IBD in INDONESIA
by David Hall, MBA 2004
The rattan farmers of Indonesia have faced considerable challenges in sustaining both their livelihoods and social cohesion over the past 10 years. The influence of western society and capitalist economic models has not been entirely positive on the previously community based rattan farming societies. Rapid and sustained decline in the price of raw rattan compared to basic-needs items such as rice, soap and other foods has meant that farmers have had to turn to other sources of income such as logging and other crops that are far more harmful to the natural rain-forest environment.
The task of this IBD team was to work with an Indonesian NGO (SHK Kaltim) that helped the rattan farmers of East Kalimantan to plan a business that would help manage the relentless pace of change in their livelihoods and social structure. This project focused on developing a plan for a start-up rattan trading company that would be under community ownership and help farmers support their livelihoods by stabilising farm-gate prices for rattan and generate additional income from rattan trading.
The three-week experience began by flying into Balikpapan, an oil town in East Kalimantan (Borneo) and traveling by road to Samarinda, our base for the project. This was an eye opening experience as the road passed through what had been primary rainforest only 7 years ago and now looks like grassy savannah underlining the impact of de-forestation on the natural habitat.
The first week was spent working with our client to help define the objectives of the business and scope out the tasks for the remaining two weeks. This was a great experience as none of the team had worked in the non-profit sector before, let alone in a remote town and frequently using a translator to help communicate with some of the stakeholders in the business.
The second week was spent traveling up the river to the farming villages to see first hand what the processes involved in rattan farming were and what the impact of our work could be on the local communities. Rattan farming supports a whole set of local industries that are focused first on growing the palm and secondly processing the raw rattan by peeling off the thorny outer layers, washing the rattan to clean it, smoking the clean rattan in sulphur fumes to cure it and then leaving it out in the equatorial sun to dry. We met with farmers and processors to hear first hand what their needs were and what problems we had to consider in developing the business plan. This showed us first hand what life was like for a rattan farmer and was a very humbling experience.
The final week was spent back in Samarinda, working with our client to help develop a workable business plan after we’d experienced the working challenges that faced the start-up company. We considered all aspects of the company from marketing through operational management and logistics to developing financial forecasts of liquidity and solvency. Thinking in very non-traditional b-school terms stretched the team’s creativity in developing an actionable plan that the NGO could understand and implement when we’d left.
Overall, the project was an unforgettable experience that
all the members of the team found stimulating, challenging
and rewarding. We learnt a great deal about Kalimantan, the
rattan farmers and each other as well as how to be effective
in an unfamiliar and sometimes trying environment. This experience
is something that has greatly enriched our MBA education and
given half the chance, we’d do all over again!
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Last Updated on May 21, 2004
