Author: Ashfaque Zaman

 

Somewhere between the invention of the microwave and the discovery of cheap labor, we lost our patience. We now have a burning need to cure the cold today and have dinner warmed in three minutes. Rather than allowing everything its organic time and process, we seek instant gratification. This greedy habit has eradicated not only liveable wages and sustainable production but also quality and pride in a product born out of rich, ancestral traditions.

The days of textiles threaded with allegory and the rustic beauty of human error are behind us. We are accustomed to wearing plastic now, with 40% of our ready-made garments being made with polyester. Craftsmen, unable to keep up with those economies of scale, lose their art as the future generations do not see it as a stable means of survival.

The arts and crafts of a nation are not just products. They are histories embedded in material objects, telling stories of the peoples who made them. For a country like Bangladesh that thrives off its abundant heritage, true knowledge should be recognized in the expert molding of silver or clay pots. However, post-independence urbanization has left these makers searching for customers that will value this expertise over the shinier, cheaper alternative. Therefore, artisans were no longer present in the frame of the changing canvas of the nation.

It was against this backdrop that BRAC, the world-renowned Bangladeshi non-governmental organization, was looking for ideas on how to engage rural women in income generating activities as part of its development program. In 1976, BRAC founder Sir Fazle Hasan Abed and his wife Ayesha Abed, would engage women in sericulture and making crafts as a means of livelihood. It started a dynamic of women’s employment and connection to the national market that had been severed with the decline of the pre-existing handicrafts industry.

Today, that connection has become Aarong, a one-stop shop for quality-ensured, 100% Bangladeshi crafts.  Its popularity grew such that within a short period of time, it emerged as the country’s most iconic fashion and lifestyle brand. Four decades on and Aarong remains the strongest connection between thousands of rural artisans and a growing urban customer base.

The ethos of Aarong embodies Steve Job’s words, “It’s not the customer’s job to know what they want.” The brand today has single-handedly revived the nation’s interest in and access to its own arts and crafts. It has also allowed the consumer to experience the quality of the products made by local artisans. The result was that an entire nexus of craftsman who finally saw economic benefit in continuing their art was born; all the while protecting age-old traditions. The social enterprise has proven that nakshi kantha stitch need not be confined to the bed and bamboo is as decorative as it is functional. 

A Case For Definition
Following the Liberation War, Sir Fazle founded an institution that would soon integrate into the social fabric of society. The Bangladesh Rural Advancement Committee or now just BRAC was built to grow alongside the people of a newly independent nation. The founding members were aware that success was only possible with an entity that could sustain itself. The NGO’s reach today extends to more than 130 million people in 11 countries, with a focus on financial empowerment, health, education, and human rights. Currently Aarong, one of BRAC’s 13 social enterprises, contributes 50% of its profits towards BRAC’s development programs and retains 50% for future expansion.

This social enterprise would come to ensure women in rural areas are benefited by being able to continue their household chores while earning an income on the side. To secure market linkage, BRAC began marketing and supplying their products to shops in Dhaka. However, they found that payments were made only once the products were sold. A small NGO at that time, BRAC found it difficult to pay the women and the idea of having its own retail outlet, Aarong, was born. The first Aarong shop opened its doors on Satmasjid Road in 1978. This undertaking would not only allow the women in BRAC’s program to get paid in a timely manner, but opened up market linkage opportunities for craft producers across the country.

Sir Fazle defines social enterprise as a business that is built with the ambition to solve social problems. “The issue in the case of Aarong was marketing the products of marginalized artisans in rural areas. They could not sustain themselves and their craft solely through traditional sales channels. We decided that we would become that market in the urban areas.” He emphasizes that social enterprises generate opportunities for disadvantaged people and reinvest all of their profits into a cause. “All the profit from Aarong is invested in social purposes like education or health care, primarily for women. We are not just about creating a livelihood, our focus is on bettering it.” Sir Fazle affirms that the organization is always responsible for its artisans. “Our artisans’ welfare is of paramount importance. The quality of craftsmanship will also be consistent when they are holistically supported.”

“We understood early on that creating employment for rural women was particularly a concern. We assured them that we would pay for their merchandise even if it did not sell. We wanted to stop the dynamic of giving power and credit solely to the shopkeeper.” The enterprise that launched seven years after Bangladesh’s independence has since developed the largest supply chain of artisans in the country. This is necessary for a nation where the urban population has grown by 6% annually since 1971. Sir Fazle conveys that Aarong was built to support a changing Bangladesh. “We created the quintessential social enterprise where the distribution of profits would solve the rural marketing disparity. Aarong also helped rural artisans understand the urban market, its taste, and lifestyle in order for them to produce the right kind of product.”  

Sir Fazle Hasan Abed
Founder & Chairperson, BRAC

He expounds upon the second purpose behind Aarong when discussing nakshi designs, an embroidery technique that has become emblematic of Bangladesh’s national identity. A befitting comparison is that these traditional nakshi kantha throws are just as elaborate as Aarong’s history. “Our other initiative was to promote the arts and culture of Bangladesh. Kantha designs are common and have been a part of the history of rural communities for hundreds of years.” At Aarong’s flagship store in Uttara, Sir Fazle walks towards a boxed shelf on the second floor towards neatly stacked kanthas according to their color. The motifs have changed through regions and time. “We collected designs from across the world; including from museums from Kolkata to Chicago.” 

The kanthas come in black, red, and white. Some are extremely intricate, exhibiting a kaleidoscope of colors, while others are stitched in shades of blues, greens, and brown. Pillows that complement these tapestries are neatly stacked in various shapes and sizes just behind it. “These designs are shown to the embroiderers so they would have more design options to draw on. The variety of design you see today was brought in by us. It did not necessarily exist 50 years ago.” Sir Fazle recollects finding design influences from unobserved places. “We collected over 132 outlines of alpona from various parts of the country. If you also look at the mishti (sweets) and pithas (cakes) of Bengal, you’ll see they have a composition too. Therefore, it became a matter of applying extensive research to incorporate these designs into the crafts and clothing.”

“All the profit from Aarong is invested in social purposes like education or health care, primarily for women. We are not just about creating a livelihood, our focus is on bettering it.”- Sir Fazle Hasan Abed

Aarong has since introduced these patterns into garments, bags, and tapestries. He affirms that the organization has done the same with jamdani sarees. “The jamdani market was very small, with only a few hundred people involved. It was on the verge of non-existence. Now, there are 10,000 people working in the industry. We also brought jamdani designs from museums and collectors to be reproduced.” Aarong’s restoration led to the first exhibition of jamdani at Shilpakala Academy in 1981; a testament of the beginning of a revival of the crafts. “We began production for the jamdani exhibit in 1979. With the support of Syed Zillur Rahman, the director of the gallery at the time, we were able to host the event. Our success inspired subsequent exhibits such as the ones we have done for the nakshi kantha.” Aarong’s focus on design and product development would always be at the core of its long-term success. 

Tamara Hasan Abed
Senior Director, BRAC Enterprises

Missing the Point: the Unparalleled Value of Work by Hand
“My first experiences with Aarong were before the store materialized. I would go with my mother to villages across Bangladesh. She would immerse herself into the world of weavers and mastercraftsmen making jewelry, pottery, etc discussing motifs, designs, and techniques with them,” reminisces Tamara Hasan Abed, Sr. Director of Aarong and daughter of Sir Fazle and Ayesha Abed. Tamara feels that her passion comes from her mother who was present during the inaugural stages of what is a large conglomerate today, employing over 65,000 Bangladeshis throughout the country. 

“When women earn, they have a place in the community, decision-making abilities in the household while enabling them to handle their children’s education. We also want these women to have a sense of identity by investing in themselves and procuring assets.” – Tamara Hasan Abed

Aarong has provided loans, commissioned consistent orders, provided facilities, and trained many of artisans in order for them to expand. “Our artisans should see themselves as entrepreneurs. Sustaining this supply chain is an emerging hurdle. The time to give craft products more attention, value and investment is now.” Aarong’s army of skilled artisans is what makes them stand out. This nationwide community is the reason behind the distinct identity of the brand. Tamara takes pride in this specialty but also mentions the complexity of such an operation. “Maintaining a unified quality with products from numerous sources and scattered locations is a constant challenge. When you are mass producing, everything is in a factory. You have control and supervision of the process.”


Defining the value of handicraft in a world full of cheaper options can be painstaking. For example, Persian rugs can cost up to 2,700% more than those that are manufactured in bulk. “In our case, it is even more difficult because we have to balance efficiency with our social goals. It ultimately comes down to showing that you have a superior product. We will never be able to produce at the rate of machine-made products so our design and quality have to stand out.” She goes on to say that we also have to generate more appreciation for our own crafts. “Whenever we think of high-end sarees, our first thought is to fly across the border. We have Tk. 100,000 jamdanis at Aarong because we want to demonstrate that local pieces can be high-end too.” The exclusive jamadanis are adorned with silver and gold weaving; these are kept in closed glass displays on the first floor of the outlet. They are Bangladesh’s couture, given that a few exclusive pieces are made never to be replicated. Some of them have taken months to make. That was the inspiration behind HERSTORY. A fairly new line from Aarong, HERSTORY exudes uniqueness and exclusivity from clients who want to wear something Bangladeshi.”

Four Decades and the Future
Tamara wants to focus on the youth for Aarong’s 40th Anniversary Festival this October. “Earlier generations grew up in villages or visited them often and are more familiar with handmade products. The current generation is more confined to urban life. They are not exposed to the painstaking work, skill, and artistry behind everything we sell. Aarong’s 40th Year Festival between 25-27th October at Army Stadium will be free and open to all to experience live craft demonstrations and workshops and enjoy food, music, and fashion with their friends and family. Our hope is that through this we can elevate the understanding and appreciation for our own crafts and heritage.”

Tamara asserts that catering to the youth is the next step, “If we want the attention of the younger generation, we realized that we would have to make products for them. Our research showed that Aarong was not focused on the younger male generation at all, so we introduced Taaga Man in August this year to cater to that demographic.” Taaga and Taaga Man, sub-brands of Aarong, opened its first dedicated outlet this year in the center of Dhanmondi. “We want the youth to take pride in wearing something that is completely Bangladeshi, while catering to their global tastes. Our Taaga store has a unique modern ambiance that complements the apparel.”

Aarong has its sights set on moving further afield after decades of dominating the local market. “Our e-commerce already delivers products to any part of Bangladesh and will soon be shipping internationally. We are also at the preliminary stages of launching the Aarong app. The consumer now wants a personalized experience more than anything and we are working to achieve that.”

Tamara also understands that customer targeting involves being active on social media platforms. With 3.1 billion users, these platforms attain 42% penetration, with 71% of consumers more likely to purchase based on social media referrals, and 8 out of 10 users stating that a company’s social media engagement impacts their purchase. “We are looking to be more active on social media platforms such as Snapchat and Instagram. Club Taaga, a new loyalty program, was launched to give younger consumers something to come back for. Brand alliance and loyalty are a priority at Aarong. The exponential growth of digital media has allowed us to expand those offers.” The team at Aarong understands that shopping is an experience. They have devised the right ambiance in every store. “The design of our stores makes shopping convenient and easy. Shopping is a sensory experience. Our retail and visual merchandising teams are responsible for ensuring an enhanced customer experience.”

The Innovative Philanthropists: Scaling with a Purpose
Social enterprises are on the rise in South Asia. Studies have shown that India leads the way with nearly 2 million, while Thailand, Bangladesh, and the Philippines are emerging with 116,000, 150,000 and 60,000 respectively. The challenge for these organizations becomes a matter of how they want to scale while staying true to their purpose.

