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The importance of competent governance: a view from the ground

By Chandran Nair / Founder and CEO, The Global Institute For Tomorrow 21/04/2019

The Global Institute For Tomorrow (GIFT) is an independent, pan-Asian think tank, with offices in Hong Kong and Kuala Lumpur. At GIFT, we focus on the shift of influence from the West to Asia, the changing rules of global economics and geopolitics, and the role of government and business in the 21st Century.

Our work takes us across East, Southeast and South Asia, in countries like India, China, Cambodia, Indonesia, Myanmar, Mongolia, and others.

One aspect of our work is powering innovation within large companies by facilitating six to seven programmes each year. Our two-week programmes have two modules. In the first module, we bring young professionals — from government, business and civil society — to either Hong Kong or Kuala Lumpur, where we expose them to important new concepts through discussions, breakouts and role-play exercises.

In the second module, we push participants to apply these concepts through a real-world, experiential field project. Our projects take participants to places they would never experience normally. Sometimes these places are remote villages in rural India, China or Indonesia, but sometimes they are much closer to home, such as low-cost housing estates in ultra-urban Hong Kong.

But all of these projects are connected in their attempts to solve real-world problems, from financial inclusion and affordable housing, to rural electrification to farmer organisation, through an innovative, financially-viable and socially-directed business model. Participants, through stakeholder interviews and collaboration with each other, build these models in just one week.

These projects have given us novel insights in what business and policymakers can do to solve persistent socio-economic issues and how civil society can work in partnership. Just as importantly, they provide insights on what some of these entities can’t do. One conclusion we have reached is that while businesses and committed entrepreneurs can innovate when it comes to solving social issues, their solutions can be difficult to scale without the cooperation and partnership of the state.

We have seen how the government’s engagement can vary through some of our programmes.

In August 2017, we travelled to China’s Yellow River Golden Triangle to work with the Puhan Cooperative: a farming organisation run by Madame Zheng Bing, a successful rural entrepreneur. We were there to help her develop an integrated model that would connect her farmers with consumer markets in nearby cities.

China presents a positive case of how the national government acts as an engaged partner. The central government is not always directly present in rural communities, but it gives guidance on which socio-economic issues it wants to tackle, whether these are developing left-behind regions or repairing environmental damage. This also acts as a signal to businesses and organisations that their efforts in these areas will receive public support. This is what guides China’s largest companies, such as Alibaba, to develop their own strategies for rural development.

Our programmes in India present a different example of government engagement. In March 2017, we brought a group of business leaders to work with Swarna Pragati Housing Microfinance, an innovative provider of incremental housing finance, and the winner of the MetLife-Wall Street Journal Financial Inclusion Award. The founder, who had come from the public sector, successfully lobbied his state government to accept community land titles as proof of ownership, unlocking finance to rural families across Tamil Nadu.

Participants on our programme found that Swarna Pragati’s most difficult challenge, unsurprisingly, was scale. India’s housing challenge is massive: 43 million homes are needed in rural areas to cover the shortfall. India’s government recognises the problem, launching a massive housing construction campaign titled “Housing For All”. But progress has been slow, with only 4% of approved homes actually being constructed.

India shows the importance of governments having the ability to follow through on their pledges: Swarna Pragati, or any other innovative business provider, will never to be able to completely resolve India’s social issues without the engagement of a capable government.

Of course, governance exists at multiple levels: not just national, but also federal, municipal and local. In November 2018, we brought a group of young leaders from across ASEAN to Jakarta to work with OK OCE, an initiative by the Municipal Government of Jakarta to upskill marginalised and under-educated communities across the city.

Working with the Jakarta government shows how local and municipal governments can be willing partners for enterprising business leaders. They are “closer” to the issues, and more accountable to those citizens struggling with them.

But while they may be willing and able partners, their reach is limited. Job creation is not a need solely in Jakarta, but also in Surabaya, Bandung, Medan and other cities. But the Jakarta government has little ability to help spread any solution to other cities on its own without the cooperation of the national government.

The importance of the state as a willing and able partner is not something people in business, or even the NGO sector, often consider. Governments are seen as too lumbering, too complicated, too slow or (especially in the developing world) too corrupt to be good partners. But their engagement is needed if innovative solutions are to be scaled to a level where they actually solve the problem.

These are the kinds of mindset shifts we try to engender on the business talent that comes on our programmes: a true understanding of how business and society in these emerging markets actually works, fostered through our unique learning methodology.

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