Opinion - News Analysis   

A B-school to empower the poor

Very few people have heard of Christopher Chandler, a reclusive billionaire from New Zealand, and that is the way he likes it. But the secretive tycoon wants to leave his mark on the world by bankrolling a business school for developing nations.

Chandler, a small-town beekeeper’s son who has built a fortune estimated at $1.7 b, is a sort of antipodean version of Warren Buffett. Along with his brother Richard, he has bought and sold chunks of Hong Kong property, Brazilian telecoms, Japanese banks and Russian electricity enterprises.

Throughout his career, the 48-year-old Kiwi has nurtured the lowest of profiles — in Forbes’s annual ranking of the richest, he is represented by a silhouette because no public photo of him seems to exist. But in a rare overt gesture, Chandler has committed $50m to the creation of a unique school in the U.S. aimed at nurturing entrepreneurs with business ideas to help poorer countries step beyond poverty.

The Legatum Centre for Development and Entrepreneurship opens its doors in Boston this year with an initial crop of 12 postgraduate students from nations including Rwanda, Nigeria and Pakistan. The centre, which is attached to the Massachusetts Institute of Technology, is intended to create a generation of business leaders in poverty-stricken parts of the globe.

The centre is headed by Iqbal Quadir, a former Wall Street banker who created Grameenphone — a $4b company that popularised mobile phone use in rural Bangladesh by allowing handset owners to sell minutes of airtime to their friends and neighbours.

“We want to take people with half-baked ideas and help them to complete the baking process,” says Quadir, who came up with the idea for the school and was introduced to Chandler through mutual friends.

Among the Legatum centre’s initial crop of scholars are students working on ways to harvest rainwater in eastern Africa and to incubate mobile phone technologies in Pakistan. A doctor from Nigeria wants to build a business using mobile technologies for health diagnosis. And the Sri Lankan founder of a new media laboratory in London has taken a place at the centre with hopes to commercialise south Asian art.

One of Legatum’s MBA students, Craig Doescher, wants to bring hand-made wooden toys from Honduras to the U.S. market. He says the central American country has a plethora of high-quality, exotic types of wood so unknown in the west that they do not even have English names — and that these materials could become as fashionable as mahogany.

Another student, Amy Banzaert, is an engineer working on a method of producing low-cost charcoal in Haiti using sugarcane waste instead of timber. She points out that deforestation rates are approaching 98 per cent in Haiti.

“Charcoal is typically made out of wood and sawdust — people have been doing that since the dawn of time,” she says. “That works very well until you start facing deforestation. It’s led to environmental consequences and poverty consequences. People are choosing between eating and buying fuel.”

The centre is named after Chandler’s Dubai-based Legatum investment empire. “Aid plays an important part in development but it’s a very limited role,” says Alan McCormick, managing director of Legatum Global Development. “Actually funding people in poverty takes a much more creative view.”

He points out that countries from the OECD have given $650b to sub-Saharan Africa since 1960 — but much of the continent remains deeply impoverished. “Huge amounts of capital have been allocated to shift growth, but there’s been very little change,” he says. “We came to the conclusion that business is the key driver of development — in fact, business is development. You have to empower individuals to set up businesses and engage in enterprise.”

It is not the first time that Chandler has committed funds to enterprises in emerging markets. The tycoon last year invested $25m in India’s leading microfinance lender, Share Microfin, which specialises in providing tiny loans to people who have no access to formal banks.

The concept of microfinance - and of encouraging entrepreneurship - has been popular in development circles for many years, although opinions differ on how effective it can be in creating jobs in the medium term. But the Legatum centre is in stark contrast to MBA schools where graduates generally aim for well-paid jobs in consultancy or industry.

“We have a very successful fund here,” says Mr. McCormick. “If we wanted to just make money, we’d keep all our investments in the fund. But we’re looking to invest in people, ideas and situations. We want to build the intellectual capital of developing nations.”

Printer friendly page  
Send this article to Friends by E-Mail

Stories in this Section

Barack Obama is nearly there
Pressures on industrial safety
Nine scenarios for the nuclear endgame reality check
India needs global universities
An Islamist vow against U.N. peace talks
A B-school to empower the poor
It’s to Iran the West should look for secure energy
Four years of UPA
Challenges to NREGA
Patil’s remarks
Organ donation

Copyright © 2008, The Hindu. Republication or redissemination of the contents of this screen are expressly prohibited without the written consent of The Hindu