When expanding their scope, social enterprises have to consider how they can maximize impact. They have to decide as to whether they will invest in their current coverage or broaden their reach. Aarong has over 800 small and medium entrepreneurs supplying to them. “We audit our producers under our social compliance audit to make sure they are looking after our artisans. Investing in our suppliers establishes increased capacity in the long run. Our financial support allows them to maximize their volume.” Given that it is not a mechanized project, her team supervises consistent production through the year. The vertical integration of their production and retail allows them to plan and forecast sale prior to the sales year. “To ensure consistent orders for producers we receive warehouse products for the holiday season throughout the year. This is not financially optimal but it keeps production centers of smaller producers running.”


Putting women at the center; Aarong’s focus is on interventions that make the biggest difference to women. Studies show that women make up 45% of the full-time workforce of social enterprises in Bangladesh. Aarong has surpassed this number where 85% of its artisans are women. Aarong organizes artisans directly through the Ayesha Abed Foundation (AAF). The foundation manages over 35,000 artisans through 14 production centers and 637 subcenters. Tamara affirms that Aarong works with BRAC to improve the livelihood of its artisans. “We want to instill behavioral changes that create impact. Workers at AAF receive education and healthcare benefits from BRAC. We have also introduced annual check-ups, health insurance, and retirement benefits for them.” AAF plans to start more centers in different parts of Bangladesh. Every year 500,000 people migrate to Dhaka looking for jobs. Most of them end up in a cycle of poverty. We want to continue to create opportunities for women in rural areas. Only 33% of women in Bangladesh participate in the labor force, in comparison to 80% of men. Additionally, a 10% increase in women’s participation could raise the GDP by 1%. Tamara continues the expansion of Aarong with BRAC’s values, “When women earn, they have a place in the community, decision-making abilities in the household while enabling them to handle their children’s education. We also want these women to have a sense of identity by investing in themselves and procuring assets.”

A forty year journey has discovered the formula for broader solutions and protecting the history of crafts in a developing Bangladesh. Aarong is a business of inclusivity, providing opportunities for those who do not see it in themselves. The establishment goes beyond supporting and advancing the rural artisan, it’s centered on showing them that their workmanship is irreplaceable.

Photographs of Sir Fazle Hasan Abed and Tamara Abed are by Din M Shibly
Photographs of artisans from Aarong

 

According to research generated by the pro-democracy think tank, Freedom House, two-thirds of the world’s internet users reside in nations with authorities that censor their online activities. Singapore has become one of the 65 states in that list as it passed the Protection from Online Falsehoods and Manipulation Act (POFMA) in May 2019. The Act allows the government to censor any information on social media and private messaging apps such as Whatsapp. Online media platforms must remove or correct information which the authorities deem to be untrue or fake. This bill was drafted as a response to the challenges posed by fake news and disinformation.

Such censorship regulations are being implemented through the continent, governments in Asia have announced fake news legislations or the desire to enact such laws to combat fake news. These developments have occurred on the back of increased internet penetration across Southeast Asia where it is over 63% and the sharing of content over social media through mobile devices.

In order to contribute to ongoing discussions on the impact of disinformation and fake news on human rights and in particular elections, Asia Centre will hold an international conference entitled Fake News and Elections in Asia. The conference will take place on 10-12 July 2019 at the Faculty of Communication Arts, Chulalongkorn University, Bangkok, Thailand.

Asia Centre’s conference coordinator Tessa Alleblas, explained the motivation behind these legal developments, “Governments have argued that such legislation is in particular necessary in the run-up to elections as fake news or disinformation has the power to sway voters during the campaign period as well as fuel communal violence.” Tessa commends governments for these efforts but believes that the authority’s purpose should be examined: “One may question the intentions of governments as fake news legislation often contains vague definitions of what is considered fake or false, and what is true. This gives a lot of room for interpretation and could potentially be abused and used to silence political opponents by labeling the opponent’s criticism as fake news.”

The conference will bring together representatives from academic institutions, national and regional civil society organizations, political parties, international NGOs and intergovernmental organizations to facilitate knowledge sharing and networking opportunities. It aims to take stock of regional developments and trends around legislation to curb fake news, advance knowledge on the role of technology and data on habit forming behavior, and examine the impact on democracy, human rights, freedom of expression and the rule of law.

The topics covered will include among others emerging fake news laws and legislation, the role of artificial intelligence and data science, the impact of fake news on communal violence, and the effectiveness of media literacy programs as well as fact-checking initiatives.

Asia Centre is a not-for-profit organization, established in 2015 in Bangkok, Thailand. It serves as a think-tank, meeting space, project partner, and social enterprise. The Centre seeks to create social impact through its activities on issues affecting the region. To that end, the Centre organizes events such as seminars, roundtables, and conferences as well as undertake research which is published as books, reports, and commentaries.

For the conference, Asia Centre partners with the University of Nottingham, Malaysia, International Republican Institute, NSHM Knowledge Campus-Kolkata, International Center for Not-for-Profit Law, Faculty of Communication Arts, Chulalongkorn University, University of Jember, University of Liberal Arts Bangladesh, Hivos Southeast Asia, Council of Asian Liberals and Democrats.

The conference on Fake News and Elections is part of Asia Centre’s three-year project on Freedom of Expression in Asia, and in 2020 from 8-10 July, the Centre will convene a conference entitled Hate Speech in Asia: Challenges and Solutions.

For any queries about the conference on Fake News and Elections, partnerships or the work of Asia Centre in general, please email research@asiacentre.org.

 

The Resilience Meter

When you look at the standards of life in Bangladesh, $1 can provide two meals to a person every day. This estimate would mean that the nation could provide 2 meals for the 120,000,000 people living under poverty for 107 days with the money we have lost in 40 years of combating climate change.

The ground zero nation has lost $12,000,000,000 in battling disasters since its independence. And this investment will significantly increase as Bangladesh becomes more susceptible to the effects of climate change. A quarter of the population lives on the coastal belt and the time to support such a large demographic is now. In the next 40 years, the rising sea level will lead to 18 million people migrating inland; this will create population density, ultimately increasing poverty and quality of life.

The Degrees of Improvement
Bangladesh can require a multi-level plan in order to combat these effects; solutions that cater to from variant rural areas, and the dense urban areas with poor infrastructure. These responses include:

  • Starting with the ground up, the resilient architecture provides individual communities with initiative and better comprehend their ability to combat it. Elevated infrastructures with drinking water provisions and sanitation create a safe space for the community during cyclone and monsoons that raise the water level.
  • Drinking water can become scarce due to high levels of salinity; these level have increased by more than 25% in the last 30 years. Maintaining filtration systems in individual communities with immediate drinking water when it would not be available.
  • Alternative forms of energy are the most holistic solution for power in the ever-increasing demand of the nation. The average solar radiation intensity ranges from 1500W/m2/day to 2750W/m2/day in Bangladesh especially in Chittagong, and Cox’s Bazar regions throughout the year when in use for 10 hour days. Such large amounts of energy harnessing potentials are especially useful in hard-to-reach areas where the portability of solar panels.
  • Creating eco-friendly methods of farming and cattle rearing. Climate change takes away 1% of agricultural land every year. When space becomes limited sustainable solutions and long-term planning of vegetation becomes the key. Pond dykes, allow farmers to breed fish and grow crops simultaneously. Moreover, climate resilient crops provide sustenance despite weather conditions.

A Nation Creating a Storm
Despite being the punching bag for Mother Nature, Bangladesh will not go down without a fight. The nation formulated the Bangladesh Climate Change Strategy and Action Plan (BCCSAP) in 2009. The finance minister has allocated nearly $100 million per year since this plan to fund actions according to the BCCSAP; a tenth of this is given to civil-society groups for community-based adaptation practices while the rest allocated to ministries and government sectors towards implementing projects under the strategy.

The strategy is based on six fundamentals:

  1. Food security, social protection, and health- these are the basic necessities that must be addressed immediately. This point particularly focuses on the most vulnerable which are the poorest, women and children.
  2. Comprehensive disaster management- it focuses on strengthening the government’s current disaster management systems while addressing the increasing number of natural disasters occurring annually.
  3. Infrastructure- these are ensuring that provisions such as river embankments are well-maintained and fit to combat the changing effects of climate change.
  4. Research and knowledge management- using scientific methods to predict the scale and timing of natural disasters as well as the economic impact on the nation and people. Furthermore, it evaluates future finance strategies and is networking with global entities to facilitate best practices.
  5. Mitigation and low carbon development- to adapt to lower carbon emission methods in a growing nation, addressing the growing need for energy.
  6. Capacity building and institutional strengthening- strategies to meet the challenges of climate change and mainstream it into the development actions of both the public and the private sector.

With more than 80% of the country exposed to floods, droughts, and earthquakes, the time for Bangladesh to fight against the wave of climate change is a precursor for an advancing nation.

Source: Water Aid, World Bank, Bangladesh Climate Change Strategy and Action Plan

 

Quilts and blankets have not always been a store-bought purchase. For generations in cultures around the world, matriarchs have retained the warmth of the family by piecing together discarded clothes and old sheets to create a collage of memories. In Bengal, the source of the cloth patches has always been sarees and lungis, layered and stitched together to form the perfect companion for the mild winters and wet monsoons of the subcontinent.

Over time these quilts have taken on their own distinct dimensions due to each region having its preferred style and motifs. The nakshi kantha is a mural of the imagination of the artisan. Each generation would introduce their unique stitch, adding depth to the intricate patterns we see today. Aesthetics is an important means of expressing the culture, history, and social dynamics of Bengal. Women would stitch motifs of farmers at work, seasonal festivities, the leaders of ancient empires or an array of local flora and fauna. These tapestries were the original illustration of history and folklore.

Aarong’s pinpoint precision has taken this craft beyond bedding while maintaining the intimacy of the originals. Their kanthas are all produced by women in rural Bangladesh who have preserved the handmade touch. Nakshi needlework has recently made its way to bags, pillows, decorative wall installations, and even the saree. One such kantha project started with 20 women in Jamalpur over 40 years ago. Today, they have turned an almost dying skill into a profitable enterprise. Last year, Aarong sold over 95,000 of these woven masterpieces, amounting to Tk. 1.2 billion in revenue.

Photography By Din M Shibly

Over a century ago, the Industrial Revolution introduced a world of mass production. And the Technological Revolution connected everyone at a touch less than a decade ago. However, before the assembly line and smartphones brought people together, it was the soil that gave communities their first grounding.

The earliest farming villages were found in the rocky slope of Ain Ghazal, Jordan, over 10,000 years ago. Hubs such as Ain Ghazal were centered on lentils, wheat, barley, and vegetation. It was part of what was known as the Fertile Crescent; a region in the near East of modern-day Syria, Iraq, Lebanon, Jordan, and Israel. While this reformation propelled mankind to quit the nomadic life, the art of cultivation and cattle rearing are continually diminishing today.

The fields of labor have changed with an immense decline in agricultural services; the EU is expected to undergo a 28% decline in the workforce by 2030. Furthermore, the subsequent cost production is expected to go up 2.5% annually. Arla, a multi-billion dollar international cooperative, understands that they are building an industry that is more capital and service driven. The Scandinavian dairy giant’s connection to the international market started at the grassroots with farmers. Their farmers are not just producers, they are all a part of the company’s decision-making body and directors of the conglomerate.

