'People think Brac only works for the poor, but we work with many different models for nation-building'

A big share of Brac's success can be attributed to its social businesses under Brac Enterprise, which is currently headed by Tamara Abed. In a recent interview with The Business Standard, she discusses the current scope of work of Brac Enterprises, how it plans to support the larger Brac organisation in the days to come, and ambitions of international expansion.  

Photo: Noor-A-Alam

TBS: With the country graduating to middle income status, how does Brac plan to navigate its operation here in future? Many of the aspects Brac focused on in their early years are no longer pressing issues for Bangladesh. Do you envision any change in approach or the work you do in the changing spectrum?

Tamara: First of all, Brac is relevant to the needs of people. So, as the country develops, there are changing needs and more needs will emerge. And we are starting to work in new areas. Let me talk about enterprises first. 

In the '70s, '80s and '90s, the enterprises that Brac developed were mainly focused on rural areas and focused on livelihoods. So, how do you generate income for people through different means that are available or different things that can be developed in the rural economy? Agriculture was obviously a big space. 

So, we worked a lot with developing agro-based social enterprises. We set up the Brac Seed and Agro Enterprise so that farmers get good quality input; we set up fisheries as Bangladesh had just started delving into aquaculture and we wanted fish farmers to get access to good quality fish seeds in order to make their businesses viable.

Farmers also needed a lot of training to work with these newer processes and inputs in agriculture. For example, after the green revolution in India in the '60s, Bangladesh also started adopting high yielding variety and hybrid seeds. And once the government decided that Bangladesh was going to work with these seeds, Brac worked a lot with importing these seeds and training farmers in the field on how to use them — how to use these crops, how to irrigate the fields, and when to apply pesticides. So, all of this hand holding was needed along with this technological development in agricultural inputs.

Brac was the first one to set up a dairy enterprise in the private sector. For the first two and a half decades of Bangladesh, we only had Milk Vita and imported powdered milk. In the mid-90s, Brac decided to set up its own dairy enterprise. The main aim was to collect milk from smallholder farmers and encourage the development of the dairy industry in Bangladesh. It was also a very good means of generating rural livelihoods.

The other big one is Aarong, again to do with livelihoods. How could women sitting in their homes generate additional income for their families? Now, with the middle income, those needs are changing. Livelihoods are still  a problem, and will continue to do so. But the nature of the problem is changing. 

So, now we need to think about urban livelihoods. In the first four decades of the country, we talked about education. Now, for the last 10 years, skills have been a big thing. There is a huge young population and they need skills. So, these are some of the new areas we are now looking at. 

Recently, in March, we launched a new health care enterprise called Brac Healthcare. This is targeted towards the middle class. And we now feel that as the country becomes a middle-income nation, we will not only serve poor segments. Brac will also serve lower middle-income and middle-income segments as they too will have burning needs that Brac can address. 

So, for example, health care is a big crisis in the country. People have huge out of pocket expenditure - one of the highest in the world. And they are getting cheated left, right and centre and are not getting quality services either. This is where we feel we can now play a role. 

We are also looking at renewable energy and biodegradable packaging.

On the development side, we are also looking at different kinds of programming. Climate change, as you know, will continue to affect Bangladesh and all of us will have to work together to innovate solutions that are climate adaptive. 

So, Brac's development programmes are working very closely with people on the ground and coming up with a lot of innovative climate adaptive solutions, whether that be climate resilient seeds, water shortage in salinity-prone areas, or climate resilient housing and then coming up with different models and working with governments and partners.

Another problem is that as the economy evolves and you get higher up Maslow's Hierarchy of Needs, then come people's emotions and mental health needs. So, we are piloting a new programme on mental health to see how we can train para-counsellors who can work in rural and urban communities to be the first point of contact. 

But this is something that is hard to find funding for. There is not a lot of development money in mental health. Mental health care is also very expensive. For countries like Bangladesh, there will never be enough psychiatrists or psychologists. 

But the needs are immense. We have had the pandemic, we have had natural disasters and people have suffered a lot of loss, along with their trials and tribulations of daily life, which is difficult in Bangladesh. So, in society there are a lot of reasons for mental health issues and these have to be addressed to maintain social harmony and cohesion. 

