Promote Social Businesses in Bangladesh | The Daily Star
12:00 AM, January 19, 2013 / LAST MODIFIED: 12:00 AM, January 19, 2013

Promote Social Businesses in Bangladesh

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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.

The writer is Head of Advocacy at shiree. E-mail: shazia@shiree.org

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