Thinking ahead about Bangladesh

As leaders of the G20 arrived in Seoul in November of last year, Korea marked its position to serve as the link between the developed and developing world.

Stanley P. Sakai

By Stanley P. Sakai

As leaders of the G20 arrived in Seoul in November of last year, Korea marked its position to serve as the link between the developed and developing world.

Its qualifications are strong: not only has Korea crossed the developed line in a single generation, it also has shown the way for how to cross that line — through education, public-private sector collaboration and technological advancement.

As Korea fulfills this linking role, I believe this road will lead through Bangladesh.

Largest foreign investor in Bangladesh: Korea.

First R&D Lab set up in the country, Samsung Electronics. Trade opportunities are large, not only in the garments sector for which Bangladesh is well-known, but also in infrastructure — whole new electricity, roads, communication and other infra systems are poised for development within Bangladesh.

Korea, as the lowest cost advanced provider of these infra areas, is poised to profit handsomely from these opportunities.

And Korea will certainly be among the fastest growing when it comes to making donor investments in the country over the next several years.

And as the two countries engage more, I believe both sides will learn and benefit, for just as there is much to learn from Korea, there is also much to learn from Bangladesh.

Organization

The country is well-known for its turbulent history. The country emerged from a brutal war in the early 1970s not unlike Korea 20 years before.

And its problem on its checklist include high levels of poverty, natural disasters in floods and cyclones, environmental issues with their rivers drying up and an unbelievable population density — 160 million people packed into a land mass that is only just bigger than Korea.

And big problems bring new thinking and new solutions.

One noted philanthropist said to me recently that “Bangladesh is the Silicon Valley of Social Innovation.”

And she is right. For in Bangladesh, there are organizations that have eclipsed the Western organizational model of social and economic problem solving — they blend private sector initiatives and profits with public sector purposes.

One such organization is BRAC, one of the world’s largest development organizations.

They operate one of the world’s largest micro-credit organizations — with over seven million borrowers, one of the fastest growing banks in country, the largest retailer, and a number of agri-businesses.

Their businesses and operations have created over eight million jobs in the country.

And profits from these ventures are sufficient to fund about 70 percent of their development activities.

They are one of the largest private operators of primary schools in the world, operating 30,000 BRAC primary schools that educate a million primary school students.

These are generally one room schools in the rural parts of the country where the country’s poorest are taught.

In the area of health services, BRAC has 80,000 health volunteers that educate and advise Bangladeshi in the poorest areas of the country daily on health matters.

Value

The value of money takes on a different meaning in Bangladesh.

It costs less than $3 per month to educate each child at the BRAC schools, and yet their students perform better than the national average on test scores.

A total of $2 per month includes teachers’ salaries, facilities fees, schoolbooks, etc.

And the average mobile phone bill of a Bangladeshi is about one tenth that of what is paid in Korea.

And yet, do you know that the return on capital of the top Bangladeshi mobile phone provider is better than that of the leading Korean mobile provider?

Lowest cost delivery takes on new meaning in Bangladesh and other parts of the developing world as low price does not mean low profits or low value.

Businesses have learned from BRAC on the power of using social innovation — socially organizing market delivery in new and unique ways to spur entrepreneurship, create employment opportunities and drive down costs.

Management

A year or so ago, I met a TV producer from Japan’s NHK Broadcast Network who was doing a prime time documentary of the impact of globalization on cities.

She had selected only a few cities in the world to spotlight including London, Cairo and Dhaka, Bangladesh.
I asked her, “Why Dhaka?”

She was drawn to the energy and entrepreneurship of the Bangladeshis — people always in motion and working at a rhythmic pace.
And almost everyone I meet makes the same comments. Harnessing this high energy to help drive your business or organization is a never-ending quest.

I know from first-hand experience.

About five years ago, my firm organized a joint venture with BRAC to deliver low cost wireless broadband Internet to the country.
All metrics appeared right — very low Internet penetration rates, very high population and population density, a growing economy of over 6 percent per year.

These dynamics did prove to be right.

But what we found, not surprisingly in retrospect, was that our management teams’ “Western methodologies did not work so well in-country — that taking action that resonates with local management and staff had far more effectiveness than budgets, performance metrics and bonus plans.

We live in a globalized world, but what brings energy to an organization is far more often local.

So this is what I believe Bangladesh can offer — a re-thinking of organization and social innovation, new ways to think about value delivery to your customers and the potential for developing a more resonant management style, especially when thinking of multi-cultural workforces.

There is so much that Korea can offer Bangladesh as an integrative link for development.

At KDI School, we have trained approximately 200 Bangladeshi civil servants on economic and private sector development through workshops and training programs in Dhaka and Seoul.

When they come to Seoul, they will integrate into the Korean experience—the speed and efficiency, the use of IT to streamline organizations, and the “Yes we can” spirit.

This is what Korea can teach Bangladesh and other parts of the world.

Stanley P. Sakai is the managing director of gNET DEFTA Development Holdings, an investment firm based in San Francisco that is targeting the build-out of Wireless Broadband Networks in developing countries.

He also is a visiting professor of KDI School of Public Policy and Management where he teaches courses on management and has also consulted through KDI School on the World Bank related to human resource training projects. Sakai can be reached at stanley.sakai@gmail.com or ssakai@deftapartners.com.