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A partnership between the Center for International Business Education (CIBE) and MID, a Michigan-based NGO, has created opportunities for U-M students to make a direct impact on health care and working conditions in Bangladesh‘s garment industry. Bradley Farnsworth is the director of CIBE.
Michigan International Development (MID) was founded by Andy Crawford, a 1964 graduate of the College of Engineering. Andy was a successful executive and entrepreneur, founding his own company, Ascott Corporation, in 1975. Ascott eventually focused on custom-imprinted garments, especially t-shirts. As his career developed, Andy spent an increasing amount of time teaching and mentoring students at the U-M, and in 1987 he developed a course on entrepreneurship in the College of Engineering that he continued to teach until his death in 2001. More than 1,000 students took his course over 15 years.
Andy became interested in health care policy in 1993, when his wife, Karen, was diagnosed with cancer. He worked with faculty in the School of Nursing to develop an interactive decision-support model to help newly diagnosed cancer patients make treatment choices. In 1996, Andy was diagnosed with a rare blood disease, and he began to study ways to improve the quality of life for patients with chronic disease. As his illness progressed, he became increasingly concerned over the amount of money spent on end-of-life treatment. When an expensive bone marrow transplant offered only a very small chance to cure his disease, Andy decided to donate personal funds equal to the cost of the transplant to a project that would improve health care in third world countries. He and other members of the Crawford family founded MID with the goal of providing on-site health care to workers in garment factories in Dhaka, Bangladesh, choosing the location because of its particularly acute health care problems and because of Andy‘s longstanding connections to the garment industry. His estimate was that the cost of a bone marrow transplant would fund one year of medical care for ten thousand people. Andy's disease eventually progressed to leukemia and he passed away in October 2001 at the age of 59.
Worker Health and the Globalization Debate
Most economists explain low labor standards in developing countries as the result of low labor productivity. If firms based in developing countries were to raise labor standards by providing additional benefits to their workers, the resulting increase in labor costs should lead to higher prices, making these firms less competitive in world markets. But if improvements in labor standards also lead to higher labor productivity, the improvements should pay for themselves. Could this be the case with health care, since improvements can lead to lower absenteeism, lower turnover, better cognitive skills and higher energy levels? But if this is true, then why haven‘t garment factory managers undertaken these reforms on their own, without intervention from NGOs like MID?
A major factor affecting the Bangladeshi garment industry has been the dismantling of an international trade system that has protected the industry for decades. The old system created national quotas for exporting garments and textiles to rich countries, virtually guaranteeing that all production up to the quota would be sold. The system had no incentives for factory owners to improve labor productivity, however, since these gains could not be realized through increased export sales and bigger profits. With the discarding of the old regime, factories in Bangladesh are about to compete for the first time against developing countries with higher labor productivity in their garment industries, especially China and India. Factory managers in Bangladesh are keenly interested in any projects that can help them meet this challenge.
Bangladeshi factory owners are also concerned that their customers—major rich-country retailers and their intermediaries—are increasingly making their buying decisions based on factory working conditions, particularly looking at the issues of child labor, worker safety, and forced overtime. Increased spending on worker health may be good public relations as well as a smart investment in worker productivity.
As both an entrepreneur and a philanthropist, Andy Crawford was keenly aware of the sustainability problem in development projects, stipulating from the beginning that MID had to design its projects to be self-sustaining over the long term. The proposal to factory owners is that MID fund the start-up costs for in-factory health clinics, but that once the system has been fully implemented—and demonstrated an impact on worker health and productivity—the costs of the clinics will be assumed by the factories. The proposition has already attracted a number of factory owners, and MID is on schedule toward its target of serving 15,000 workers by mid-2003.