Mark Boot
Vice President/Head of South East Asia
Arla Foods

Cooperative Democracies and Carbon Footprints
The farmers at Arla play the part of producer and proprietor; all products sold by Arla in Bangladesh come from Arla farmers who own a part of the company. Mark Boot emphasizes that he is a part of the cooperative, “Our 11,200 farmers span across seven countries. They are the foundation and the future of the company and share our commitment towards environmental practices. We are committed to sustainable farming practices, making sure that we reduce the impact we have on the environment.” Their sustainable practices started in 2014. The following year they had reduced their carbon footprint in comparison to 1990. “Reducing carbon emission is now also a part of our Food Growth Strategy 2020. We aim to reduce these emissions by at 30%. Moreover, Arla is about mutual learning. We have held over 500 workshops that teach methods to implement sustainable practices to reduce emissions. Simultaneously, we learn the best practices in dairy farming from our farmers and spread that across our conglomerate.” They strive towards a greener tomorrow and it is evident in their numbers; Arla has conducted 4,300 carbon assessments and 295 workshops on the efficient use of feed and energy in the UK, Sweden, and Denmark. “We have completed over 5,000 carbon assessments on the grounds to have the most in-depth understanding of reducing these emissions. The cooperative merger is the foundation of our success and best practices. Our farmers are from a similar background, cultures, and socioeconomic statuses. They are able to communicate and relate with each other.”

Peter Hallberg
Managing Director
Arla Foods Bangladesh

From Copenhagen to Kawasaki
Part of the company’s Good Growth 2020 strategy includes the larger ventures in South Asia. They have a presence in nine countries across the continents that include China, Japan, Singapore, and Malaysia. Peter Hallberg points out that Bangladesh is the ideal climate for investment, “Arla has been voted the best milk brand in Bangladesh for the last three years; this motivates us to ensure that consumer demands in the country are met.” Arla Foods is now strengthening their ties to the region with an increased presence in Indonesia. “Our joint venture with PT Indofood CBP Sukses Makmur Tbk (ICBP) is a major step towards integrating Arla into the market further. ICBP is one of the largest dairy players in the region and has over 40 products. They have 50 factories in key points of the country which allows for freshness and quality maintenance.” Like Arla Foods, ICBP also has a strong global presence, reaching over 60 countries across the globe.

These partnerships are a critical component of the Good Growth 2020 according to Mark, “Entering win-win partnerships is a crucial part of how we work to reach our goals. We have worked well with Starbucks, for example, and this will be a long-term partnership. The benefits are visible across Europe, the Middle East, and Northern Africa. We aim to sell 110 million beverages through this partnership this year.” The organization creates partnerships on a local context such as the one with McDonald’s in the UK. These are based on the initiatives that make the most business and Arla has a supply chain that can provide support. “Formulating the strategy was centered around key themes to drive and grow our business. We have identified eight categories that include milk and powder, mozzarella, cheese and of course milk-based beverages. We also decided to work on a more unified Arla; one that speaks the same language conducts itself in the same system, and regulates under the same set of values.” Southeast Asia is a natural area for growth as the third largest dairy region in the world. “We strive to build strong brand value with companies such as Dano in Bangladesh. This is evident in our global partnerships with Premium Castello and Lurpak.”

The Ca+ Stance: Enriching the Organization
It’s all about putting every joint to the best of use at Arla. They have introduced what is known as the calcium transformation program. Mark observes that the company is working on embodying the nutrient they deliver best: “Calcium is a source of power. We want to work like the nutrient we provide best. Arla wants to work on eliminating complexities from its company; this includes fewer decision layers and more empowerment, and simplicity.” Calcium is a three-year transformation program that was announced in early 2018. The company’s management plans to reduce cost by €400 million, to give even more money back to its farmers and to begin investing in new opportunities for good growth. “This year alone we expect to reduce cost by at least €50 million. I am going to use strawberries to elaborate; we have 28 providers to meet the demands for yogurt production. The small amount of products we receive from each one creates a complexity that can be solved if we streamline the suppliers.” Arla intends to direct €300 million towards farmer-owners via prepaid milk prices and reinvest the rest in strategic growth. This year is also momentous because their operations are expected to reach €10.5 billion in revenue.Moreover, they expect the branded sales to grow by 3% by the end of the year. “When you work so closely with the farmers, you appreciate their very nimble and humble mindset. Every euro they are investing counts heavily. We want them to always have a profitable enterprise in their partnership with us.” 

“We focus on giving them the best possible milk price. The most frustrating matter for a farmer is ramping up their production and not being able to sell it.” They utilize a follow-up mechanism that enables farmers to identify profit margins and the rate at which they can expand. “Identifying the capacity of each farmer factoring in their land, barn size, number of cattle, feed and hygiene is the first step of our evaluation. We then look at how they can maximize productivity. Simultaneously, we teach methods for a more quality product; one that has more fat and protein and a lower bacteria count. Our farmers follow an animal welfare program that allows them to understand this better through training.”

Farm-iliarity: Understanding the Field through Research
One trait is unanimous at Arla – innovation. They apply the best and most up-to-date practices on the field and in the field (of research anyway). Mark explains that research is a prerequisite for the next step, “Milk is such a diverse product. We grant university studies, and research corporations, and partnerships to see what can be done to improve the quality and obtain new products. One such innovative product is Protino. The protein supplement comes in the form of drinks and desserts, providing nutrient without sacrificing taste. “When we launched Protino, we worked very closely with universities and hospitals demonstrating that it was an easy way of providing nutrients. Every situation is different; so sometimes you fund research to understand the situation or nutritional needs and based on that device a product. It’s not always ‘we need a product’, but it has to lead to something which creates value for the farmers because ultimately it leads back to the milk.”

Arla recently opened a brand new, state-of-the-art Innovation Centre in the heart of the Danish Food Cluster. From here, the company works closely with open innovation together with scientists, retail customers, farmers, and consumers to identify and develop the dairy products of the future for consumers around the world. “The beauty of research is that it also brings forth solutions to pressing matters,” highlights Peter. A recent study has shown that milk prevents the level of stunting. “A recent study has shown that 43% of children under five are stunted according to the World Bank. This is more prevalent in rural areas where one out of two face stunting. The research has concluded that milk intake is one of the primary preventative methods.” The International Food Policy Research Institute concludes that milk intake can reduce stunting by as much as 10.4 points within the first 1,000 days. Peter believes that Arla can play an important presence towards a solution: “Arla has been in Bangladesh for 57 years. We have an obligation to support the local milk and farming industry. It is no longer about exploring the opportunities our company has in Bangladesh. Scaling our reach and long-term relationships in Bangladesh begin with contributing.”

WASTE IS TURNED INTO AN ASSET

Arla farmer Hans Clausen successfully recycles what was once considered waste

Since 2013 Hans has participated in the Arla sustainable dairy farming programme. In 2013 and again in 2015 he carried out a carbon assessment, offered free of charge by Arla.
The first one, back in 2013, was prompted by pure curiosity from Hans:
“It was free so I thought I might as well take part. It can only be an advantage if I can get to compare my farm with others for nothing, the assessment provided me with that opportunity.”
In the on-farm assessment, trained consultant goes through the farm systematically to identify key areas for the farmer to improve sustainability and cut costs at the same time. “This really made a difference to my business.”

Hans Clausen
Broager, Denmark

Energy-savings through LED lighting
The 2013 climate assessment showed that Hans was using more than average amounts of energy. This prompted him to reduce his electricity consumption by installing LED lighting throughout his farm.

2015 follow up assessment clearly demonstrated that this had been an effective measure on Hans’ farm.

The milk provides farm house heating
Another energy-saving change Hans has made is to recycle the warm air generated when the fresh milk from the cow is cooled down from 37 °C to 4 °C. Hans’s herd produce about 1 million liters of milk per year, all of which is stored in the farm’s milk tank before it is picked up by the Arla milk tanker.

By installing a pump in the milk tank, Hans now recycles the heat from the milk, which is then utilized in the underfloor heating in the farmhouse. Again a clear win-win.

Efficient feed production
The carbon assessment also found that Hans produces a large proportion of high-quality homegrown feed which again, contributes to the efficient use of the resources on the farm. Hans is now looking forward to doing his third assessment through the Arla-programme:

“The more improvements you are able to identify and implement through an Arla carbon assessment, the healthier your finances get. Sustainability and financial benefits are well interlinked.”

SUSTAINABILITY COMES NATURALLY

Arla farmers Maurice and Zoe Davey continuously decrease their farm’s carbon footprint through good farm management

Zoe and Maurice Davey
East Kimber Farm
Devon, United Kingdom

Zoe and Maurice got involved with carbon footprinting almost by accident. Zoe explains, “I was at a meeting where Arla offered the voluntary carbon assessment to us owner-farmers. We have always been interested in alternative renewable technologies and been aware of the energy we use on the farm. It just was a point of interest.” Zoe and Maurice participated in Arla’s carbon assessment in 2014, 2015 and 2016. The last one showed improvements on the previous tests. Arla encourages its owner farmers not only to do carbon assessments but also to repeat the assessments over time, to understand where the footprint has improved and to identify opportunities to further raise the bar. Reducing the carbon footprint from dairy farming is an essential part of Arla’s Sustainable Dairy Farming Strategy, and the dairy company has conducted many thousands of assessments amongst its owner-farmers.

Increased milk production improves sustainability
Almost half of a carbon footprint is from the animal’s digestion of feed, which means it is extremely important to make sure the individual cow is producing the highest amount of milk from the food she eats.

Animal welfare and the health of the cows are key to how much milk the individual cow produces and it ensures a more efficient utilization of the feed.

Maurice and Zoe’s herd of 116 milking cows are high yielding and, even their least productive animals peak at 40 liters per day.

Continuously improving health pays off
On their farm, Zoe and Maurice made a concerted effort to reduce animal lameness and minimize cases of mastitis, which has proved to be a great success. Zoe says, “We are now at a stage where only five mastitis cases required antibiotic treatment last year”.

Zoe and Maurice have no doubt that the care they give their animals results in higher milk yields. Another clear proof of this is their work in reducing calf mortality, which has reduced dramatically over the past 12 months.

The cows come first
Good farming has always meant better all-around efficiency. Maurice and Zoe have never been faced with having to make a choice between economics and sustainability.
“We’ve tried to be good farmers and the two things happen to have gone together.”

BIODIVERSITY IS A NATURAL PART OF THE LARGESCALE FARM

Organic Arla farmer Dr. Frank Paass of APZ-Agrar-Produkt in Ziegendorf, Germany has a passion for biodiversity.

Dr. Frank Paass
APZ-Agrar-Produkt
Ziegendorf, Germany

Positioned in the north of Germany Dr. Frank Paass’s farm, APZ-Agrar-Produkt is home to 320 dairy cows.
The dry, sandy soil on which the farm is located is actually not very productive but the size of the holding – 1100 hectares – and Frank’s expertise in crop composition enables him to feed his animals without importing anything other than protein and mineral supplements.

Biodiversity is improved through careful farming
In his daily work, Frank is very conscious about biodiversity and supports the nature of the dry, sandy soil by keeping a smaller herd of cows. This gives a less dense growth of grain in his fields, which, as Frank says, “gives light and space for the growth of other plants than grass and crops.”

The length of the grass matters
Frank is passionate about organic farming and biodiversity and at the same time runs an efficient and productive dairy farm. Biodiversity and efficiency are not opponents but sometimes brings about conflicting goals. An example of this kind of dilemma is grass length. Biodiversity levels are higher when the grass is either untrimmed or trimmed at a late stage to allow other plants to become established, Frank explains. However, as grass has the highest level of protein and energy when it is kept short, a late cut means more biodiversity but less energy in the cows’ fodder.
“It is a tough choice but I cannot risk my business just because it would be nice to look at some beautiful plants.”