This is something that is difficult for a country like Bangladesh to afford, and we don't have enough specialists. So, we need to come up with a cheaper model. For example, Brac has worked for decades with community health workers because we did not have enough doctors to address primary health care needs. 

The community health worker model was an effective and efficient one for Bangladesh. And we have been able to address a lot of issues like immunisation, family planning, basic diseases, and non-communicable diseases. These health workers are people's first point of contact, through whom people are finding out whether they have diabetes, blood pressure or other basic diseases.

So, Brac will continue to find problems that need to be addressed and hopefully find effective solutions. People think Brac only works for the poor, but we work with many different models for nation-building. Brac has a university to build pro-poor leaders, we have Brac Bank to address to address the SME gap. And Brac wanted to show that commercial banks could lend to small and medium enterprises successfully and profitably. 

Brac has, through different vehicles, addressed different sectors. Of course Brac's core work is poverty alleviation and empowerment of the poor and ultimately it all goes back to that. For example, if Brac is trying to develop SMEs in the country, that also creates livelihoods for millions of people. Brac has never shied away from setting up different vehicles to address different issues.

TBS: After the pandemic, the war in Ukraine thrust the world into a multi-dimensional economic crisis. Is the largest NGO of the world immune to such global predicaments? Do you feel any pressure?

Tamara: Brac is not immune at all, just like everyone else, Brac is very much exposed to these fluctuations. Obviously costs have gone up for our enterprises. Fuel costs, electricity costs, high import costs affect us, we get problems in opening LCs, just like everybody else. All our social enterprises have been affected by higher costs. Salaries have obviously increased more dramatically than in the past because of the high inflation. 

We found that during Covid-19, a lot of people who had not been categorised as poor became the new poor. And Brac started working with this group. And Brac will also continue to work in any kind of crisis, such as the Rohingya crisis, natural disasters, man-made disasters etc.    

TBS: Is the changing global funding scenario encouraging you to focus more on Brac Enterprises so that the organisation has more financial freedom in the future?

Tamara: You know Brac enterprises was never set up to fund Brac. It was set up to address the mission of Brac, address social problems. The surpluses that we ended up generating are a byproduct of the work we were trying to do. Now that the enterprises have reached a certain scale, there is certainly pressure. But the decisions are made based on it being a social enterprise. Profit maximisation is not our primary agenda. 

Photo: Noor-A-Alam

For example when we think of putting products into Aarong, we don't think of putting only the most profitable products. Sometimes if you buy some Chinese products and sell them, it might be more profitable. Or something more lucrative is more profitable sometimes, but we want to support a group of artisans. So, we give their products large spaces in our outlets, which are in quite expensive areas. These are not necessarily profit maximisation strategies. 

We keep milk chilling centres in underdeveloped areas, like those in North Bangladesh, where most people do not go and set up these centres. Our competitors set up these centres in areas where it is lucrative, where there is more production of milk and bigger dairy farms. 

We also put up centres where we feel there is potential to develop the industry as well. The idea is that if people see that they have a guaranteed place to sell their milk, then more farmers and more people will be interested in buying cows and getting into dairy farming. Sometimes these projects are not viable for years but because we have a development perspective and we are not just trying to make money out of selling pasteurised milk. 

So yes, there might be pressure - it would be good to grow faster - but it is never at the expense of our social enterprise mission. Even at the interest of the stakeholders that we are trying to serve, make more profit and invest it elsewhere, if it is at the expense of our social objective, we are not going to do it. 

For example, we do not want to now make Aarong more commercial. Aarong makes handmade products so it is more time-consuming to scale. If the business was based on factories, we would have been able to scale much faster. But that is not our intention. Aarong's intention is to create livelihoods for women in rural Bangladesh and people who are involved in making crafts. We also want to keep the craft heritage of Bangladesh alive.       

TBS: How do you distinguish the operations and mission of Brac Enterprises from the larger Brac organisation?

