Social Entrepreneurship: A Force for Political Stability

Arsal, a village on the border of Lebanon and Syria, hosts a sizeable Syrian refugee community that almost doubles Arsal’s population. The border town is highly underdeveloped, and vulnerable to arms trafficking and frequent violent incidents. Local schools, hospitals, and general infrastructure struggle to accommodate the fast-increasing population. Government services and private investors have all but disappeared.

So I was surprised to learn of Mohamed Ghiti’s entrepreneurial startup in Arsal through a training workshop with Nabad, a social entrepreneurship incubator in Lebanon. Mining is one of the few foundations of Arsal’s economy. Yet the quarries wreak havoc on Lebanon’s ecosystem, sending waste and dust directly into nearby rivers, which in turn heavily pollute Lebanon’s watershed. Mohamed, recognizing the destructive trend, proposed a win-win solution: He would retrieve the wastewater from the mines to make paint. Mohamed told us in the workshop that he plans to sell the paint to the community, as well as recruit and train young people to paint houses in the area.

Mohamed is one of the hundreds of innovative and passionate social entrepreneurs I have met as I travel throughout Tunisia, Yemen, Libya, Iraq, and Lebanon. These social change agents offer unconventional, yet effective approaches that tackle local issues related to the environment, water, education, agriculture, health, and human rights.

From my standpoint, the flourishing of social entrepreneurship (SE) seems to be an epiphenomenon of the Arab uprisings, which emboldened young creative minds in remote areas. Political oppression, lack of freedoms, and corrosive leadership were not the only seedlings of the Arab Spring. The movement also grew from chronic poverty, unemployment, and socio-economic inequities. These revolutions in the MENA region often expanded from provincial areas that were and still are suffering from persistent social and economic grievances.

In the aftermath, countries such as Tunisia, Yemen, Libya, Iraq, and Lebanon are going through a critical political transition. In this phase, political players home in on political reform and institution building, yet neglect marginalized populations in rural areas and suburbs. These areas in the periphery are left with weak public services, political instability, and escalation of socio-economic inequalities. They are in quite a pinch: They can rely on neither state nor non-state actors—in many instances, the latter organizations are too nascent to be effective, because previous regimes did not tolerate them and because they are too dependent on politically laced international funding—to respond to their imminent needs.

In a laudable twist, young entrepreneurs are acting as a countervailing force. The energy of the youth felt in the streets a few years ago is now channeling into the workforce. Zohra Bousnina, head of Department at the Institut Superieur de Gestion, observes: “It is impressive; we now see more and more people from rural areas creatively deal with citizens’ priority needs, and create employment opportunities during transitions when states are weak and unable to solve any of the imminent problems.” Marginalized citizens have aptly found that the only way for them to ease the pinch of severe economic pressures and serve the need for social services is by increasing opportunity, even in the absence of a public sector and, in some cases, consistent and reliable rule of law.

These grassroots movements of SE are not an alternative to the public services and responsibilities of a democratic government. Rather, they can act as the first application of glue that temporarily helps bind together society during an unstable political transition. Holger Kuhle of the Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) suggests, “Social innovations created by local citizens can provide governments with policy innovation in solving social and economic problems.” Once the political situation is more settled and secure, the innovative elements set in motion by entrepreneurs will prompt governments to realize their full sociopolitical capacity and create a reciprocal innovative system.

At Beyond Reform and Development (BRD), where I am managing partner, we see SE as a way to bridge the destabilizing and gaping chasm between the political elite and marginalized citizens. Based on our experience in Tunisia and Lebanon, I recommend a three-pronged approach:

1. Transform educational institutions into entrepreneurial spaces.
   
   Universities need to provide SE programs within formal education and via extra-curricular activities. In Tunisia and Lebanon, BRD has partnered with several academic institutions in designing and developing their SE curriculum—including the first SE Masters degree in the MENA region for Institut de Hautes Etudes Commerciales de Carthage (IHEC) in Tunisia and an SE graduate diploma for Université Saint Joseph (USJ) in Lebanon. These pioneering SE programs developed organically, reflecting the pressing need for social entrepreneurs. Slim Khalbous, director of IHEC remarked, “We believe it is our responsibility to prepare the new generation to engage with their communities and to re-establish economic justice and solidarity that localities lost during the last decades.” USJ was similarly driven: Maryse Joumaa, head of the Social Work department, told me, “The social sector in Lebanon will continue to suffer if civil society does not come up with social innovations and solve local problems that government is unequipped to solve.”
    
2. Build capacity of civil society actors to provide high-quality support for social entrepreneurs.
   
   Civil society organizations need to increase their focus on supporting SE initiatives. BRD has helped many to develop high-quality services for entrepreneurs, such as incubation, training, mentoring, consulting, and market research. In Tunisia, we assisted Institut Supérieur de Gestion in developing an SE hub; in Lebanon, we established the first SE incubator, Nabad (mentioned earlier). Through her work in similar projects, BRD SE expert Natalia Menhall reflected, “Amongst the most impactful and innovative non-governmental organizations are the ones that succeeded in migrating from donor-dependent nonprofit organizations to social enterprises. We see them creating job opportunities for widow women in Iraq, solving drinking water problems in rural areas in Lebanon, and giving local craftsman access to urban and international markets in Tunisia.” To energize local social innovation, we need to equip civil society organizations with adequate tools, techniques, and competencies.
    
3. Give social entrepreneurs access to financing mechanisms from start-up to growth phases.
   
   Access to capital may be one of the greatest challenges social entrepreneurs face, especially in remote areas. SE initiatives in these marginalized communities need alternative financing mechanisms such as crowdfunding, impact investments, or venture philanthropy funding. The need for funding is acute, and corporations have begun to react. The Lebanon Central Bank, for example, has pledged $400 million for start-ups and other stakeholders to build a “knowledge economy,” LBC Governor Riad Salameh announced in December at the Global Lebanese and Entrepreneur Summit.
   
   It boils down to this: Funding entrepreneurial initiatives is good business for corporations and governments alike. Companies that integrate corporate social responsibility programs increase leverage for social enterprises, equating to higher returns on investment. Moreover, when governments provide tax incentives for social enterprises, they motivate citizens to create sustainable solutions and, in turn, stability. Rania Bikhazi, head of the entrepreneurship program at the International Labor Organization, emphasizes that “government can play a facilitator role in addition to their regulatory role, supporting social enterprises from their startup to scale up phase.”

If we hope for a robust democratic future in the Middle East, then we have to find new ways to promote the budding examples of social entrepreneurship as a bridge to more secure and stable future. Social entrepreneurship is a stabilizing force in the wake of the Arab Spring and ensuing political vacuum. As I have seen in Tunisia and Lebanon, it reintegrates communities on the periphery—often hotbeds for violence—and gives them a stake in the new political landscape. As Mohamed did, social entrepreneurship not only paints a new coat on a system that is stonewashed and cracked, but also changes the foundation, giving sidelined communities a chance to prosper.

Read more stories by Gilbert Doumit.