshi organisation. Whether it can do the same elsewhere remains to be seen.

James Wilson PC (3 June 1805 – 11 August 1860) was a Scottish hat maker, Liberal politician and economist, as well as the founder of The Economist and the modern Standard Chartered Bank.

Contents [hide] 1 Early life 2 Business career in London 3 Journalistic career 4 Political career 5 Family 6 Works 7 References 8 External links

[edit] Early life

Wilson was born in Hawick in the Borders. A successful disciplined autodidact scholar from a Quaker family, he was destined to be a schoolmaster but hated it so much that he "would rather to be the most menial servant in [his] father's mill". After considering studying for election to the Faculty of Advocates, against his family religion, he decided to be schooled in economics. So at the age of 16, he became an apprentice in a hat factory. Later, his father then bought the business for him and his elder brother, William. They left Scotland and moved to London, England when James was 19, with a gift of £2,000 each (£130,000 in 2005 pounds).^{[citation needed]}

[edit] Business career in London

The brothers established a manufacturing factory that they dissolved it in 1831. Wilson continued in the same line of business with much success (his net worth was £25,000 in 1837, or £1,630,000 in 2005 pounds). During the economic crisis of 1837, he lost most of his wealth when the price of indigo fell. By 1839 he sold most of his property and avoided bankruptcy. However, in 1853 he founded The Chartered Bank of India, Australia and China, which later merged with the Standard Bank of British South Africa to form Standard Chartered Bank in 1969.^{[citation needed]}

[edit] Journalistic career

Wilson was generally opposed to privileging the Church of England, the secret ballot when it was proposed in 1853, and the Corn Laws. He wrote a pamphlet titled Influences of the Corn Laws, as affection all classes of the comminity, and particularly the landed interests. It slowly received positive feedback and Wilson's fame had grown. He then went on writing on currency, and especially The Revenue; or, What should the Chancellor do?. He started to write for newspapers, including the Manchester Guardian. In 1843 he established The Economist as a newspaper to campaign for free trade, and acted as Chief editor and sole proprietor for sixteen years. The Economist is still published today, now with a weekly circulation of over 1.2 million globally.^{[citation needed]}

[edit] Political career

Wilson entered the House of Commons as Liberal Member of Parliament for Westbury, Wiltshire, in 1847.^[1] Because of his economic experience prime minister Lord John Russell appointed him Secretary of the Board of Control (which ran the affairs of India) in 1848, a post he held until the government fell in 1852. He then served as Financial Secretary to the Treasury between 1853 and 1858, firstly in Lord Aberdeen's coalition government and secondly in Lord Palmerston's first administration.^{[citation needed]} In 1857 he was returned to Parliament for Devonport.^[2] He again briefly held office under Palmerston as Paymaster-General and Vice-President of the Board of Trade between June and August 1859 and was sworn of the Privy Council the same year.^[3]

In August 1859 Wilson resigned these offices and his seat in parliament to sit as the financial member of the Council of India. He was sent to India to establish the tax structure, a new paper currency and remodel the finance system of India after the revolt of 1857. However, he was in office only a year before he died. In 1860 he refused to leave the stifling summer heat of Calcutta, contracted dysentery and died in August of that year, aged 55.^{[citation needed]}

Strangely even though he contributed greatly to the financial set-up of the British empire in India, he lay buried unknown at a cemetery at Mullick Bazar in Kolkata. His grave was discovered in 2007 by CP Bhatia, an assistant commissioner of Income Tax, while he was researching a book on India's tax history. Due to the efforts of CP Bhatia the tombstone was restored by the Christian Burial Board, thus restoring some dignity to a man that was in a way one of the forefathers of the Indian Tax structure.^[4][5]

[edit] Family

Wilson married Elizabeth Preston of Newcastle-upon-Tyne in January 1832. They had six daughters, of whom Eliza, the eldest, married Walter Bagehot.^{[citation needed]}

[edit] Works

• Influences of the corn laws, as affecting all classes of the community, and particularly the landed interests
• Fluctuations of currency, commerce, and manufactures : referable to the corn laws

--- On Fri, 19/2/10, Jaime Pozuelo-Monfort <jpm254@hoyamail.georgetown.edu> wrote: