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Market-based approach to development

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WaterSHED executive director Phav Daroath at the NGO’s headquarters in Phnom Penh last month. Hong Menea

Market-based approach to development

Phav Daroath recently became the first Cambodian to be selected for the Forbes 30 Under 30 Asia list for social entrepreneurship. The Post’s Matthieu de Gaudemar sat down with Daroath, the executive director of the local nonprofit organisation WaterSHED, to talk about the value of market-based solutions for solving the country’s social problems.

Can you describe what WaterSHED does?
WaterSHED is an NGO that is trying to use a business approach to tackle sanitation issues in Cambodia. In a developed country, if you want to buy a toilet you can just go to the shop.

However, it is not so simple in Cambodia, especially in rural areas. Our job is to work with local sanitation businesses to help them develop solutions that they can sell to Cambodian villagers. We work with suppliers, and we also work with local authorities, both in Cambodia and Vietnam.

What is the role of social entrepreneurship and how can it help solve Cambodia’s developmental problems?
Social entrepreneurship is very important, because broadly speaking, it is using a business approach to solve a social issue. In many countries you see civil society and the government working to tackle social issues. But that is not enough because there are many complex issues that the government cannot solve, especially when we consider the need for cost effectiveness.

Organisations that take donations and give them away are not cost effective. When we bring social entrepreneurship into the mix, it allows for the implementation of a number of cost effective solutions to solve various problems.

With WaterSHED, for example, we have been working to provide 150,000 latrines in Cambodia and spending much smaller amounts of money to do so than with a donation-based model. Cost effectiveness is a major advantage of this approach. I believe that a lot of other areas can better solve their problems by also using a business approach.

Are enough Cambodians looking to solve certain issues through social entrepreneurship?
I think getting recognition from Forbes can help inspire more Cambodians to use innovative approaches when thinking about social issues. This is an example for them to see that they can use a business approach, and not just in the private sector but also in the NGO sector.

For WaterSHED, when we first started this programme, people did not believe that we should use a business approach to solve the sanitation problem in Cambodia because they had never tried doing it this way. But after we started implementing these market-based solutions, we saw a big success. I believe that now we can be an example of how a business approach can be used to solve social issues.

Should more NGOs adopt this approach instead of aid-based initiatives?
We cannot say that one approach will solve everything and that we should stop giving away aid. In Cambodia, the poorest still need the support of NGOs, so we still need to have traditional aid-based programmes. We also need to combine that with social entrepreneurship.

At the same time, I think that entrepreneurship can be used more widely. People initially thought that rural Cambodians were too poor to buy their own toilets, but actually we’ve shown that they are able to buy them and that a business approach works even for very poor people.

Has Cambodia been too dependent on aid?
In the past several decades, Cambodia really needed the support of aid and international organisations. Now, I would say aid is still important, but we need to look at how we can use more modern and innovative approaches for distributing funding and aid. I think we need to work with the government to help reduce social entrepreneurship costs as well as get people to understand how important it can be for solving the country’s most important issues.

This interview has been edited for length and clarity

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