Matthew Bohn: From doing business to doing good

Matthew Bohn, resident country director in the Philippines of the Millennium Challenge Corp. and Manila 40 under 40 awardee. Photo by: Devex

For Matthew Bohn, it takes a common set of skills to succeed whether in the private sector or in the global development field. It’s the motivations of people that set these two fields apart.

Bohn is the Millennium Challenge Corp.’s resident country director in the Philippines. His career with MCC started in July 2004, six months after the agency was born and nine years of working in the private sector as an entrepreneur, management consultant and private equity investment professional.

Bohn is one of today’s most influential development leaders aged 40 and under in Manila.

Devex is recognizing 40 of these young Metro Manila-based trailblazers in international development. They are social entrepreneurs, government leaders, development consultants, business innovators, advocates, development researchers, nonprofit executives and journalists.

We asked Bohn about his leadership and thoughts on development cooperation in the Philippines. Here’s what he said:

You spent nine years in the private sector before joining MCC in 2004. How have you been able to translate your private sector experience into your development work?

Having spent half my career in the private sector and half in international development, I’ve come to realize that successful development workers and private sector professionals possess a common set of skills with slightly different motivations. Whether you are investing in or building a company or granting money to build a road or strengthen capacity of a local community, the approach requires analytical thinking, disciplined project management, sound financial oversight, and principle-based leadership. However, the objectives and desired outcomes of development work are often viewed through a slightly different lens. 

Let’s assume for a minute we are talking about the development category of poverty reduction through economic growth on which I focus at MCC. As an investment professional in the private sector, my due diligence was primarily focused on maximizing value and creating wealth for investors by evaluating a value proposition, market opportunity, and financial rate of return. At MCC, we also believe that a similar level of rigor and due diligence should be applied before approving a grant. However, rather than looking purely at a financial return accrued to the investor (or in our case, the donor), we calculate an economic rate of return which is a cost/benefit analysis that estimates the benefits accrued to beneficiaries, whose lives we hope to improve, in relation to the cost of implementing the project. Our goal is not to make money, but to ensure that the expected results justify the cost, income increases among the poor and private investment increases over time so benefits can be sustained. Furthermore, we analyze how benefits are distributed among the bottom earners of society.

I also believe that the execution of development work should be approached with the same level of discipline required in the private sector to ensure maximum impact. During implementation, we maintain focus on operational efficiency, cost control and results. It’s not just about “doing good,” but rather about doing enough good to justify the cost of capital.

In summary, the private sector focuses on maximizing value or profitability and creating wealth for investors and companies and economic development work is about enabling conditions for wealth to be created and helping a broader segment of a country’s population, particularly the poor, gain access to this wealth by participating in economic activities.

You can see the similarities in terms of skills requirement through a slightly different lens of motivation. I consider myself fortunate to have received private sector training before going into development and believe it makes me a more effective development worker and leader. Of course, those who choose a path of development work from the beginning can and should develop these skills in addition to their altruistic motivations.

The MCC has long emphasized its commitment to country ownership and partnership. How have you applied these principles as the agency’s resident country director in the Philippines?

One of the unique aspects of MCC’s model is that we expect program development and implementation to be country-led and owned. This means country partners identify their constraints to growth and poverty reduction, propose solutions, and then become responsible for implementing them. I think it’s critical for countries to lift themselves out of poverty instead of others trying to do it for them. 

When I landed in Manila in September 2010, all I had was a rolling briefcase and a legal agreement that outlined a $434 million development program. However, there was a strong commitment by the Philippine government and other stakeholders which was an important start. I recognized that this had to be a program funded by the American people but owned and implemented by the Filipino people. 

We quickly set up a Philippine organization (MCA-Philippines), staffed by talented and competitively hired Filipino professionals, to manage the day-to-day implementation of the compact program. This was complemented by technical resources competitively procured from the private sector as well as a close working relationship with MCC professionals in Manila and Washington, D.C. Finding the right people, building a strong and disciplined management unit in country, and looking for ways to utilize existing capacity within Philippine institutions ensures a partnership based on ownership and accountability rather than patronage and conditionality. MCA-Philippines staff hold themselves to high standards and are passionate about uplifting the lives of their fellow people. This pushes them every day to spend wisely and focus on maximizing value (or impact) for money in their activities.

In addition to the projects completed, which will improve the livelihoods of millions of Filipinos, this development process owned by our country partners will ensure sustainability of the results beyond our time here. Also, we hope the model can be replicated through strengthened country capacity to transparently and efficiently manage development funds. This should eventually reduce dependency on donors and create opportunities for the government and private sector to address constraints on their own.

You have lived in Manila since MCC signed its compact with the Philippines in 2010. How has the development community in the country evolved since? Do you get the sense that the Philippines might finally be turning the page on its development?

The development community has been consistently active for many years in the Philippines but not without concerns. When I arrived in 2010, a new administration had just taken office, elected on a platform of change and after a crescendo of concern regarding governance and corruption in the country. Since then, the development community has worked closely with the Philippine government, civil society and the private sector to support their efforts on job creation, inclusive economic growth, good governance, and improvements in the delivery of social services. 

There is positive momentum in the country with reported GDP growth in 2012 of 6.6 percent, a decline in corruption, and improved competitiveness. I see strong and committed leadership at the top and a continued effort and need to propagate this strength down throughout the country’s institutions. Broad-based job creation remains a challenge, but I believe the Philippines has turned a corner and there is renewed trust and confidence among the people, development community, private sector, and international community. 

As the country steers itself in the right direction on the development curve, the development community will continue to contribute to this positive momentum and I hope progress will be expanded and sustained over the long-term. The Philippines is a country full of opportunity and potential.

Read more about the Devex 40 Under 40 International Development Leaders in Manila.

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