Now, the Forbes listing is a petty numbers’ game. Initially, we stood at number 1343 among the world’s richest. In the latest listing, we have dropped to the 1400s. This setback was not due to any failing on our part but because of the fall of Nepal’s currency against the US dollar. This numbers’ game will continue year after year, but to be recognized by Forbes was a huge moment for me, one I treasure. I cherish it not so much because I am now a Forbes billionaire, but because I have been honoured by an internationally respected organization, which recognizes only those corporate entities that have been built in a transparent manner. Forbes stands for corporate governance and good business practices. Wealth is just one of its measures. If Forbes were to recognize wealth alone, then its list should have included far more businesspersons than it does.
Forbes has been publishing its billionaire list for the past twenty-seven years, and it is worthwhile to note what Forbes itself has to say about the process:
Though we’ve been at it a long time, it is never an easy task. Our reporters dig deep and travel far. To compile net worth, we value individuals’ assets—including stakes in public and private companies, real estate, yachts, art and cash—and account for debt. We attempt to vet these numbers with all billionaires. Some cooperate; others don’t. We also consult an array of outside experts in various fields.
The Forbes Billionaires ranks individuals rather than large, multi-generational families who share large fortunes. . . . In some cases we list siblings together if the ownership breakdown among them isn’t clear, but here, too, they must be worth a minimum of $2 billion together, or equivalent to $1 billion apiece, to make the cut. We split up these fortunes when we get better information . . . Children are listed with their parents when one person is the founder and in control. Those fortunes are identified as “& family.”
We do not include royal family members or dictators who derive their fortunes entirely as a result of their position of power, nor do we include royalty who, often with large families, control the riches in trust for their nation. Over the years Forbes has valued the fortunes of these wealthy despots, dictators and royals but have listed them separately as they do not truly reflect individual, entrepreneurial wealth that could be passed down to a younger generation or truly given away.
The best thing about Forbes is that it is a source of inspiration to all those who want to make it big in the corporate world by adhering to good corporate governance and not just by accumulating wealth by any means.
It has been rewarding in many wonderful ways to be featured in Forbes. It has given us a lot of visibility and added to our credibility. The moment people from the corporate world come to know that we have been recognized by Forbes, that becomes our biggest recommendation. Wherever we go, we get proposals for joint ventures from the top companies from that country or region, even though they may or may not know much about us. To be featured in Forbes, therefore, is the biggest recognition you can possibly get as a businessperson. It is also one that helps you grow, making you more responsible and more dedicated to good corporate governance. There have been many upsides to this Forbes journey.
An additional reward for a businessman like me who hails from a poor country like Nepal is that the Forbes coverage has added a new dimension to Nepal itself. Look, they say, Nepal has also arrived at the forefront in the global corporate arena, something nobody in this country could have imagined in their wildest dreams even a few years back.
Let me end this chapter with a beautiful story. One of my Sri Lankan friends recently hired a taxi in New York. He happened to take a cab driven by a Nepali. My friend started to chat with his cabbie as they drove along.
‘Sir, do you know that we have a Forbes billionaire from Nepal?’ the cabbie asked him proudly.
‘He was pleasantly surprised when I told him you were a friend of mine,’ this friend later told me.
So our recognition by Forbes has also inspired countless Nepalis, both in Nepal and overseas—which only adds to my happiness.
This recognition does come with its own challenges. Whenever I go abroad now, corporate and social leaders alike ask me why I do not do something for my country. Why can I not transform my country when I can create a global-level company? I feel a bit embarrassed. But then, they do not realize that it is very difficult to transform this country even if I wished to and had the resources to do so. Still, I feel pressured; I feel obliged to become a crucial component in the transformation of the country that was my platform from where I spread my wings globally. I have to justify the recognition I have been given. It is not a question of choice. Whether I can or cannot do this, only time will tell. However, it is not I but the next generation that is going to face the biggest challenges. If they cannot maintain the status we have achieved, it will not augur well for our group. I have already begun to limit my role in our organization. I do not run the business any more. I participate only in big policy-level decision-making, attend only important meetings, involve myself in hiring only the senior staff and focus largely on structural issues in the organization.
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The Chaudhary Foundation
Engaging with the society has always been a way of life in the family traditionally. However, we formalized such activities under the banner of the Chaudhary Foundation in the 1990s, which continues to grow in many facets of philanthropic work related with the group both within and outside Nepal. In fact, post the devastating earthquake in Nepal of April 2015, this foundation has taken the centre stage in not only our personal lives, but also the life of the group.
The Chaudhary Foundation follows our group’s belief in the power of relationships. It was set up to enhance our contributions to society by reorganizing our social initiatives towards a sustainable and focused model. This belief allows our foundation to prioritize initiatives in different sectors within its sphere of influence in a sustainable way. Through various partners, we are tackling some of the most critical issues in each of these areas. Our approach is to focus on a few critical issues through which we can adopt the best methodology and have the greatest impact. The Chaudhary Foundation continues to add to the portfolio of initiatives taken up by the Chaudhary Group over the past few decades. Focused and optimistic, the foundation is working with our partners to identify and implement innovative solutions that can help every person have the opportunity to live a healthy and productive life.