The Role of U-M Students
Andy‘s son, with the help of other family members, has taken over the leadership of MID. Continuing Andy‘s commitment to providing U-M students with practical, real-world experience, a generous gift to CIBE supports student projects associated with MID. For over a decade, CIBE has developed and funded internships for professional school students from business, law, public policy, engineering, public health, education and environmental studies. In the summer of 2002, these funds supported five U-M students who undertook several projects in Bangladesh. The students are Henry Lin (MBA), Jie Chen (BBA), Senkuta Gebeyehu (MPH), Richa Mittal (MPH) and Adam Martin (BS, engineering). They worked in five areas.
health care research
The two MPH students worked under the supervision of Siobán Harlow, associate professor of public health and II associate director, to study the health of female workers, who make up 80 percent of the worker population in garment factories. Because of the need to link health and worker productivity, their research focused on work-related health issues and diseases, particularly anemia and musculo-skeletal complaints. Their work involved interviews with over 400 workers and compiling this information into a patient database. Both students also worked to develop a medical record system and a program evaluation protocol, which will enable local personnel to measure the success of the new health care system. Because these two students arrived in Bangladesh at about the time the first in-factory clinic opened, they also became involved in the startup phase of the operation, designing record systems, forms, purchasing supplies and equipment and setting up office systems.
Their research results have already had an impact. Their study found that 12.7 percent of the women surveyed were severely anemic and that overall nearly 28 percent had anemia to some degree. Anemia has a direct affect on productivity, particularly impairing energy and cognitive abilities. Iron deficiency has already been widely documented among workers in developing countries, and it is easily treatable with iron supplements that can be dispensed without the need of a health care clinic. Nevertheless, the research finding was important because it demonstrated to factory owners that there was a strong link between their workers‘ health and labor productivity.
The capacity to store and retrieve patient information is essential to MID, not only for the immediate purpose of treating and referring patients, but also to support the claim that MID‘s intervention is improving the health of garment factory workers. Because of concerns over the reliability and confidentiality of patient databases in Bangladesh, U-M students designed an information management system that will allow health care workers in Bangladesh to input data from personal computers that are directly linked via the internet to servers at the U-M Business School.
The business school students were assigned the task of developing materials for marketing the MID project to local factory owners in Bangladesh. They created a Powerpoint presentation that showed how MID could help factory owners meet the challenge of increased international competition and respond to pressure from developed-country buyers for improved working conditions.
The business school students also studied ways to mitigate the effects of corruption on MID programs. One of the most corrupt countries in the world, Bangladesh creates unique and challenging problems for any NGO working there. MID-Michigan established a local NGO subsidiary, MID-Bangladesh, with responsibility for selecting, funding and monitoring other local NGOs that are implementing the new health care system. Large NGOs, including the US Agency for International Development (USAID), have developed sophisticated and expensive systems for auditing and tracking their grant funds, with most of the these costs absorbed by the grant recipient. The result is that smaller NGOs, who may be able to offer some of the more innovative and creative solutions to Bangladesh‘s social and economic problems, are often not competitive for international aid funding. The business school team worked specifically on this problem, interviewing government officials, NGO executives and foreign aid workers as a first step toward designing an effective accounting and control system that would be manageable for smaller NGOs.
U-M Engineering Students Working From Ann Arbor
Advised by Larry Seiford, professor and chair of the Industrial and Operations Engineering Department, the group continues to make ongoing contributions to MID throughout the academic year, including information management support, library research, web site development and public relations.
CIBE‘s affiliation with MID is part of its initiative on corporate social responsibility (CSR) in a global context. CSR will continue to be the programmatic focus during CIBE‘s current grant cycle, which runs through 2006. The CSR initiative will eventually have multiple components, including additional student projects, curriculum innovation, faculty research, executive training and public programming. For more information on CIBE, see its web site at www.umich.edu/~cibe.
U-M students are working on a number of new and continuing projects for MID, including the design and implementation of metrics to document the effects of improved health care on labor productivity, continued research on worker health and treatment, health education and continuing the design and implementation of accounting and control systems. The development of student projects for the summer of 2003 is already underway.