Catalog

The Interview
Getting Down To Business

What lessons can nongovernment organizations teach ADB about how best to understand stakeholders’ needs?

By Bart Edes( bedes@adb.org )
External Relations Officer (NGO Liaison)

Mechai Viravaidya is engaged in a relentless pursuit to improve the well-being of Thailand’s poor by giving them the tools for a fruitful and productive life. Mr. Mechai chairs the Population and Community Development Association (PDA) of Thailand, a leading nongovernment organization (NGO) in the country.

PDA’s programs cover a diverse range of activities, including free vasectomies, income-generating efforts at the village level, forest replanting schemes, vegetable banks, relocation of industry into rural areas, mobile health clinics, environmental education programs, and a democracy project.

Through partnerships with businesses, PDA has helped impart entrepreneurial skills to the poor. In the following interview with ADB Review, Mr. Mechai shares his views on how to help the economically disadvantaged improve their situation, the potential of collaboration between civil society and the private sector, and what governments and ADB should do to encourage the poverty reduction efforts of NGOs.

You have advocated “the privatization of poverty alleviation.” How would you describe this concept?

The reason usually given for privatization by government is that government-operated businesses can be run better by the private sector—more efficiently, at less cost, etc.

If we were ready to make a big difference in poverty reduction, we have to use the same principle of privatization and get the business sector involved. I believe that over the last 30 years, we’ve been wrong and totally unsuccessful with poverty reduction because we use the wrong doctor and the wrong medicine.

We use government personnel, and we use the welfare approach with the poor. That doesn’t work in the long term.

The only way to get people out of poverty is to take them to the marketplace. Well, let’s look at people in poverty: what do they do? Some pick up garbage and sell it; some buy vegetables or raise animals, and sell them. Why are they poor?

Because they’re not very good at this, they’re not very skilled. They lack the business skills, how to produce, how to organize, how to finance, how to market. And they also lack financial opportunities.

So instead of using government officials and the welfare approach, what we ought to do is make them better at business. And who knows business? Business people. Government can do quite a bit, the private sector some.

But what the government cannot do, and it’s quite unfair to expect it to do so, is to train the people in rural settings to be better at business, and for that you have to use people who know business.

To get them involved, there should perhaps be a policy. The prime minister or the president of the country should come out and say, “Look, we would like all companies to participate, starting with a small company fostering one village, a medium-sized company fostering 10, and a large one fostering 100 or even more.” A bank with 2,000 branches can help 2,000 villages.

Now the word “foster” does not mean pour money into it. Companies identify two or three staff members who are keen on spending 2 or 3 weekends in the village and find out what potential exists in humans, raw materials, what they’re doing, and how it could be done better.

These business people sit down with villagers and then do a business plan with them. The company may then say, “Well, all right, we’ll lend you some initial seed money and in the second round you can go to the bank, or you can skip the first round and we’ll take you to the bank.” Now, these people know how to talk to the bank.

They’ll do the business plan, write it out in such a way, help the villagers negotiate, and then these people get going. After a certain period, maybe 3–6 months, you take the next 10 people, and then the next 10, so it’s fostering and, most importantly, transferring skills—business skills—not money.

The money is secondary; it’s the skills that are important. You know his father didn’t give Bill Gates big money. So it’s the same thing.

Mechai Viravaidya “ADB could do a great service...if it had a very clear policy of helping the governments it works with understand and promote the role of civil society and NGOs in their own countries”

I can demonstrate how companies go into villages and do this, and now no one is in poverty anymore in these areas. There’s proof, it’s not just a theory. It’s based on practice, and then we did the theory after the practice.

How can ADB foster privatization of poverty reduction?

ADB needs to be different from other development banks, and maybe to be the first to lend to more than the minority. All development banks lend to the minority—the government. The government’s not the majority. So ADB should start lending a small amount to civil society, to farmers’ groups, and so on.

It could expand as success occurs, but not lend only to governments, because government borrowing is mostly just for basic infrastructure, and supply doesn’t generate a demand as some people think.