Making room for nature
Instead Frank has set aside dedicated areas that are not cultivated or cultivated less intensively. At Frank’s farm, it is a 10-hectare patch of land that is only farmed minimally. This land is now home to a variety of rare grasses, herbage, and even some endangered species. Maintaining biodiversity around the farms is a priority to Arla’s farmer-owners as well as to the dairy cooperative. For more farmers to practice biodiversity, Frank feels it is essential to make people understand the accompanying effort and economic consequences for the farmer.
“I’m happy to do this. I want to contribute my part and to the benefit of biodiversity,” says Frank.

Farmer’s Story and Case Study from Arla Foods

It started with 80,000 Rohingya refugees arriving in Cox’s Bazar in 2016; they were escaping a violence that was yet to reach its peak. At a time where nations across the world were focused on defining borders, deporting the oppressed and building walls, Bangladesh welcomed a population that only knew repression and persecution as a way of life. At present, there are 900,000 Rohingyas located in the Kutupalong-Balukhali Expansion Camp; it is now the largest camp of refugees in the world. The hills have become thousands of makeshift homes made of plastic sheets, tin, and bamboo.

The people speak of violence, murder, and abuse as if it were the norm. It goes beyond tyranny. They have been denied their basic rights to access health and education. The children are not vaccinated with cholera shots; a disease that is no longer a worldly concern. They paint recollections of murders of their family member, arriving with those they had barely escaped with. Some of whom they had lost in the process. We have created child-friendly spaces and health care centers for a sense of normalcy. But normal is not the goal. Ultimately, we want to change their narrative. We want them to be citizens of a nation they can call their own. Mark Pierce, the Country Director of Save the Children Bangladesh, expounds on their activities to support the Rohingya population. 

SCALING TO ADDRESS AN EXODUS
Understanding the needs of the Rohingyas start in 2012 for Save the Children. They provided education and child protection in two of the registered camps in Cox’s Bazar. Mark Pierce recalls increasing their operations in October 2016. “Years of interventions in the area made Save the Children aware of the existing conditions and needs of the area. A few months before August 2017, we were aware of the violence that was occurring in Myanmar. Our concern of an influx was apparent when the 1,000 arrived on the 25th of that month.” Although they knew the crisis would expand, they were not prepared for the sheer size. The number of refugees had increased from 100-folds to 700,000 in a matter of six to seven months. Rohingya refugees were fleeing Myanmar by walking for weeks or taking unsafe boats to arrive at the coast of Bangladesh. “We witnessed 12,000 to 15,000 Rohingya refugees crossing over every day. It came to our attention that 80% were women and children. So we used the presence we had to provide basic food supplement and shelter for unaccompanied children.” Save the Children eventually started a family tracing and reunification process but a significant percentage of them have lost one or both of their parents.

Pierce emphasizes preparation for a crisis must be conducted months in advance. “I arrived in 2016 and we came to the conclusion that we were not prepared for major emergencies or disasters. This realization came because Bangladesh was vulnerable to natural disasters as witnessed during Bhola and Sidr.” Save the Children was only prepared for small-scale emergencies at the time and Pierce wanted that to change. He initiated training for major emergencies and prepositioned supplies throughout the country: “We started to identify vendors that we would use in advance. They would supply us with everything from tarpaulin to dairy cans. This way we were ready to tap into our global resources and provide victims with immediate assistance. We dispensed essential food and non-food items. People also need cooking utensils, plastic, and tarpaulin for shelter and mats to sleep on. The organization’s largest program is the Life-Saving Program. It reaches about two-thirds of the Rohingya refugees, providing them with basic staples. “Our biggest concern is keeping these people alive in such dismal conditions. Basic provisions such as sleeping mats, tarpaulin, and cooking utensils make a significant difference. Every individual’s first concern is food, water and a place to sleep.”

MARK PIERCE, Country Director, Save the Children, Bangladesh

AIMING TO SAVE
The severe cases of malnutrition, lack of vaccination, and trauma made health and nutrition the principal concern within the Rohingya refugee camps. “We have ten health facilities that provide health care to 6,000 patients every week. The World Food Programme is our partner in providing therapeutic feeding and sustenance to malnourished children in both the camp and the host community.” Their attention for children goes beyond providing the staples. Additionally, Save the Children has just opened a 20-bed Primary Health Care Center. It has a maternity unit, a pharmacy, separate buildings for triage, inpatient and outpatients. They have also installed a water tower and generator in the facility. “The center is the only one that administers 24/7 in-patient care. We will serve 20,000 people from both the Rohingya and host community. There is also an ambulance to bring patients who have been referred from facilities without the capacity to keep them overnight.” Save the Children trains Rohingya community volunteers to promote hygiene practices and raise awareness of health services. “When you teach the people of the community, they become the first point of assistance for patients. They are aware of where refugees can seek help. Community volunteers are also trained and empowered to identify and refer vulnerable children and families who need medical care.”

Save the Children has one of the largest numbers of child-friendly spaces. “We have around 90 spaces that are child-friendly and this includes girl friendly spaces. These children need a space where they feel a sense of normalcy and play. Furthermore, we are also able to address the psychosocial aspects of their conditions. We also have separate centers for adolescent girls because their safety becomes a paramount concern as they get older.” They have counselors for those children that have problems adjusting. Art therapy is one the most successful ways to help these children. “When you give a child a paper and crayon, you allow their imagination to foster. They can express their emotions and over time it helps them deal with such traumas. The child begins to feel more comfortable in their surroundings.”

Save the Children places an emphasis on learning. Their temporary learning centers teach English, Rohingya and Burmese tailored specifically for the population. “Our future plan includes scaling to another 75 learning centers to the nearly 100 we have now. It is one of our key concerns because the literacy and numeracy skills are very low within the population.” The International NGO also protects and manages 3,000 children who either have no parents or a single parent. “Children are the most marginalized within any population. That is why our efforts are conducted with them as the top priority.”

Solutions are based in such a densely populated area must be qualitative. Save the Children has placed 800 latrines and Pierce would like the next step to be a more strategic one: “We are building the latrines near our education and health centers. This way the WASH facilities are not exhausted in their traditional settings.” They also work as a support program for dozens of WASH committees. These entities work to promote good hygiene practices. “Our health promotion activities are managed through community mobilizers. They go from house to house to share WASH messaging. We also complete slope protection work around latrines to protect them from landslides during the monsoon.”

19 years-old, gets a cup of water for her baby Laila* (22 months) at Leda Camp, Cox’s Bazar, Bangladesh.
Asset rights

TIMELINES AND THE COURSE OF ACTION
Large-scale emergencies such as the Rohingya Crisis have their share of peaks and valleys. Every emergency needs to be accessed differently because it has a unique context according to Pierce. “I wish we had conducted simulation testing prior to the emergency. We had planned one for November 2017 but that was too late. In such large scale situations, you will have to take your successes and assess them for later interventions; this includes learning to manage the best and worst of the situation in the best course of action possible.” Save the Children conducts real-time evaluations every three to four months of a crisis situation. Pierce understands that this is the most critical course of action; “These evaluations allow your team to understand what works and what does not. Furthermore, you can disseminate the information to other organizations and create a larger scale of awareness and knowledge.”

The most chaotic period of any catastrophe is the first 90 days. During this time, concerned organizations centered on saving the largest number of lives. Pierce’s experience of the Rohingya situation was challenging because this time frame was much longer. “We witnessed one of the longest tumultuous periods; it lasted from August to January. During this time Save the Children’s target was only on the most marginalized people and not everyone was receiving assistance.” Matters within the camp started to stabilize by the seventh month; a time during which Save the Children geared some of their aid towards those in the periphery of the camps. The monsoon season in May would usher in a number of new matters that would need to be solved. “The monsoons were soon recognized as an emergency within an emergency. We expected the potential of a cyclone, landslides, and flooding forced us to identify a new set of impacts. Furthermore, their reliefs were health risks and water-borne diseases associated with the monsoon.” While a stabilized and systematic response along with proper infrastructure provides continued relief, the dangers of this season are still a primary concern. “If you recall, Cyclone Bhola happened in November 1970. Therefore we must be alert and prepared for the worst weather conditions until December or January. It is our current plan while we anticipate what is to happen next.”

During the monsoon season, the organization is working to create shelters that would protect them from high winds, flooding, and monsoon. Pierce explains that Save the Children turns their attention to construction during these times. The first step entailed assessing what provisions were necessary for the area. “We build covers to facilitate drainage and bridges to make it easier for them to travel across the camp. We also reinforce the hillsides with sandbags to prevent water levels from rising. A larger part of our safety procedures on providing knowledge and raising awareness is on handling extreme weather.” Their provision includes strengthening shelters, healthcare centers, and temporary learning centers. However, some facilities were required to be temporarily suspended while others were decommissioned for welfare purposes. “We hope to bring these places back into their everyday functionality but the limitation of space poses a major challenge.”

Save the Children is now devising long-term solutions and going forward with the local government.”We want to provide assistance as we have from the beginning while allowing the government to take more control. We exist to reinforce the capacity of the government. Save the Children is about extending the systems in place. For example, we expand medical facilities with funding from the USA known as health system strengthening.” Pierce commends the actions of the host community while recognizing that they also require support. He was to work with the local institution to improve the existing health and education services in the area. “You have to focus on the areas where the government is not able to reach. Development organizations should work on informal education for the Rohingya population which does not fall under the official education system of Bangladesh.”

KNOWING WHERE YOU’RE MOST EFFECTIVE
There are 20 subcamps in the Kutupalong-Balukhali Expansion Camp. Pierce explains that a coordinated effort is more important than expansive coverage. “There is a lot of coordination in the various sectors including health, protection, and education. We have to work carefully with the government to ensure that the hundreds of actors and 30 NGOs coordinated in providing maximum effort across the camp.” This poses a great challenge because numerous organizations may exhaust their attention into the same efforts. During risky weather season, Save the Children would turn their learning centers and child-friendly spaces into temporary shelters. “We have to attend to the priority at the moment. Six months ago, our efforts were geared towards health and disease outbreaks; the entire international community was concerned with the diphtheria outbreaks; it was a disease that you would barely see around the world.” Save the Children and other agencies handled around 40,000 suspected cases and a number of fatalities. The vaccination phase was executed successfully. Nonetheless, the high levels of fecal matter that increase the risk of acute diarrhea require careful monitoring.

Many of the activities require the encouragement of those in charge of camps. In such instances, a more integrated approach is devised in order to address the matters of that particular camp. “There are various institutions on a local and civil level that provide the necessary assistance to the communities. We work with influential members who are often known as the mahjis. They are elders or recognized leaders within the Rohingya community. Though it is a new methodology, it has proven to be an efficient one. We run awareness sessions with these leaders, parents, and children to help protect children from issues like trafficking, child, and child marriage.” Community-based approaches are challenging when people have to wait in lines for food, resources and health facilities. Save the Children is trying to establish local governance and democratic principles within these communities.

Pierce indicates that it is easier to create structure at a household level, “These matters include a smaller number of individuals. Our concentration is on the neediest households and their children. We distribute plastic sheeting, mats, education, and protection.” Pierce concludes that infrastructural improvements trickle down for the most substantial effect. “When you build roads and bridges, people can transport clean water easily, eliminating the chances of diseases. Additionally, there are many organizations that work on electricity generation and lighting, and signboard creation. There is also a wristband intervention for children that help children be reunited with their families if they get separated during a storm or flood.”

Children walk through a camp for Rohingya refugees in Cox’s Bazar, Bangladesh, as monsoon rains pour down.

THE INITIAL ACTORS
Pierce accredits the local community as the initial players. The host community consists of 336,000 people who have taken in a population that is nearly three times their size. “The citizens of Bangladesh have offered their limited resources to the incoming Rohingya refugee population. This is a tremendous effort by a marginalized community.” Approximately 38% of them lack food security. These actions were followed by the generosity of the Government of Bangladesh who has allocated 580 acres in the region to house the Rohingyas. “I applaud Prime Minister Sheikh Hasina and her efforts. She instantly acted and offered to house nearly a million people. I met Rohingya children and pregnant women who had walked for nearly a month. Others were on boats drifting in unknown waters.”