They differ in the way that it is structured. For example, development programmes usually get donor grant money for certain programmes and projects. The enterprises solve social problems through a business model and that is more of a self-sustaining model. But it addresses the same problems and same mission. Although it's structured differently and the way we operate and the activities we do are different, the problems it addresses or the mission is the same. 

TBS: Most of the companies under Brac Enterprises have very successful brands in the market. What do you think allowed Brac – an NGO – to be so successful in business? What can Brac teach other NGOs, as well as business, about what drives success in the marketplace?

I think Brac has been successful with its enterprises in the same way with its development programmes, firstly because whatever we try to do, we try to do it well and professionally, and there is full commitment to it.   

And Brac has operated with a lot of courage and ambition about where it wants to go. With Aarong, for example, Brac was never satisfied with it being like one handicraft store and some women making handicrafts in a village somewhere; it wanted to be a national brand, a mainstream brand that was not just appealing to people's altruism. 

It did things professionally like any other fashion brand and in fact, pushed the fashion industry in Bangladesh. It tried to do things before its time, before other brands were doing them. So, whether it's fashion shows, photoshoots, marketing or the ambiance of our outlets, Brac was never satisfied with mediocrity.

However, I think the real success comes from the fact that Brac's social enterprises have always addressed the interest of all its stakeholders. So, it has not been looking at it like any other traditional business. The first interest that one looks at are those of its shareholders. 

But with Brac, since there are no shareholders and it is wholly owned by Brac, there is no personal interest here; the main thing is the mission. Are we serving people, are we solving the problem we set out to solve? And those problems, in Bangladesh's context, have been on a national scale. And because the problems have been large, our solutions have also aspired to reach that scale. 

In order to have impact, you can't just be small. Our founder used to say, "Small is beautiful, large is necessary." And in our context it is a foregone conclusion; we have a large population with a small amount of land. If we can find a solution for 50,000 people, why can't we scale it for a million people, why can't we expand that for 10 million people? It is a question of building systems, management structures, and processes to be able to do that. And we haven't tried to cut corners with that. 

Now, there is a big realisation in the global world of business that the climate needs to be addressed, that companies need to be more responsible, that companies need to address the needs of their community, that they shouldn't be making money or doing anything at the expense of the community or the planet. This realisation is now coming because there is a climate crisis. Because Brac is a development organisation and it set out to solve social problems, Brac Enterprises has been dealing with this from the start.

So, when we look at seeds, the first thing we are thinking about is farmers' productivity. We are going to sell the seeds to farmers, it is not important to us how much profit or margin we make out of the seeds. My point is that the farmers have to reap the benefits out of that. They have to see the yield that we are promising and they have to make money. And then only we can have something sustaining where the farmer is also able to trust our seeds and we are also able to grow with them. 

So, Brac's interest has always been very much aligned with the people whose problems it is trying to solve, or the people with whom it is working, whether it is the producers or the consumers of Brac's social enterprises. 

By producers, I mean Aarong's artisans. By consumers, I mean seed farmers and fish farmers who actually buy our products. So, I think the reason behind our enterprises' success is that we have tried to build ecosystems, and we have also tried to address the needs of all our stakeholders. 

Let me elaborate on building ecosystems: when Brac started working on a project or business, if it found that it was unable to do that because of something else that wasn't working, it then usually tried to solve that problem too. For example, when Brac started working with poultry in the '90s through an income generating programme where we would give 100-day-old chicks to women, i.e, microfinance clients so that they could have small farms within their homesteads, raise these chicken, be able to sell eggs, and consume more nutritious food. 

Brac later found out that hybrid chickens, which produce more eggs and meat, have a different kind of mortality rate and they need different kinds of vaccines which our local breeds don't. So, then Brac had to develop a vaccination programme for poultry in each village to be able to keep the chickens from dying and ruining the women's businesses. We started training vaccinators in each village and the vaccinators would get their vaccines from the local livestock and poultry office. 

Once that kicked off, another problem was identified: a lot of the fridges in the government offices were not working and it would be months before a fridge could be fixed. By that time, the vaccines stored in the fridge would lose their efficacy. Brac then hired mechanics all over Bangladesh on its own payroll, gave the number of that region's mechanic to the government office and asked them to call the mechanic if a fridge broke down. So, we worked it into our project and our budget, and hired these mechanics and so that a problem that was taking months to solve, could now be fixed quickly. 