I would like to see ADB develop a corps of NGOs that is going to be working with it in each of the Asian and Pacific countries, and help these NGOs expand the understanding between NGOs and ADB.

While that is going on, these NGOs also need to expand their relationship with the business sector because the business sector has more money than government, from which you are unlikely to get any significant amount. So these are the key issues.

ADB should build on the name you already are using, “private-public partnerships.” I’d like to add one more, “private- public and community partnership,” because the communities are the people we’re talking about and unless they’re involved then it’s a sort of “playing the hand of God,” “the master and the servant,” “the donor and the recipient,” and “the giver and the beggar.”

NGOs bring the community together with the business sector. NGOs have a good heart; we don’t have the best brain. But we can get the best brain by being a matchmaker, getting the best groom for the best bride.

So we connect communities and companies together, let them work together and plan together and improve as things progress.

And ADB can start a special ADB volunteer program of people aged less than 25 who have just graduated, or even people who have retired with some skills, to go and help local communities paired up with NGOs.

There are many things that could be done, but there needs to be a budget component and ADB has to be very flexible with it. We’re not talking big money. Now we as an NGO realize that we also have to have our own businesses, so we’ve established separate legal entities as businesses.

These businesses fund us as well as some activities in the villages, so there’s a lot that can be done.

You need to be more imaginative. I suggest that ADB have an advisory group of NGO people—you don’t have to pay them anything. These NGOs will let you know what we think the needs are and what we think the inadequacies are in every country.

There will always be a need for NGOs because it’s maybe only in Singapore where the government fills every basic need for you. ADB could do a great service to Asia and the Pacific and the poor if it had a very clear policy of helping the governments it works with understand and promote the role of civil society and NGOs in their own countries.

ADB can say, “Look, these are all the cats that we need to catch all the mice in the future.”

Are PDA’s experiences transferable to other countries? What advice do you offer to those looking at creating partnerships of business, NGOs, and government or international agencies?

You’ve got businesses in every country, and every business, despite some differences in the degree of excellence, really would like to do something good for society. So we can catch that—master that—desire to do public good and really get things going.

In any country where people can buy cigarettes, they can buy basic services, and the businesses are there, and the local people need business skills. Again, the only people who can teach them are the businesses. We’re not asking big money from them, but staff time.

Two or three people from the company who may spend two or three weekends to get to know a community and teach skills. If every poor person becomes better off, they’re going to be buying goods and services from these companies, so in the long term it comes back and benefits everybody involved. The more you give, the more you get.

We would like to work with ADB in partnership—not master-servant, not donor-recipient—but as equals

I’d say that this is more than transferable in every country at different degrees. Indonesia can have a different style from the way we operate in Thailand. NGOs can work together with the chamber of commerce.

Imagine you have a unit within the chamber of commerce going to all the companies saying, “Hey, this is the way you can help your country, and the government will give you tax deductions and give you praise, certificates, and a lot of publicity, saying these companies are great corporate citizens.”

How has PDA cooperated with ADB in the past, and what ideas do you have for possible future collaboration?

Well, we’ve known ADB like dogs know airplanes. They see an airplane flying overhead but they don’t get a seat on it. But now is the time to bring the dog and the airplane together, and sit and chat.

President Chino visited PDA and went to the villages and saw what we did to reduce poverty. We would like to work with ADB in partnership—not master-servant, not donor-recipient, but as equals.

We don’t think you’re superior to us, and we don’t think we’re superior to you. You have many more skills; we have more access.

The NGO sector is heading for a rough time because it has been taught to be dependent on the generosity of other people forever. That just doesn’t work. So NGO sustainability is very important and we would like to work with ADB to help NGOs move toward financial sustainability, getting some grants, some loans for them to establish a business as a separate legal entity, and use these profits to feed into their charitable work.

We believe that NGOs are a relevant part of society, and we would like to join in with ADB and apply whatever is relevant that both parties have toward the people who are like dogs looking at airplanes.

Learn more about ADB's partnership with NGOs

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