The Bangladesh Foreign Ministry has proposed to move approximately 100,000 of the Rohingyas to the Bhasan Char region. Pierce observes that there are a number of matters to take into consideration: “We respect any of the government’s decisions as they have been continually effective. They must consider a number of factors. The safety of the region is the first concern, particularly for children. The population that is being moved must be informed about their new location which includes providing knowledge regarding the region.” Relocation of such a large population would also include their consent; a decision that the Rohingyas will make if they are ensured safety. “The new location should have better conditions and freedom of movement. When you provide mobility, a population is able to conduct income-generating activities. Additionally, they have access to employment, education and health facilities. And these conditions would apply prior to their repatriation to Myanmar. International organizations and the Government of Bangladesh have demonstrated their collective ability to provide refuge for nearly a million people. We will ensure that they are able to live with the same dignity.” 

Photography: SAVE THE CHILDREN

BUSINESS THAT KNOWS NO GENDER: BRINGING MORE WOMEN AT THE HELM

Dolly is a family and business of one. The sisters at Christian Organization for Relief and Rehabilitation (CORR) have taught her jute-work through sign language because she is mute. One in five of the poorest people in developing countries has disabilities. She makes jute products which she then sells to the supplier for income. Dolly has been working and living in Jagorani Chakra Foundation for many years.

Her specialty is jute-topped table dusters which are exported to Japan. Recently, the foundation is not being able to meet the target cost of Tk. 40. The final cost of each product is now Tk. 90. Dolly is not informed about cost issues. She doesn’t know how much longer she can sustain the product line if costs continue to increase. Moreover, suppliers complain about the delay in obtaining raw materials, the duty tax and dismal transport conditions. Circumstances leave Dolly in the market scenario where most of the odds are against her.

Masrur Reaz and his team at the WBG are working to establish a world that recognizes the unrecognized potentials in women-owned businesses such as Dolly’s throughout the world. “I work in the unit which is known as Finance, Competitiveness and Innovation Global Practice. The main goal of this unit is to support countries around the world (both governments, and the private sector) to attain greater economic prosperity and faster poverty reduction. We can ensure this by building a stronger financial sector which enables greater access to finance, and the competitiveness of their economic sectors such as manufacturing, services, and trade.” 

Photography: Nusrat Nahid Babi

Equality Takes a Master Plan and Strategy
The Women Entrepreneurs Finance Initiative (We-Fi) has made access to finance and empowering women in work as well as the business a top priority. Masrur highlights that a stronger economy needs to put women in active roles: “It has already been proven that any emerging country will struggle to reach its full potential if they do not empower women. They must be an integral part of the overall economy through jobs and businesses.” We-Fi will facilitate women-owned businesses by making it easier to obtain access to finance while supporting the growth of their business through greater market linkage. The project also focuses on employment opportunities for female participation in the workforce. Bangladesh is one of nine countries under the project.” The program involves a three-pronged strategy and WBG will consider gradually extending it to other countries. “The first stage involved mapping of women businesses and the ecosystem for female entrepreneurs. We will look into the number and types of women-led businesses in Bangladesh. This field work will allow us to create a database of these businesses in Bangladesh.”

After they have mapped the opportunities, WBG will conduct several assessments; they are focusing on creating a linkage between foreign and large businesses with women-owned businesses/SMEs, or women entrepreneurs. “The key concerns are linking women to a bigger value chain. We need to pinpoint stakeholders, potential buyers, and suppliers by analyzing the ecosystem; it must be coupled with understanding the linkage to government institutions that are relevant to their growth.” Mapping will help the organizations find the key problems, issues, and opportunities as well as constraints. Masrur proposes that this will be followed by a solution-oriented approach. “Our second phase will be to create an enabling environment involving policy, and regulatory framework. It leads to the scope for more activities and provides a legal base for new/future transactions.” One of the major barriers in Bangladesh is the lack of access to finance; only 15 % of women complete transactions with financial institutes. “When you think about finance, generally it involves the procurement of loans. Financial services need to create more and diversified products that are for women. The limited number of products have propelled us to look into newer financial instruments the WBG are working with regulators such as Bangladesh Bank, the Securities Exchange Commission, and Insurance regulator in this regard.”

 

Traditional banking schemes do not sufficiently allow many women from procuring loans. Masrur explains that the third phase will investigate this dynamic, which will also require work to adjust the enabling environment: “We have found that lending to women based businesses can be regulated through what is known as alternative data. Loans are given on the basis of credit history. Most of these businesses do not have any credit history because they have not taken loans or used financial products. We need to create both banking and non-banking financial products.” It results in a chicken and egg effect. Women are unable to approach the financial institutions because they do not have a prior history with the bank. “Alternative data comes in many forms to alleviate this counterproductive cycle. For instance, women can prove their financial stability based on telephone and utility payment track record; a person’s ability should be an indicator of this.” A proposed solution for this is substitute forms of collateral. “The usual way of looking for collateral is some form of cash or immovable asset solvency. However, if a woman owns movable assets two or three cattle, each can be valued at Tk. 50,000 and that is a form of collateral. Similarly, if her family member owns a motorcycle, they can put that against the loan.”

Once these opportunities become available to women, they must have the proficiency to manage their finances. Masrur describes this as the most direct phase of the operation. “Capacity instantly becomes a growing concern as business transactions expand. These women need to understand, manage, and run their organizations, acquire certain skills such as negotiation and interactions with buyers, suppliers, and customers.” Like any entrepreneur, they will comprehend certain matters through the experience. Furthermore, certain leadership skills are also required in entrepreneurial ventures. During the final period, Masrur’s team will construct networks for women-owned businesses. “Enabling and bringing women entrepreneurs close to wide-reaching networks will expose them to market access and market entry facilitation points. We are working on a holistic solution that will help them from generation to the everyday operation of their businesses.”

Deciding on Desh: Why Bangladesh is a Prime Candidate
WGB considered a number of criteria that included: the strength of the proposal, the clarity of the work methodology, the target group, opportunities, and challenges. Masrur illustrates that a number of questions needed to be addressed in the context of the country, “We had to evaluate a number of questions:
– Does the country demonstrate a greater need to mainstream women into the economy?
– Have these previous periods of mainstreaming proven to be successful?
And the answer was yes for Bangladesh in both cases.” The nation is 50% women and only a third of them participate in any form of economic activity; that means that nearly 56 million women are not engaged in economic activity. “When such a large population is not engaged in any form of income-generating activity, we found a clear case for Bangladesh as the right context. Moreover, the nation has demonstrated a determination to help promote women’s financial equality as the pioneers of large-scale and successful microfinance programs.”

Vietnam is a developing country that is just 2,100 kilometers away from Bangladesh. Their National Strategy on Gender Equality 2011-2020 is committed to bridging the gender gap. The Investing in Women Initiative will promote increased employment in the formal sector and expansion of women-led SMEs. It has made strides in equal employment. The labor force participation rate for women in Vietnam is 72.8% compared with 81.9% for men. In addition, 30% of SMEs are owned by women and 25% of business leaders and CEOs are women. “Our research has estimated that as many as 70% of women-owned SMEs in the formal sector in developing countries are unserved or underserved by financial institutes; this is a financing gap and market opportunity loss of approximately $285 billion. If we can prove this dynamic across many nations, it will make substantial progress for women in the economy.” Banks need to recognize the female demographic and the potential for investments, transactions, and growth. “Financial institutes must start by building a form of trust with the women entrepreneurs and we want to establish that from a more nationalized system.” WGB is starting a project to provide financial schemes where any bank can go to Bangladesh Bank with what they deem as an unqualified loan candidate. Bangladesh Bank will then ensure that they will reimburse the bank if the loan is not paid. They hope that this will build a stronger repertoire between banks and women seeking loans for their entrepreneurial ventures.

Building a Nation Starts with Small-Scale Interventions
Bangladesh has a long way to go in terms of an egalitarian society; less than 10% of business entrepreneurs are women and 9 of 10 are employed in the informal sector. “We need to start by simplifying regulatory framework; this includes law policies and regulations which dominate business operations and entries. When women need to go to government offices that are not even in their districts, it makes it that much more difficult for them to complete official formalities.” Women also require the right skills for access to a changing market. A large part of which is now technology based. “Most women do not understand that they can promote, market and even complete financial transactions digitally. It gives them the liberty to complete business and financial transactions through immediate accessibility.”

According to Masrur, this must be coupled with changing the perception at a household level. “Many families do not see women as financial providers in the family. Their roles are defined more by household chores, child rearing, and support work. This is evident in our largest sector, agriculture. The vast majority of women work in fields and raise cattle or cultivate farmland but their participation in market activities is negligible.” Additionally, safety becomes a determining factor for women’s’ employment. “We need better transport facilities for women. They are constrained because any opportunity that is outside their peripheral or has late hours becomes a matter of risk. In this context mobile money and exploration of efficient digital transaction channels are imperative.”

Nevertheless, this is a global dilemma as Masrur illustrates, “80 of the top Fortune 500 companies collectively purchase $1 trillion in goods and service only 1% of which is from women-owned businesses. A majority of these businesses are in higher income countries. We conducted a study that showed the primary barrier is the lack of awareness among both women and their business opportunities as well as large business and what they can avail from women.” The survey showed 48% of women experienced difficulty in connecting with corporate buyers. “Communication remains a strong barrier; only 4 out of 10 advertised in the last six months or have an up-to-date social media or marketing campaign. Many acknowledge that their businesses would grow if they had refined communication and negotiations skills for their products.” From the business perspective, 55% of corporations do not believe that their high-quality products and services can be provided by women. Although 3 out of 10 of all corporations have encouraged purchasing from women, they are not properly implemented.

In order to access the market, women must be more aware of the arena and the sort of demands that exist. “This is a continual process because the market is changing so rapidly. Women need to communicate with their clients and reach them via staff or liaisons if not themselves. When they recognize the standards, maintaining it becomes easier for their recognition in the market.” Women also need to comprehend that they are playing a leadership role as entrepreneurs. “Financial literacy, organizational management, market access are some other very crucial factors. Understanding your ecosystem is extremely important because you need to identify what is permissible and what is not.”

 

Latifa Akhter Shimu is a sparking change in a male-dominated Light Engineering Sector that employs 600,000 people across Bangladesh. She is the proud owner of a light engineering workshop in Tongi, which she has successfully been running for two decades. Latifa has made her profitable business into a family trade, training her husband to join her workshop. This decision helped her sustain when she had taken a sabbatical to raise her children.

The promising sector currently produces over 10,000 products and contributes to 2% of the GDP. When Latifa returned to her workshop, she had realized that her lack of knowledge was lead to dimmer prospects in her business. Latifa enrolled in the BRAC’s training program, PROGRESS (pro-poor growth of rural enterprises through sustainable skills development), a project of SDP with the donor group, the European Union. She learned bookkeeping skills, how to network with potential clients, and help her business expand. She is now an information secretary of the Bangladesh Engineering Industry Owners Association. Latifa radiates the progress that only technical education and market knowledge can support in a competitive market.

PROGRESS is one of the many projects in BRAC’s Skill Development Programme (SDP), which is equipping a nation with the knowledge and tools to create a more progressive and proficient technical sector. 