When we started working with dairy, we figured that all these people are investing in cows, but the local breed is very unproductive — it only gives a litre to maximum two litres of milk a day. If these people had access to semen and could have hybrid cows, that would go up to 10 to 20 litres a day. So then Brac setup artificial insemination in the '90s to improve the breed of cows in Bangladesh.                  

TBS: How would you distinguish Sir Fazle's leadership with that of yours and others who are at the helm now?

Sir Fazle Hasan Abed deeply understood many things, and he had great vision. He was also such an ardent and voracious reader of history, he knew how the world had evolved from thousands of years ago — how things evolve and how things rise and fall — so he could see how things may pan out years from now, or what the country might need. I mean he was all of the things that people talk about, a visionary, had a lot of courage, humility, and a very sharp mind. He could do multiple things at the same time. 

His appetite for wanting to do things was beyond our imagination. In 2001, I remember we started Brac University, Brac Bank and went international with the organisation. And Brac was not an organisation that had everything set and we would just be able to go in so many directions. But because he had the vision and ambition and also the management expertise, he drove the organisation forward. He constantly pushed us. He not only had a deep understanding of development, he also had a very deep understanding of business. 

In leadership now, I wouldn't say that there is anyone who understands both development and business as deeply as he did. There are many other things that people don't have that he had, but I think now it is a collective leadership. All the senior members of the leadership team bring in different aspects of what Sir Fazle Hasan Abed had. But I don't think there is any one person or place that encompasses everything that he did, but I think collectively, we all bring a lot of things to the table. 

And Brac has also evolved governance structures and systems in order to replace the role that he used to play, because he used to be the glue holding together Brac the development organisation, all of our investments, the university, international operations, and affiliate offices. And we needed to set up a governance structure and mechanism, a board, and a sort of global office in order to be the glue, so that all of these organisations realise their own potential, but also march to the same drum. 

TBS: In recent years we have seen quite a bit of expansion of Brac International. Where do you see Brac in the next decade and the decades to come?

Brac International will also look at, and is already, looking at social enterprises because there are a lot of opportunities. Brac International works in countries in Africa and Asia and there are many opportunities, many problems that social enterprises could be the vehicle to address. Brac International is independently looking at social enterprises in the geographies it works at and has a few of them already in Africa. Of the enterprises in Bangladesh, there are some that have global ambitions. Aarong, for example, will definitely expand outside of Bangladesh. 

We already sell through our e-commerce platform. But of course we will be going into more countries and will also be setting up outlets in some of these other countries. But Aarong will also look at sourcing from other developing countries because ultimately we want Aarong to become a global platform for crafts and artisans from developing countries. 

For Brac, we do have a global strategy and we had actually developed some aspirational targets before our founder passed away. We now work with or reach about 120 million people around the world; our target is to reach about 250 million by 2030 and that growth of people we reach through our work will come mostly outside of Bangladesh as it is now approaching middle income status and a lot of development money is running out. So, a lot of growth will be in Africa and other countries in Asia. 

Brac will be growing in quite a large way in international countries and we will do that in two ways. We work on the ground and deliver services and do programming on the ground. We also have a model where we provide technical assistance on some of our flagship development solutions to governments and organisations in other countries. And that is through our ultra poor graduation initiative. It is a well researched model and Nobel laureates Abhijeet Banerjee and Esther Duflo got their Nobel Prize based on the research on Brac's work in this area of extreme poverty. 

This solution we find is something that a lot of governments and institutions want to learn from Brac. We have a team who does that. And we are able to amplify our work not just through the services and through programming that we do on the ground or the enterprises we might run on the ground, but also through technical assistance to other institutions and governments and partners. 

As we see crises and their frequency increasing, humanitarian and emergency situations around the world come much more often now. And so that is something that Brac will also work with, not in emergency response, but in the humanitarian development nexus. So what it does with the Rohingyas now. And now we have developed capabilities in that area.