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Who's in the Video
Mr. Landau is the Chairman of MAP International.  He is an entrepreneur who has built a portfolio of ventures in real estate, mortgage banking, information and communication technologies, and advanced[…]

The private sector can help with development aid.

Question:Does private business have an advantage over governments and NGOs?

Michael Landau: I don’t want to say that there’s an advantage of one over another but, you know, we are pure private sector. It’s not to say that we’re not willing, now that we have a proven product, that we’re not willing to take grants to be able to show how we can replicate our product in other places or develop new opportunities from within the platform that we’ve done. But if we would have been waiting to get a grant, most grant givers don’t want to give grants just for an idea. They would like to see, okay, something real. So it becomes a major chicken and egg situation. We saw good business opportunity for ourselves by being able to partner with the government by providing them with a solution. We saw a business model how we would be able to make a good return on our investment.  And we just plowed ahead. We felt that by waiting for grants would just be, it’s not what we’re about. 

We’re about creating, we’re entrepreneurs. We’re about creating, creating value, creating wealth for ourselves, creating an enabling environment where the governments can train and transform the lives of the people in that country, which is a phenomenal double bottom line. You know, people talk about double bottom line, triple bottom line, shared value, or corporate social responsibility but, first, to have the ability to work with governments and change the lives of people, have a good business model where we can make money.  That’s what drives us in order to go out and do what we do.           

Question: Has large-scale development aid hurt Africa? 

Michael Landau: My personal view is that there are certain amounts of aid which is required because, otherwise, people will just die if they don’t get, you know, the physical, the physical aid itself. Has just been giving cash a good, has that been a successful system? Absolutely not because the majority of the money does not end up going to the people that need it because of the corruption, the fraud, and the theft, you know, because that goes on, you know, kind of within the system.  And also, I think, that the people who are, you know, kind of who are accountable to be delivering a lot of the products, you know, kind of don’t have the same sort of accountability. I’m a major proponent of the public-private partnership. The idea that the private sector, we have skin in the game. We have kind of accountability to our capital to ensure that kind of the projects we work are going to be successful. We’re also long-term thinkers.  We’re not looking at a return, where this is, again, one other distinction, looking to insult the people who use the grant money but, you know, the people who look into working on the grant and say, okay, we got a grant for a million dollars, you know, let’s use the million dollars. We say, okay, we have an investment of a million dollars, how can we ensure a return to maximize our return over the next 10 years, over the next 20 years. So the private sector is going to ensure the long-term sustainability of many of the projects that the aid money has been set up to fix. 

Question: Should the private sector manage public development aid? 

Michael Landau: Now, there are certain aspects that the private sector can have involvement in, certain sectors that is going to be more difficult for the private sector to have involvement in. But the way we’re setting up our operation is that there are certain areas which are core to our business, which are the banking products. And that’s how we make our money. But, because we’re working, we’re leveraging identification, once we have an identification, a biometric identification on an individual, that identification can be used for multiple products. 

So it can be used for creating a health registry, can be used for creating the election commission, can be used for national ID, can be used for lots of other purposes. Some of which we can make money on. Some of which we can’t, but the more of those products that we can offer the government, the more productive we are and the more beneficial we are to the government and, ultimately, the more money we can then make on the products that we actually sell. So in that way, in terms of healthcare and education and being able to deliver healthcare and educational products and videos or games for kids or, whether it’s distributing nutrition information of how people should eat and distributing it over the mobile phone or creating health registries, some of them will make money, some of them won’t. But the fact that, as an overall holistic package, we are in a position to make more money on our financial products. That’s an incentive for us to be able to offer these other products and to offer the health and the healthcare registrations and to offer many of these other solutions that these governments desperately need. And being that they will be part of an integrated agreement with the governments, it enables the World Bank, who currently, let’s say in a particular country, will give out a lot of money to people who need it in rural areas. There’s no accountability for the money as it goes and travels through the process. Our system will create transparency and accountability for the money.  People will know, now, where the money went. 

Question: Can you give us an example? 

Michael Landau: You know, you take emergency situations. You have a disaster and a refugee disaster and you have, you know, 200,000 people who immediately need to get money or immediately need to get food. Well, we can now create an accountable system that the World Food Programme or UNICEF for helping the kids or whatever it is that the people who are receiving the aid now get identified and now get a card that will enable them to ensure that they personally get the money that they suppose to get or they get the bottle of water or the bottle of oil or the bag of rice that they’re suppose to get. And now, there’s accountability kind of in the process. There’s never been accountability or very little accountability both to the terms of the people distributing the money and to the people receiving the aid or the money, whatever, whatever the case may be. Solutions like ours, and, obviously, I’m looking to be promoting the MAP solution, is a holistic solution that goes to the core of identifying the people and providing a distribution network for, whether it’s data and whether it’s financial data, health data, whether it’s voting data, our solution is there to be able to enable the governments to help them transform the lives of the people and bring them into the 21st century, provide protections for the people because the people exist once they are identified. 

Question: Do African governments want the private sector to manage development aid? 

Michael Landau: Yes, I’ve had many discussions with people whether it’s at the World Bank or the IFC or USAID, DFID, and, you know, have had the opportunity to speak to many presidents and prime ministers of countries. And all of them recognize that the old model needs to be adapted. Or a new model needs to be adopted and the old model adapted. There’s a challenge there because there isn’t as much money as was available so they clearly need to be thinking in terms of new models.  The concept of a PPP, of the Public Private Partnership, is something which is, it’s reasonably new in terms of being the new lexicon of the development world. 

There are still some people, some older bureaucrats who have this, I don’t know how to exactly how to describe it, I almost say it’s a fear or a loathing or a mistrust of the private sector, which definitely creates challenges in the world that we’re looking to play in because there are many obstructionists or old timers who have done things a certain way and they like things to continue to go in the same way. Because if money is going to be directed to the private sector to create the transformation that is required, the people who are currently responsible for giving out the grants or for receiving the grants, and there’s a bit of a revolving door, you know, kind of, sometimes in some of these organizations, they’re going to be quite threatened. Because, you know, whenever anything traditional is changed, there’s going to be a little bit of a threat to certain people. But I believe that the overall need to create sustainable models with limited amounts of money is going to create an environment where the private sector is going to be much, much more evolved.

In all of the agencies that we speak to today the forward thinking people are very, very much focused on how to integrate the private sector. But the private sector, we’re very transparent. We’re here to make money and we want to make money. And if we don’t make money, we’re not going to be able to provide our intellectual property, make our capital investment because the same systems that I’m using in developing for the developing world, for using, whether it’s the biometrics, the mobile banking, all these solutions would work very well in the United States, very well in Europe, for, there are many unbanked people in these environments and these countries. The largest banks in the world, you know, are looking to provide solutions for their credit card holders, how to integrate it with the mobile banking. So I could be spending my effort and working on convincing some of the largest banks here in America and around the world to work with us. But we’re focusing our effort in the developing world ‘cause we see a very good opportunity.

Recorded on: May 15, 2009