Asif Saleh, Senior Director Strategy, Communications and Empowerment BRAC & BRAC International

 BUILDING BRIDGES ON A SOLID FOUNDATION
The Bangladesh Government has now recognized that technical education is a viable solution to meet the ever-increasing employee pool; their commendable work has led to an increase in technical education from a mere 1% to 14%. While infrastructure identifies the areas of growth, it is not enough to create an inclusive employment pool. Asif Saleh points out that a tripartite agreement between the government, private sectors, and workers will propel a qualified environment, “The government needs to make sure that certain regulatory standards are in place and they must heavily consider the requirements of the private sector in this context. If you spend a massive amount of training on a set skill that does not translate to a job in the respective sector, there is a disconnect across the employment field.”

Thought the unemployment rate of 4.37% does not seem like much, but there is an average of 2.2 million people enter the labour force every year. “Our work goes beyond providing skills because we understand that connecting the government’s infrastructure to private sector employment involves forging partnerships. And we are there to provide the software for the government.” SDP is currently working with a number of RMG factories, setting up training centres right next to their factories. He explains that the best way to incentivize training is to ensure that people will get a job, “A guaranteed job helps us sell the training. Moreover, some factories provide costs or raw materials making it easier to facilitate the course. We are also focusing on the economic zones and tailoring the education to fit the needs of prevalent industries and sectors in that regions.”

Tasmiah T Rahman, Head of Programme, Skills Development BRAC

PLACING THE RED TAPE ON THE INFORMAL SECTOR
Recent studies have indicated that 8 out of 10 persons in the labour force are a part of the informal economy; collectively they equate to more than 64% of the GDP. Tasmiah Tabassum Rahman explains that informal sector grows organically and formalizing it will take a matter of time: “Policies and processes to merge these sectors can only occur when you understand the complexities of employment on a national scale, the rate of which it is growing, and what is causing this growth.” She uses the RMG sector, which employs 3.5 million people to illustrate this example. “The government has some set standards that a garment industry has to meet and this includes auditing, taxes, and inspections. You cannot just say that these will apply to a micro-enterprise such as a local tailor shop. This is not a one size fits all scenario.”

Tasmiah wants to see a change of perspective, “Establishing a formal system in the informal economy should not be about standards. It needs to be looking at the lack of systems they are under; a primary concern is the lack of taxation.” Today’s digitized economy requires a TIN and national identification for processes such as loans. Many of these people lack the knowledge or access to create accounts and procure loans. “The government needs to step in and make these processes easier. Most of these small enterprises will not want to deal with such lengthy amounts of paperwork and will ultimately remain in a completely informal setting. It is ultimately about showing them long-term benefits through ease of process.”

ADJUSTING THE FRAME OF MIND
A recent study has shown that 60% of RMG workers only receive one to two week of training. Asif equates the lack of focus on skills is the result of a finger pointing, “The conundrum starts with the private sector stating that there is a dearth of skilled workers. On the other hand, there is massive unemployment and underemployment. When asked if they are willing to pay better wages for skilled labor, they are not very keen.” Bangladesh has one of the lowest minimum wages in the sector, $68, compared to India and Cambodia, where is $140 and $137 respectively. “For many people, skills training is extremely costly and the ultimate goal is to earn a higher living. It is common that a person entering skills training is hesitant because of the opportunity cost of leaving their current livelihood and lack of guarantee of a better job.”

BRAC ISD is one of the 14,000 training centers across Bangladesh. The program has tried a number of incentives in order to attract people to their training course: “We have provided bus services, stipends, and other incentives to bring people to our centers and there were still a large number of dropout. In most cases, the long-term benefits were not foreseeable.”

Tasmiah pointed out her interactions with students enrolled in the BRAC ISD program and it is very common for them to pursue vocational training after obtaining a degree, “Many students have a college degree but join because they have no jobs. There are recent cases where students have to go to Saudi Arabia and are now working there because foreign income is more lucrative.” A private education is expensive in consideration to the income bracket. The minimum salary for a government job in Bangladesh is Tk. 15,250, which may not be worth the large investment of a four-year degree. She draws attention to the family dynamic for being a hindering factor for many job opportunities. “You often see that many factory managers are from neighbouring nations such as India and Sri Lanka. This is because employees and parents do not want to say that they themselves or their children work in factories. They do not even bother to apply. It will commonly be looked down upon that someone with a degree is not employed in a stereotypical white-collar job.”

Asif wants to change the perception of vocational training and he evaluates the practicality of it for employment: “There are 300,000 students graduating from universities every year and more than half of them are unemployed. The large number that comes from poor families have invested a huge chunk of their finances in education thinking a degree will get them out of poverty. However, they are graduating with no employable skills and there is have massive frustration when they do not find jobs.” The youth (age 15-24) is the largest growing demographic in the country; the 41% of them that are unemployed highlight the need for expanding mindsets to other forms of employment. “There are 400,000 people appearing for the BCS and entering university every year. The sad fact is, there are only about 2,000 jobs within these qualified fields and a vast majority settle for a job that is below their capacity.”

LOOKING BEYOND THE TRADITIONAL FOR MORE OPPORTUNITY
BRAC has tackled and scaled development solutions for over 45 years and it allows them to continually scale to newer opportunities. Asif was surprised at the success that SDP is having with madrasas. “Our pilot program in madrasas are receiving a positive response. These children come from a very poor background and will not be able to afford university. Skills training gives them a scope for jobs as opposed to opening another madrasa.” There are 9,319 Alia madrasas with approximately 2.4 million students throughout the nations; only three of which are registered with the government.

The NGO is also focused on creating quality in aspiring sectors such as mobile and tech.
Asif emphasized a greater focus on the tech sector, “Bangladesh is rapidly digitizing and the demand for these jobs are also increasing demand for tech solution as well as mobile servicing. This service sector is particularly lucrative because companies are fond of hiring freelance workers for set tasks.” The IT sector generated $1.1 billion in revenue last year and is projected to expand to $4.8 billion by 2025.

WHEN 130,000 SQUARE KILOMETERS IS NOT ENOUGH
Bangladesh ranks ninth in remittance, earning nations with $13.53 billion in 2017. Asif infers that skilled workers will not only increase this amount, “We need to promote portable skills such as construction or hospitality into our workforce so that they can find better jobs outside the country. The government has conducted a commendable survey to find new countries and possibilities for migrant workers in those areas.” A primary reason for remittance lagging behind the Philippines, Indonesia, and India is the result of a lack of skills.

BRAC SDP, supported by a strategic partnership between Governments of UK and Australia and BRAC, currently developing a hospitality program in Cox’s Bazar that will help train workers for the tourism sector in that area. The program is focused on decentralizing training facilities away from Dhaka. “Our training facilities will have assessors who can provide markers that recognize prior learning and experience to certify individuals on their area of expertise. We want our students to have the skill set to work within the country or migrate.”

Tasmiah and her team look into potential sectors that will grow in the coming years, “We have already identified that the caregiving industry in areas such as Japan, the US, and Scandinavian countries will have an increasingly elderly population. These jobs are traditionally taken by the immigrant population in the respective nation.” The global elderly population (aged 60+) is expected to increase to 1.8 billion by 2030. This demographic shift is growing fastest in East Asia; the region is projected to have 439 million elderly persons in the next decade. “This opportunity will also be beneficial for women as current trends show that 80% of women domestic workforce is female. If we can equip them with the skills to provide care, they will be able to procure a much higher income through migration. The number of female migrants has increased by over 200% in the last five years.” Japan accepts up to 1,000 foreign nurses and care workers from the Philippines, Indonesia and Vietnam per year through the Economic Partnership Agreement (EPA). “These partnerships agreements are one of the key steps that will ensure better jobs for migrants from Bangladesh.”

SHARDS OF A BROKEN GLASS CEILING
The National Budget has allocated its 29.65% of its total budget for women’s development; this would mean a whopping Tk. 1,37,742 crore. BRAC has always been a female-centred organization since its inception. Tasmiah states, “All of the SDP programs focus on women. STAR has more than 40% of women, and our light engineering project has a target of reaching 40% female learner as well. We are also working a number of project designs that target only women.” This is because certain trades are stereotyped as female trades; i.e. tailoring and RMG sector. But the labour market should have equal access to both men and women in all trades. Thus, BRAC is in the process of creating examples in the labour market that will showcase female workers in trades that are traditionally occupied by men.

Nevertheless, there are a number of challenges when placing women in a training programs which include the sensitivity of the trainer: “If you look at the most obvious example, the local bazaars, they will not want to hire women because they don’t want to take the responsibility or risk of harassment after it becomes dark. Gender training, responsibility for equal rights and recognition, and behavioural changes all are necessary to foster an environment that allows for women to work.”

She contends that working with employers to build solutions and an egalitarian culture is the solution. “If I were to take 200 women to an electric company to build bulbs, many employers would want to know the incentives. Are they going to receive any government stipends? What is the value addition in hiring women? And this dialogue needs to change.”

CURRICULUM VITAE OF A CONSTANT INNOVATOR
BRAC’s outreach throughout the nation is their greatest strength; its grounded approach creates the most effective results. Asif Saleh postulates, “Our good working relationship with the private sector and government put us in position to facilitate an effective recipe for skilling Bangladesh which can help the larger skills ecosystem in the country.” SDP currently works in 46 districts throughout the country and plans to expand its venture. Tasmiah adds, “We take many factors into consideration when creating a training center, especially in rural areas where it is more expensive. The location, access, and quality must be worth the investment for potential students given that this is a significant financial output.”

The NGO takes on a very customized approach to a traditional matter such as apprenticeship training, modifying it to the most suitable context of the local region. Tasmiah details that each workshop or program works to create opportunity with considerations to the employment dynamic of the area, “We have programs that are 360 hours through a span of six months. These students can either learn a number of skills from building their own businesses to prevocational examination preparation in order to sit for government certification.” Many of BRAC’s donor projects are geared towards the supply side and the generation of employment. However, this is not enough to ensure that the worker is ready for the market. “SDP also works on creating an enabling environment. Our trainees or master craftsmen are taught the traits of a market and how to foster vocational growth. We also teach workers what a decent job is so they can negotiate a certain level of pay, worker rights, and standard conditions. In terms of the employer, we draw their attention to the ILO’s definition of a decent job in order to promote healthier working conditions.”

Asif details that nudging a potential employee with the benefit markers of a formal economic system helps, “When you are trying to convince them to invest time and energy in obtaining certification or formal recognition of their prior learning, you must also instil a sense of confidence in the individuals. Once we demonstrate that certifications allow them to demand a higher salary, and prove their skill level, they are more willing to participate in the program.”

REAL-TIME RESUME: SOLUTIONS THROUGH DIGITAL INTERVENTIONS
With any white collar job, an interview board has already seen the candidate’s history before they enter the boardroom. However, would you ask a carpenter to make a chair or a welder to mould a bed frame as a reference? Asif expounds on the BRAC’s project with a large international company, “We have partnered with them in order to create a system of job matching. The employers rating system will help monitor the duration, quality, and experience of a worker. The program has been built to create an automatic resume for each candidate.” The project’s success would change the mannerism of hiring across all sectors, many of which still use the rudimentary concept of putting up a notice. Tasmiah compares this to services such as Uber or Airbnb, “If you are looking for a tailor with a particular speciality. The service will help you find a number of tailors with their history.” It is also exciting because it will work as a tracking system for workers. SDP usually places graduates in a job and tracks them for a duration of three to six months. “Monitoring candidates for a prolonged period becomes a challenge because they are highly mobile and often change their number. We are only able to track about 50% for longer periods of time. SDP will now be able to do thorough impact assessments of our numerous projects and programs.”

