Iqbal Z. Quadir, founder of GrameenPhone, Bangladesh’ largest wireless telco, gave a presentation at the Pace University Pitch Contest, an event where aspiring entrepreneurs and social ventures contestants compete for $50,000 in prize money.

“Over the last thousand years or so, many kings and queens of England have played their part in betrayals, regicides, plots, treason, atrocities, and revolts…

There have been five pretenders to the crown, two of them impostors. Four kings have been forcibly deposed. All were subsequently murdered. One of them was publicly executed.”

- Brenda Ralph Lewis. Kings & Queens of England. Barnes and Noble Press. 2003.

The point of this quote is that even England had some crazy shit going on in its past, yet it still somehow became a modern, first world nation where the majority of the population live in relative peace and prosperity.

If a country with a history of crazy despots can make it, there is hope for countries such as Bangladesh, Somalia and Guatemala to pull themselves out of poverty.

In England, commerce and innovations, combined with a shortage of government funds, gave rise to empowerment and a devolution of authority.

Quadir argues that devolution of authorities coincides with empowerment of citizens.

“The history of liberty is a history of the limitation of governmental power, not the increase of it.”
- Woodrow Wilson, Address to the New York Press Club New York City | September 9, 1912

With organizations like the World Bank, funds to government empowered authorities, not citizens. This is the wrong approach.

Quadir made a great point. Poor people in Bangledesh and rich people in the US all have 24 hours in a day. But poor people waste a lot of time. For example, in the US we take for granted the ability to make a phone call to make sure the person we need to see is there. In Bangledesh, someone might walk 3 miles because they have no phone and no car, only to find out the store is closed, a waste of 4 hours.

This was the idea behind GrameenPhone. Create a company that creates thousands of local entrepreneurs who can provide a service (time share on a cell phone) that makes people more efficient. And that company produces taxable revenue, which can be used by the government to further its agenda.

Governments become responsive to citizens when citizens make economic contributions to governments. Entrepreneurs create jobs, products and services and economically empower citizens. And strong business provides tax revenue to governments.

So if instead of making billion dollar loans to governments, the World Bank and other NGO’s and Governments help create sustainable businesses, those businesses keep the government in check.

Faulty Assumptions vs. Reality

  • Governments need to provide economically-viable services. Private companies can provide them.
  • Governments must subsidize companies to serve the poor. Companies pay taxes to governments.
  • Poor countries need aid. Businesses raise resources far more than aid.
  • Rich countries either help or exploit poor countries. Both rich and poor countries gain by making people more productive.
  • Poor people are recipients. They are a resource.
  • Services cost too much for the poor. Their involvement reduces costs.
  • The uneducated poor can’t do much. They are eager learners and capable survivors.

About the Speaker

Iqbal Z. Quadir, Professor of the Practice of Development and Entrepreneurship, MIT and Founder and Director, The Legatum Center, MIT

Professor Iqbal Z. Quadir is the founder and director of the Legatum Center for Development and Entrepreneurship at MIT. In the 1990s, Quadir founded GrameenPhone, which provides effective telephone access throughout Bangladesh.

Quadir is an accomplished entrepreneur who writes about the critical roles of entrepreneurship and innovations in improving the economic and political conditions in low-income countries. Quadir is often credited as having been the earliest observer of the potential for mobile phones to transform low-income countries. His work has been recognized by leaders and organizations worldwide as a new and successful approach to sustainable poverty alleviation.

For four years, Quadir taught at the John F. Kennedy School of Government at Harvard University, focusing on the impact of technologies in the politics and economics of developing countries. In 2005, he moved to MIT. His particular research interest is in the democratizing effects of technologies in developing countries with some of his initial thoughts published in the Summer/Fall 2002 issue of The Fletcher Forum of World Affairs.

In 2006, Quadir co-founded the journal Innovations, published by MIT Press, which highlights private efforts in public service. Quadir spent most of the 1990s founding and building GrameenPhone Ltd., which has now become Bangladesh’s largest telephone company, with net income of $250 million in 2006. His childhood exposure to the conditions in rural Bangladesh combined with his later venture capital experience in New York led Quadir to recognize that the ensuing digital revolution could facilitate the introduction of telephony to 100 million people living in rural Bangladesh. In 1994, he formally launched this effort by convincing angel investors to establish a New York based company, Gonofone Development Corp (meaning “phones for the masses”) to help him organize what subsequently became known as GrameenPhone.

Quadir’s vision of a large-scale, commercial project that could serve all urban areas and 68,000 villages in Bangladesh led him to organize a global consortium including Telenor AS, the primary telephone company in Norway and an affiliate of micro-credit pioneer Grameen Bank in Bangladesh. He attracted these investors by complementing his vision with a practical distribution scheme whereby small entrepreneurs, backed by loans from Grameen Bank, could retail telephone services to their surrounding communities. With the support of these investors, GrameenPhone, established in late 1996, started building a new cellular network and providing services to the public soon thereafter. To date, it has built the largest cellular network in the country with investments of nearly $2 billion and a subscriber base of nearly 20 million. Its rural program is already available in more than 60,000 villages, providing telephone access to more than 100 million people, while helping to create 250,000 micro-entrepreneurs in these villages.

Quadir appeared on CBC, CNN and PBS and was profiled in feature articles in The Economist, Boston Globe, Financial Times and The New York Times, and in several books. The World Economic Forum, based in Geneva, Switzerland, selected him as a “Global Leader for Tomorrow.” In 2006, Quadir was awarded the prestigious Science, Education and Economic Development (SEED) award in Bangladesh. In spring 2007, Wharton Alumni Magazine selected Quadir for its list of 125 Influential People and Ideas on the occasion of the 125-year celebration of the Wharton School. His work is referred to in 20 books and is prominently featured in the 2007 book, You Can Hear Me Now, by Nicholas Sullivan (Jossey-Bass).

Earlier in his career, Quadir served as a vice president of Atrium Capital Corp., an associate of Security Pacific Merchant Bank, both in New York, and a consultant to the World Bank in Washington DC. He received an MBA and an MA from the Wharton School, University of Pennsylvania, and a BS with honors from Swarthmore College.