Post-disaster relief and rehabilitation work
On 25 April 2015, a devastating 7.8 magnitude earthquake struck Nepal with the epicentre in Lamjung district (north-west of the capital city, Kathmandu). The government reported that out of seventy-five districts, thirty-five were affected in the central and western regions of the country. Fourteen districts, namely Dhading, Gorkha, Rasuwa, Sindhupalchowk, Kavre, Nuwakot, Dolakha, Kathmandu, Lalitpur, Bhaktapur, Ramechhap, Solukhumbu, Okhaldhunga and Sindhuli were the most affected. According to government reports, the earthquake claimed nearly 9000 lives and destroyed around seven million houses. More than 25,000 people were injured.
Currently, the foundation is busy building 10,000 shelter homes for the people who were made homeless by the earthquake. It is also rebuilding 100 schools that were destroyed in the quake. Besides, it is also building twenty additional schools aiming to provide vocational livelihood training to the youth from the impoverished and disaster-hit communities.
Gyan Uday Scholarship
This was established in 2008 to give recognition to brilliant but financially disadvantaged students of public schools graduating from high school (SLC), to help them continue their studies. Until 2014, 708 scholarships have been distributed. Community schoolteachers contributing to help the students excel are also honoured as part of the scholarship.
CG Nepal Social Business
This is another core avenue of activity of the Chaudhary Foundation.
I have realized over the years that business houses become immortal not because of what they earn but because of what they give.
However, giving is not an easy business. It is more difficult to give in a meaningful way than it is to earn. For instance, when we think of the Tatas, the Tata Memorial Cancer Hospital comes to mind first. Talking about Bill Gates, his social contributions have left a deeper impression on people’s minds than his business activities. The same applies in the case of the Birlas and others. But I have also seen that many charities run by business families have fallen apart over time. Not all charities are sustainable, or have a sustainable impact on the lives of the people they aim to help. Our family has been running many different charitable campaigns over the years to engage with the people. One of them was a campaign called Sikchhit Nepali, Sambridha Nepal (Educated Nepali, Prosperous Nepal), which provided scholarships to children. We are now building a research centre to study the ancient faiths and shrines scattered throughout Nepal. However, I have not been completely satisfied with these efforts. I have always wanted to do something more meaningful and of greater impact.
When I visited Bangladesh for Mintoo’s son’s wedding party, I had urged Mintoo to take me to Professor Muhammad Yunus. I wanted to explore the possibility of emulating the spectacular Bangladeshi model of microfinance in Nepal. Mintoo took me to the Nobel laureate. As we discussed microfinance, Professor Yunus began talking about social business.
‘I have now realized that I can do only so much with microfinance institutions,’ Professor Yunus told me. ‘Microfinance alone cannot transform a country’s economic destiny, though it can bring about social change. If you want to transform a country, it can happen through social business. The day business houses realize social business is the way to go, the country will transform.’
‘What is this social business?’ I asked.
‘Social business is business done without any expectation of dividend,’ he replied. ‘But that business has to address social problems and it has to be sustainable.’
He then explained to me the seven principles of social business:
The business objective will be to overcome poverty, or to tackle one or more other problems (relating to education, health, technology access, or environment) that threaten people and society, not profit maximization.
Financial and economic sustainability.
Investors get back only their investment amount. No dividend is distributed.
After the invested amount is paid back, the profit stays with the company for expansion and improvement.
The business will be environmentally conscious.
The workforce gets market wages and better working conditions.
The business is done with joy.
I was very impressed with the idea.
The Government of Nepal once had the Yuva Sworojgar Yojana, or Youth Self-Employment Programme. But that was a rather politically motivated scheme to mobilize party cadres and to distribute subsidized loans to them. When it comes to genuine social business, merely distributing money is neither sufficient nor efficient. I think the most important components of social business include training and business incubation. What could young people with bright ideas do without the required capital to set up and run their own enterprises? Could they ever become another Binod Chaudhary? I had my small family business as my stepping stone, but what about them? This question had been haunting me for a long time. I felt I had finally found my answers now, thanks to Professor Yunus.
I started to work more closely with the professor. I invited him to Nepal in the context of an annual general meeting of the CNI.
‘Let’s start a social business in Nepal as a joint venture,’ Professor Yunus proposed. ‘We will give you the know-how and the system, and you build the organization.’
I was more than happy to embark on this, as by that time I was fully convinced that Nepal was the ideal place to run a social business. On the one hand, Nepal has not been able to tap its tremendous natural resources, while on the other, around 1500 young Nepalis fly abroad every day seeking jobs, as employment opportunities are scarce in the country.