*Photo Courtesy: BRAC 

The production of dairy in Bangladesh is not one to be grazed lightly; the nation houses the 15th largest dairy cow population in the world. According to IDLC, we have more than tripled our production of dairy products from 2.3 million tons (2006-07) to 7.3 million (2016-17). Nevertheless, the 45.8% deficiency per head leaves one wondering if we are utilizing the potentials of the white industry. The social innovators at BRAC Dairy are breaking the supply chains of the sector by eliminating the middleman and empowering farmers through training and knowledge. ICE Business Times converses with Mohammad Anisur Rahman, Director of BRAC Dairy and Food, on making every liter count.

Every Drop Creates a Ripple
Maintaining the quality of milk in most developed nations proves to be much simpler given that it is single sourced or obtained from a number of large farms. Anisur acknowledges the small dairy farmers are the foundation of BRAC Dairy, “Our farmers are scattered across half the country because the country does not have any large dairy farm to produce milk. Collecting the milk and maintaining quality until it is processed is a challenge for us. We train our farmers to collect milk in a timely manner in order for it to be transported to our chilling centers immediately after. We train our farmers and teach them these safe and quality milking ways and how to preserve the quality of the milk immediately after milking.” BRAC Dairy has 28,000 dedicated farmers; 70% of BRAC Dairy’s milk comes from the Rangpur and Rajshahi divisions. The enterprise currently works in the Khulna region of South Bengal and plan to expand in those regions. Anisur explains that they focus on the north because there are not many industries there, “The reason for choosing the north Bengal divisions was because they were poverty-stricken areas. Cultivation is the primary earning source for the families. Since we work with the marginal farmers, we saw a large concentration of marginal farmers in the northern belt of the country. We worked on changing landless or homestead farmers into dairy farming and connecting them into the mainstream milk markets.”

The social enterprise, directly and indirectly, provides training and extension services to its farmers. Nevertheless, Anisur understands the limitations of maintaining such a large dispersed group, “We are able to directly reach about 35% of our farmers right now with all of our services. Training is facilitated in our centers to farmers of that region. It includes knowledge and best practices for breed development, veterinary services, animal husbandry, and preserving the best quality of milk. The farmers then extend their learnings to the farmers we are not able to reach in the form of a farmer’s society.”

“Traditionally cattle rearing and animal husbandry are done by women while men oversee the commercial aspects such as selling milk in the market. If 9 out of every 10 cattle are taken care of by women, we did not see why they could not become the lead farmers.”

Bull’s Eye Compliance
BRAC Dairy is the first dairy company in Bangladesh to receive an ISO 22000 certification. They continually maintain quality at every step of the process and thus yield a standard and diverse portfolio of products. Anisur ensures that the 150,000 liters of milk they collected everyday meets BRAC Dairy’s parameters prior to any processing, “Quality control is essential at every step of processing a food product as sensitive as dairy. It starts with an inspection before the milk enters the chilling centers. We transport the chilled milk through bulk tanks to our processing centers where they are inspected again in order to ensure that it had not spoiled during the transport process. The milk is subjected to a round of quality test prior to being collected into the factory. It only enters the factory if parameters are satisfied.”
The company tackles the challenges through the advent of technology, supporting their farmers at every step. Anisur elaborates that their many stations facilitate the collection, “We have 103 chilling centers to collect milk from our farmers. Furthermore, the 20 satellite collection stations and 67 collection spots assure farmers that they can deposit their collection without the stress of traveling.” The company is currently piloting chilling technologies that will work for up to two days without electricity. The introduction of this technology to the centers would allow for maintenance of products regardless of unreliable electricity connection or generators. The chilled milk is then transported through insulated milk tankers to the processing plant once the quality checks are completed.
It is then transferred into silos from where the pasteurization and standardization process takes place. The range of drinks, powdered milk and butter products are all produced in their factories. Anisur equates maintenance of the dairy to the trained professional who maintains preservation of quality at every step, “We have individuals that monitor parameters at every stage of processing. We will discard any product that does not meet quality standards set by BSTI and related regulatory authorities. And this practice continues post-production. Our cold chain products are preserved in cold rooms where temperatures are controlled. The non-cold chain products are stored in our warehouses until they are delivered to the retailers.”

Never Skimming on Equality
Starting nearly 20 years ago, BRAC Dairy not only works on bettering practices, they are a female-centered organization that challenge dynamics of gender roles. Anisur recalls that the journey to a workforce consisting of 39% female farmers, “Traditionally cattle rearing and animal husbandry are done by women while men oversee the commercial aspects such as selling milk in the market. If 9 out of every 10 cattle are taken care of by women, we did not see why they could not become the lead farmers.”

The company started working with female farmers because they wanted to encourage the birth of entrepreneurs in households where there was no source of income. Anisur believes that the lead by example method instills a progressive mindset, “We worked with the BRAC Microcredit program in order expand. These women would tell their stories at meetings and inspire others. Given that our microcredit interventions run in rural areas, this empowered women and encouraged them to buy cattle. We would enlist these women as BRAC Dairy farmers and guarantee that selling milk would be a sustainable source of income.”

Anisur was particularly inspired when he visited a woman in Sirajganj, “We went with a number of BRAC personals and foreign visitors. I met a female farmer who has a daughter in fifth grade. When I asked her about her future visions for her daughter. She pointed to me and said I will work relentlessly until she becomes an officer like yourself.” He believes that individuals who aspire despite their odds are what keeps BRAC’s social enterprises expanding their reach across the nation.

“We are able to directly reach about 35% of our farmers right now with all of our services. Training is facilitated in our centers to farmers of that region. It includes knowledge and best practices for breed development, veterinary services, animal husbandry, and preserving the best quality of milk. The farmers then extend their learnings to the farmers we are not able to reach in the form of a farmer’s society.”

The Shelf Life of the Sector Depends on the Nation
Bangladesh produces approximately 18 million liters of milk per day, nonetheless, poor linkage leads to a mere 1.8 million liters of this production from farmers to packaging companies. Anisur establishes that lack of competitiveness is a principal factor to limited growth, “When you compete in an open market economy, and the concept of products competing with those being imported incentivizes this. Moreover, the lack of competition amongst local producers diminishes the interest of farmers because they will not earn according to their share.” He further illustrates that the nation has a massive population with small amounts of milk being collected from a large number of sources; this makes collection expensive and is not economically feasible. Anisur also points that the sector requires notable investment and that the government can support this in two ways, “The government needs to discover scopes to create a more competitive industry. They also need to work on protecting the interest of farmers. The dairy industry is very sensitive and if we do not plan to protect the local industry as many other nations it will fail to thrive.”

In the case of dairy, there is a continual demand and that is apparent in the increase of imported powdered milk; in 2007 only 24,000 tons were imported and that number increase to 130,000 tons in 2016 according to the Bangladesh Bureau of Statistics. Anisur infers that competition will be the driving force of cost, “When you can buy imported milk for nearly the same cost, most customers will purchase the imported product. Productivity will increase with competition. When you produce ten liters with the production cost of two, the overall price of the product goes down. We will only see this dynamic in play when there are noteworthy contenders in the market.”

In order to generate the interest of the private sector, the dairy industry needs to show foreseeable profits. Anisur deciphers that investment in the dairy industry is quite different from other, “With dairy investors will not see an immediate profit, an operative dynamic of other agro or food-related industries. The private sector has these limitations because they must justify the investments they are making out of their own pockets.” Financing the growth of any sector requires the advent of technology. If proper technical knowledge and new technologies are applied, the dairy sector and processing can proliferate like it has in many other nations. BRAC Dairy is creating advancements within its own company as Anisur points out, “We are working on artificial insemination and breed development to yield a cow that will produce more milk. Our services extend to veterinary services, training farmers on better breeding, animal husbandry, and nutrition for cows. Our holistic approach is for the overall sectoral productivity in order to make the local dairy market more competitive. We want to encourage practices that increase competitiveness to combat the increasing dependence on imports.” He emphasizes that private sectors are too small to usher visible impact without the government’s support; they need to play an active role to protect dairy farmers and the dairy industry for long-term competitiveness and sustainability.

Tractor Speed Ahead
BRAC Dairy plans to create a second state of the art processing plant in North Bengal. Anisur and his team are strategizing construction in Bogura or Shirajgonj, “Expanding our reach in the north would multiply with the plant. We transport 115,000 liters of milk from North Bengal on a daily basis and it may take up to 36 hours to reach Gazipur. This increases the chances of spoiling; the new plant would process and export the product to the retailer from a much closer vicinity.”

In 2013, the International Renewable Energy Agency (IRENA) ranked Bangladesh as having the sixth-largest renewable energy-related workforce in the world; they estimated that the nation had 114,000 jobs within the sector. Ironically, only 60% of the country had access to electricity that same year, making it lowest of nine Asian Least Developed Country (LDC).

Five years after these findings, the time to invest in alternative energy is a long-neglected cause. In the backdrop of a depleting domestic natural gas reserve, it is a concern that an estimated 68% of electricity generation comes from this source. Imports of electricity (7% of total requirement) have reduced the dependency of costly liquid fuels. However, procuring alternative energy and creating power lines to import electricity should not be the only viable option that Bangladesh should explore. The nation is on the cusp of development in the coming decades and power to transmit sustainable growth is reliant on tapping into sources of alternative energy.

International Finance Corporation (IFC), has collaborated with US-based Excelerate Energy, and Petrobangla to tap into the potential of the liquified natural gas (LNG) as an alternative energy solution. The Moheshkhali Floating LNG (MLNG) project will be Bangladesh’s first LNG import terminal with the capacity to generate 500 million standard cubic feet of gas per day (MMscf/d). ICE Business Times opened a dialogue with Kamal Dorabawila, Principal Investment Officer, IFC and Wendy Jo Werner, Country Manager, IFC Bangladesh, Bhutan, and Nepal and Ramon Wangdi, Vice President – Business Development, Excelerate Energy L.P., on the groundbreaking terminal that will harness a new energy source. 

THE CAPACITY OF FUNDING A LUCRATIVE PROJECT
The terminal is a pioneer project for Bangladesh as it will be the first of its kind to tap into the potential of LNG. Wendy establishes that the necessity and potential of this project drove IFC to become an equity and project development partner, “We had to be highly strategic and emphasize the foreseeable benefits of such a transformative project which proved to be difficult at first. LNG was new to Bangladesh and project financing for fixed infrastructure was new to the developer.” The project sought investors on an international tender basis which attracted very strong investors. These investors included Excelerate Energy, the largest floating LNG solution provider in the world. Wendy postulates that Excelerate Energy came into the project through an early stage project development tool at IFC known as InfraVentures, “When IFC typically comes into a project, we provide the equity, debt or both. In projects that require more support or a stronger partner to put the project together, we look to provide a greater role through IFC InfraVentures. In that sense, Excelerate Energy developed this floating LNG project with us as a co-developer. Towards that, we joined in the discussion with Petrobangla in order to establish the terms and conditions that were needed in the project concession agreements to ensure a balanced risk allocation that allows for the financing for the project. That allowed us to deliver a set of agreements that were bankable for international financiers.”

From a financial perspective, the project’s fixed infrastructure would cost approximately $180 million. However, Kamal explains that this does not include the larger picture, “Essentially we must look at the actual cost of the project in various components; we have the Floating Storage Regasification Unit (FSRU) which is a storage and regasification ship that is carrying out the major function. There is the fixed infrastructure that connects this FSRU to Bangladesh’s gas pipeline system and finally, there are port service vessels which provide operational support to the terminal as a whole. With the terminal located offshore, approximately five-kilometers off the coast Moheshkhali Island, some of the fixed infrastructure includes undersea pipeline with certain components anchored at the bottom of the seabed.” Global demand for LNG has seen tremendous growth in recent years, with global trade reaching 285 Million Metric ton per annum (MMtpa) in 2017; this market is expected to rise to 490 MMtpa by 2030 with Europe and Asia being the key centers for demand. Bangladesh is not far behind in this trend with some projections estimating that the nation would import up to 17.5 million tons of LNG by 2025.

