DEVELOPMENT-BUSINESS: Top Swedish businessmen have set up entrepreneurial charities in South Africa

subscriber | 27 April, 2006

JOHANNESBURG. Two prominent Swedish businessmen have stepped into the limelight during the past month and made their new causes in Africa known through a string of newspaper interviews in Sweden.

First it was Percy Barnevik, former Chairman and CEO of ABB and possibly the most prominent among Swedish business executives, internationally - with a string of global directorships and advisory engagements to world leaders, among them South Africa´s President Thabo Mbeki, on his CV - who declared that his new life would centre around charitable causes.

More precisely the small Swedish charity Hand in Hand, where Barnevik has put in some SEK 20-30 million of his own money, but more importantly, he will drive the process personally to establish the organisation in South Africa. He say´s that he has the backing of Mbeki in that respect. The focus will mainly be on various education- and micro-finance schemes for people on the margins of the economy.

Then, just the other day, the turn came for entrepreneur Dan Olofsson, who´s among a new crop of Swedish IT-billionaires. Mr Olofsson has brought the Zulu king Goodwill Zwelethini onboard and the two are presently touring Sweden. The aim, including dining with the Swedish king Carl XVI Gustaf, is to raise money for a set of schools, the Star schools, a concept to help families struck by the HIV-aids pandemic in South Africa to get an income. Mr Olofsson has, correctly, observed that the only way that people in the area can change their situation is through education and training. He has already built a massive eco-friendly game lodge in South Africa´s KwaZulu-Natal for ZAR 150 million.

Both Barnevik and Olofsson are inviting their wider network of (very wealthy) businessmen to the party.

Olofsson already has a quite impressive lineup to support a string of projects he´s identified, including entrepreneur schemes, among them international clothing chain H&M´s owner Stefan Persson, the former Saab CEO Bengt Halse, as well as Sten K Jonsson from Midway, Mats Paulsson, CEO of construction company Peab and businessman Maths O Sundqvist.

They are jointly committing SEK 20 million to try and change the lives for poor communities in South Africa.

One can observe a change of mood as far as how businessmen are engaging themselves in charitable, “do good” causes. Before it was more of a corporate charity duty to have a small pet project as a show case, e.g. supporting a school in the vicinity of the Swedish subsidiary in Africa, or sponsoring NGO´s like SOS Childrens villages, the Red Cross or Save the Children.

Swedish businesses in Africa may have been relatively decent employers, with good social schemes in place, etc. But not that much has been done beyond that, e.g. they were not ahead of the local pack in introducing HIV-aids schemes among their employees.

Barnevik and Olofsson are multi millionaires and have their largest deals behind them, but they are not yet in retirement mood. They believe that they can apply their particular experience and intelligence to development causes.

There are others before them, like the discreet Swedish, London-based Rausing-family, one of Europes richest through the packaging giant Tetra Pak. The Rausings are donating large sums to various charities, including an educational charity in Uganda, Mvule Trust.

So what can this “new” crop of big businessmen bring to the party that hasn´t been done before?

For one they can cut red tape as they already have the money and they get easy access to the high and mighty.Fewer problems with bureaucrats.

And they can bring often desperately needed discipline, efficiency and economic sense to the development projects they are engaged in. Full of adrenaline and with short attention spans, the are not the types that are nodding off at board meetings or letting bad conduct and mismanagement go unpunished. In short they want to see quick results. Return on investment one might say.

It’s reasonable to ask what drives the likes of Mr Barnevik and Mr Olofsson, super-rich men who´ve made it, but are coming back for more of another kind. Why do they want to dirty their hands with development causes at this stage of their lives?

For one, they can afford it. Secondly, it’s the vanity factor and the hope that they will have something more to their names than success in business. If most of what they´ve done before was linked to their own or other peoples greed, they now want to show that they are men of substance.

At least in Percy Barnevik´s case it isn´t a straight forward conversion. He´s showed his interest for the long term future of this planet in various ways before.

Thirdly, it´s the urge to do something for people you´ve met at the coalface that are living under very dire circumstances.

“When one visit the villages, enters a hut and meets a family of seven orphans headed by a granny as the parents have died from aids, well, that is a an unspeakable disaster. Clearly one is touched by it and one want to do something”, explained Dan Olofsson to Swedish business daily Dagens Industri.

Barnevik espressed similar feelings after meeting poor people in Southern India, where he visited Hand in Hand projects.

Undoubtedly they have also seen that they can apply their particular skill and talent which is to plan, strategise, think big, use networks and therefore be able to raise the money to support their visions. In short, to get things done.

Mr Barnevik points out that for him it is not a matter of charity that he gives away approx SEK 2 million monthly to Hand in Hand. He has drawn up conventional profitability spreadsheets to make sure that his interventions are geared for growth.

”I am possessed with the idea that everything we do in the end must be to help people to help themselves. We invest in education and training – then the individuals must stand on their own and proceed without donors”, said Percy Barnevik in a recent interview.

Barnevik wants to see massive change. In India he claims that his organisation has already created work for 110 000 women in the Tamil Nadu state – the spin-off from these newly trained entrepreneurs, armed with start-up finance, will create 1.3 million jobs in Percy Barnevik´s model. In South Africa his aim is the same, to create 1.3 million new jobs within five years – that is more than the one million president Mbeki has promised his electorate.

And will it work? Development professionals are naturally skeptical when businessmen, deemed to have less understanding of and patience with complex social and political processes – which often tend to distort economic planning – are trying to fast-track things.

One thing is for sure, Barnevik and Olofsson got their timing right. South Africa is the place to be at this time in the country´s history. It has shaken off the worst of its apartheid past, it has managed to modernize its economy over the past ten years and if anything the country is on its way up.

And whatever the outcome is, the pair – independently from each other – may have established a new trend.

Africascan Comment
In Sweden development has traditionally been the domain of the Swedish State and of various NGO´s. For one, there have not been, still aren't , any tax brakes for charitable donations in Sweden. It would have to take the shape of a business, not an NGO, if one is looking for a tax break.

But then, many businessmen are living abroad. In the UK, where Mr Barnevik lives, there are clear benefits to donate money to charities.

Whatever the reason, it’s a good thing that top executives are engaging themselves in charitable causes. They are discovering that structural problems and the lack of opportunities, not lack of drive or intelligence, are blocking progress. Barnevik talks about “his” market being the hundreds of millions of landless and outcasts.

In the case of Percy Barnevik, who lost his position as Sweden´s most respected international businessman after a pension scandal, he seems to take on the world of development with the same kind of energy and drive as when he built ABB to become the worlds leading electrical engineering group. That he “invests” his own money and time simply adds credibility to his scheme.

May other big hitting role models with enthusiasm, experience and humility follow.