At the venue of the AGM itself, we pledged US$1 million for the cause—not a small amount in the context of a small country like Nepal. This way, our organization would be sustainable, with or without me. Today the Nepal Social Business team has been working on a war footing to achieve its aims. It is getting support from other international organizations, including the Lions Clubs International.
Professor Yunus has been inviting me to many summits related to social business. I was a speaker at one of the summits in Dhaka. He also invited me to another function in Malaysia. In 2013, Forbes invited me to its 400 Philanthropy Summit in New York as a speaker. In attendance were the top philanthropists from across the world, including Warren Buffet, Bill Gates, Bono and Ted Turner. I was invited to the summit again in 2014. Nirvana attended that time around.
As I get more and more involved in social business and enter the bigger league of philanthropists, I am getting more and more confident that if we can properly position Nepal Social Business, we can raise millions of dollars for the cause. Let us face it, the US$1 million we pledged for CG Nepal Social Business is peanuts if we are talking about creating self-employment opportunities for our young people. The Chaudhary Group, on its own, cannot meet that challenge.
We are now working towards taking CG Nepal Social Business to the next level. We are trying to get the world’s top philanthropists to join the project in Nepal. We tell them that if they engage with the people of Nepal through the social business programme, they will not have to spend a single penny on administrative expenses. The CG team takes care of the administration, free of charge. Today, there are about 5000 NGOs and INGOs in Nepal, and a whopping 30–40 per cent of the money pledged to them for social causes is spent on administration. This is a big irony. With CG, every penny spent in Nepal will be deployed for the core cause.
A major conference of the Lions Clubs International, with participation from around thirty countries, was held in Nepal some time back. The president of the Lions Clubs International, Barry J. Palmer, also attended the conference. I was invited as a guest speaker. There I talked about why I am deeply committed to social business. Palmer was so impressed by my speech that he suddenly rose from the dais and floated a proposal for a partnership with us. I was invited to their global conference in Toronto, where I was asked to make a presentation in front of some 18,000 Lions. Lions Clubs International signed a partnership agreement with us in Toronto itself.
For the first phase of our social business, we have identified five projects in the remote, hilly district of Jumla in Nepal where poverty is rampant. We have already trained young local entrepreneurs. We are ready to provide US$30,000 for each project. This is our pilot scheme. We will soon scale it up and cover ten more districts. Lions Clubs International has pledged US$2 million for the next phase, an amount sufficient to establish around seventy new businesses in Nepal run by young local entrepreneurs using local resources in such a way that they touch the life of the local residents. This is how we are planning to transform the economy of the country.
So far, young people in Nepal have had very little to look forward to. We are instilling hope in our youth. And the best part of it is that our solution is not charity. We will call for proposals, and our team will study them, and identify the projects for funding. The selected projects have to return the capital once they start making profits, after which the money will be reinvested in another project. As the entrepreneurs cannot get ownership of their projects until they pay back the capital, there is no possibility of misappropriation of funds. Further, each project we support will, in turn, have to support another social business. In this way, the young entrepreneurs also become the pioneer social business promoters in their region, creating a multiplier effect. There are other benefits too. One of the projects we are supporting in Jumla will manufacture malt-based nutritious food for children using local produce. Malnutrition is a major problem in Jumla, where life expectancy is as low as 47 against the national average of 6
5. Our project will address malnutrition, use locally produced raw materials, will create employment at the local level, and thus make for another viable enterprise in the country. Look at how many birds we are killing with one stone!
Mark my word, if Nepal Social Business functions as planned, someday the Chaudhary Group will be better known for social business than for Wai Wai or any other venture. I cannot tell you when that will happen, but I can tell you that we are moving in that direction.
Here, I would also like to add that I want to manage a programme designed on the lines of The Apprentice run by Donald Trump someday here in Nepal. I think it is a fantastic idea.
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African Adventure
Africa is the story of a continent with unique, unparalleled natural resources and opportunities that are badly managed—a living example of the famous argument that if natural resources were the parameters determining the prosperity of a nation, Japan and Singapore would have been the poorest and perhaps Africa, Nepal and their like, the richest. Prosperity is all about quality of governance, leadership and the courage and vision to bring the economy to the centre stage. It is not politics-for-the-sake-of-politics that builds a country. It is politics for the sake of building a country that builds a country. Political decisions need to be directed in accordance with the country’s inherent strengths to deliver a better quality of life to its people.
However, currently, one is beginning to see some of the African countries follow the very successful story of South Africa post the emergence of Nelson Mandela. It was Mandela’s statesmanship that resulted in the end of Apartheid, bringing the whites and blacks together to build a resurgent nation. He had to persuade his people to forgive and forget. South Africa wrote its Constitution in record time, moving on to become a cohesive nation, perhaps one of the most successful in the entire African continent. Some of the countries on the continent are trying to emulate South Africa, but many, still riven by Third World politics, are not. However, there is a growing desire among investors to go to Africa.
Making It Big Page 33