STAGING YOURSELF AT THE NUCLEUS OF THE MATTER
Kamal and the team at IFC took on an unique role given the prospects of this project, “We have been quite active in financing power projects in Bangladesh but the lack of sufficient exploration for local gas and no recent large discoveries, coupled with the rapidly depleting domestic gas sources prompted us to use the IFC InfraVentures tool to help the early-stage development of finding ways to supplement domestic gas. In co-developing this project with Excelerate Energy, we became a 20% equity investor while arranging and providing the entire debt funding package.” IFC’s tremendous investment in the project is noteworthy; the organization arranged a debt package of $125.7 million including IFC’s own loans of $32.8 million and mobilized loans of $91.4 million, in addition to IFC’s equity investment of $10.8 million. The project and financing agreements IFC helped realize and IFC’s own funding went a long way to help put together the rest of the finances.

THE KINETICS OF AN UNRIVALLED COMPANY
Excelerate Energy, the chief sponsor of the project, began the floating regas industry through the delivery of its first FSRU in 2005 and by 2018 has transferred more than 150,000,000 m3 of LNG. Ramon associated the company’s trailblazing attitude to their global success today, “As the pioneer of floating regas technology and the global leader in the space, Excelerate Energy has accumulated a wealth of operational experience through its various projects – this includes providing over 30 years of collective regasification service days to its customers and having performed over 1,300 ship-to-ship transfer operations.”

The company’s infrastructure solutions act as a catalyst for markets, as it allows countries to access an abundant supply of natural gas from a variety of sources globally; throughout its history, Excelerate has performed regasification at 13 terminals globally, located in 8 different countries spanning 4 continents. Ramon believes that Excelerate’s business model, that focuses on developing innovative infrastructure solutions, has been extremely beneficial to the host country of each of its projects, “Projects such as MLNG provide our customers with certainty of gas supply, as it enables LNG to be imported from a variety of sources globally. Driven by this certainty of supply, investment in gas-dependent infrastructure downstream (e.g. gas-fired power plants, fertilizer plants, industrial plants, etc.), flourishes as investors are reassured their plants are able to be supplied with necessary energy and produce over the long term. In turn, the increase in demand downstream produces an economic environment conducive to increased exploration and production activities upstream, as countries explore for additional sources of fuel domestically.” In Excelerate’s experience, this circular process illustrates that LNG infrastructure solutions, such as MLNG, is often a crucial step for a country to propel its gas sector and broader economy forward.
The MLNG terminal comprises a purpose-built FSRU, which is specifically designed for offshore operations. The terminal utilizes state of the art regasification and fuel management technology, marine fixed infrastructure similar to other Excelerate facilities which have been permitted and tested in some of the most vigorous jurisdictions such as the Gulf of Mexico in the United States and brand new port service vessels which have also been purpose-built for offshore operations.
Excelerate’s FSRU – the Excellence – recently arrived at the site for the MLNG project to support the final stages of construction and pre-commissioning related activities ahead of first gas expected in June 2018. The MLNG terminal will deliver natural gas to Chittagong and the surrounding region for 15 years and beyond. With first gas occurring approximately 10 months from securing necessary financing for the project, the timeline for delivering MLNG represents an unprecedented achievement in the LNG industry – with traditional onshore LNG terminal taking between 3 to 5 years to come online following financial close.

PIONEERS OF THE PIPELINE
The MLNG project is slated to be the world’s first fully integrated turnkey floating LNG terminal whereby all services will be provided under a single contract by a single provider – Excelerate Energy. By streamlining the various components of the MLNG terminal under one contract, all responsibilities for developing, permitting, financing, constructing and operating the project rests with Excelerate. Ramon further explains that “Separating the procurement of the LNG fuel itself from the terminal, Bangladesh was able to evaluate a variety of options for procuring LNG in parallel with the construction of the terminal.” By employing this procurement model, Bangladesh was able to significantly reduce the timeline for introducing LNG into its energy system and enhanced its ability to receive LNG supply on flexible and competitive terms.

Ramon commends the government of Bangladesh for its tremendous support and foresight for this project, “Following the execution of contracts with the Bangladesh Oil, Gas & Mineral Corporation (Petrobangla) in July 2016, Excelerate Energy along with its partner, in the IFC, worked closely with the government of Bangladesh to establish a regulatory and institutional framework to not only implement the MLNG project but also to work as a blueprint for implementing LNG related projects in the country going forward.” By running the engineering and financing processes concurrently, Accelerate was able to deliver the project in less than a year following the receipt of all required permits and the securing necessary financing for the facility.
Excelerate predicts that Bangladesh’s economy will excel with the full implementation of the project. “Looking ahead, MLNG shall serve as the platform through which Bangladesh will be able to access an abundant supply of clean energy from the global markets for years to come, and thereby securing its future economic growth.”

CREATING FRICTION IN FUNCTION
When asked about the benefits of LNG for power generation over competing for fuel sources, Excelerate elaborated on the benefits being multi-fold:
· Environmental – Substantial reduction in carbon emissions from power generation when compared to liquid fuels (e.g. diesel) or coal
· Economic – Significant cost savings to generate power via LNG versus oil-based fuel sources. In addition to the lower cost of LNG vs. oil, it takes comparatively less volume of gas to produce the same amount of power compared to oil products due to advancement in gas turbine technology.
· Security of supply – When compared against alternative sources of gas (e.g. domestic production, pipeline imports) which may be disrupted due to geological or geopolitical factors, LNG is a truly global commodity which is produced from a variety of sources and exported by a diverse array of countries. Therefore, LNG ensures the certainty of supply for gas into a market.
· Flexibility – As LNG is easily stored and global trade becomes increasingly liquid, LNG is flexible enough to provide fuel to a variety of different power plants – ranging from baseload power plants which needs a constant supply of gas, to peak shaving facilities where gas is fed into the plant during periods of peak demand. This flexibility also makes LNG the ideal supplement to renewable sources of energy such as wind or hydro, due to the intermittent nature of renewable electricity generation.

UNDERSTANDING THE CURRENT BEFORE THE SHOCK
Natural gas research indicates that Bangladesh is highly likely to deplete its current natural gas reserves in 10 to 15 years. This posed a challenge for Kamal’s investment team, “We would be asked as to why an investor would want to fund a 20-year power project with the future scenario. At the same time, we needed to arrange long-term loans in order to make these tariffs at a lower level. For this, there was a great need to supplement the domestic natural gas reserves.” He equates the crisis to the under exploration of domestic gas resources. Kamal learned of the potential energy sources while he was working with the global oil and gas team in Washington DC. IFC was then supporting Cairn Energy in the Sangu gas fields. The area was discovered nearly 20 years ago, located 45 kilometers southwest of Chittagong. Kamal infers that gas discoveries are a matter of hit and miss, depending on how massive the discovery, “I am hopeful about continued gas prospects in Bangladesh because based on generally accepted geological hypothesis Africa moved away from the Bay of Bengal and they have similar geological formations. Given Mozambique’s large gas discoveries being converted to LNG projects, Bangladesh could also have similar potential if sufficiently explored. However, conducive gas prices are needed to incentivize the high cost of offshore exploration.”

The coastal East African nation just signed a sales and purchase agreement for over 15 year LNG with the French company, Electricite de France. The projector overseer, Anadarko Petroleum will supply 1.2 million metric tons per year under the contract. The company currently oversees more than a quarter of LNG projects in Mozambique. It recently received approval for onshore facilities to export gas. The project is estimated to be $20 billion and will start with two trains that have a capacity of 12 million tons per year and is expected to extend to eight trains that will produce 50 million tons.

Similarly, Bangladesh’s geographic position makes it a gas-prone area and not an oil-prone one. Kamal deciphers the concept of gas prices when there is a domestic reserve, “The price of gas in Bangladesh is relatively lower in comparison to the international arena. To Bangladesh’s credit, the nation has been implementing a number of gradual gas price increases for the last five to six years. When you introduce LNG, it dispels the need for expensive liquid fuels and supports bringing gas prices gradually closer to an international level.” The initiation to realize produced natural gas could easily take a decade after initiating exploration to entirely materialize. Therefore, if they are not taken now, international investors will cease to consider financial opportunities in Bangladesh.

SCALING SOLUTIONS FOR A RADIANT NATION
LNG comes as a viable source of energy because it expands 600 times in its gaseous state, 1 unit of LNG is equivalent to 600 units of natural gas. Wendy understands that LNG is also practical in the context of Bangladesh because it is easy to transport, “One of the key benefits is that regasified LNG can be integrated into the gas transmission system. When CNG started, you had to convert so many stations in order to accommodate the vehicles and LPG. LNG can be moved into the natural gas pipeline so it is immediately and readily available for commercial, industrial, and even residential purpose.” This is well-timed for Bangladesh the economy is growing and the country recently graduated from an LDC. Nevertheless, 50% of enterprises cite lack of access to energy as the primary factor for lagged production. In order to propel the nation, further infrastructure changes are a prerequisite. Kamal elaborates that this growth helped entice investors, “Bangladesh steady macroeconomic growth in the past decade is notable. Nevertheless, manufacturing activities are constrained by energy and power supply. If you reduce the cost of energy and you make the supply more reliable, Bangladesh’s productivity and manufacturing would be more competitive. So this is addressing a key constraint for economic development and would only help that trajectory, leading to a positive cycle.”

Bangladesh recently discovered a gas reserve in the southern coastal region of Bhola; it is reported that the reserve contains 600 billion cubic feet of gas; this would be the 27th in the country. Wendy clarifies that these reserves are still important, “Bangladesh will not be able to completely rely on LNG, and it will act as a supplement to the natural reserves. I believe that these gas systems provide a more appropriate price point in the consideration of whether the nation’s offshore gas reserves should be further explored.” She underlines that this is not an either-or situation. Exploration of alternative sources is the key to meeting the unmet supplies that are needed domestically. The use of alternative fuels would combat the detrimental air pollution scenario. Dhaka has been ranked one of the most polluted cities in the world with an air pollution index of 195. “It is also very important to note that even though Bangladesh has a strong use of natural gas in power generation. There are also numerous plants that make use of heavy fuel oil and even diesel when it comes to co-generation for industrial use. If we can continue to increase the gas availability, that mix of power generation for fuels will be cleaner. Industries will also find incentive in this mechanism as it is cheaper than liquid fuels.” LNG completely reduces the emission of sulfur oxides and particulate and approximately 90% of nitric oxide, making it a much greener option.

INNOVATION: THE ULTIMATE FUEL FOR ADVANCING
The Moheshkhali Floating Liquefied Natural Gas (LNG) terminal has already received recognition at the IJ Global Award 2017 for ‘Midstream Oil and Gas Deal of the Year’. Wendy conceives this recognition as IFC work towards sustainable development, “Clean power production is a key part of our goals. We look for the highest efficiency of power generation when it comes to natural gas spaces. This objective includes increasing the availability of fuels in order for power generation to source predominantly through natural gas. And we would like to see the diversification of energy source with renewable energy in the equation.” IFC strives to create a deeper understanding of how Bangladesh can further engage itself in the international market while maximizing returns to all stakeholders, particularly the people of Bangladesh. “The Moheshkhali project will augment the gas supply by 20%, introducing sufficient gas for up to 3,000 megawatts of power. In perspective, that is enough to power over 3 million homes. We are proud that this pioneering project has had a ripple effect in the energy sector. Our agreements have been replicated to accelerate many ongoing projects with the likelihood of other LNG terminals in the country.”

*Diagram and Photographers from Excelerate Energy
 Source: Reuters, IGA, The Motley Tool, Bloomberg