BY PHIL LOPEZ
Phil Lopez is a second-year MA student in the International Development program. He spent his summer internship with Schulze Global Investments, a private equity and venture capital firm, in Ulaanbaatar, Mongolia.
The IDEV Summer Internship Series highlights the experiences of IDEV students participating in internships this past summer. Each year, IDEV students intern with various development organizations around the world. These internships are generously funded by SAIS donors, and offer valuable opportunities for students to gain real-world experience between their first and second years at SAIS. Phil's internship with Schulze Global Investments was sponsored by Bernard L. Schwartz.
As an IDEV student, the aspect of development that excites me the most is the potential contribution of the private sector and foreign direct investment (or FDI). That’s why I jumped at the opportunity to intern at Schulze Global Investments, a private equity firm focused on frontier markets, in its Mongolia office. Prior to coming to SAIS, I had worked several years in Vietnam, which greatly influenced my expectations for Mongolia. As it turned out, however, Mongolia is a singular country unlike any I had ever been to, with a fascinating economic and social landscape, and where the private sector is playing a major role in the development process.
A startling difference between Mongolia and other counties I have visited is the population size. Compared to Vietnam, for example, Mongolia is nearly 4.7 times larger in area, but the population is only about 1/30th the size. What struck me the most about Mongolia, however, and gave me the most to think about with regards to my internship and SAIS studies, is the country’s population distribution. Nearly half of Mongolia’s citizens reside in the capital, Ulaanbaatar (UB), which means that outside of the city, people, enterprises, services, and opportunities are limited. Indeed, the divide between urban and rural communities is stark. In my second week, I partook in a homestay with a nomadic herding family. Even though they lived just a few hours outside of UB, the family lived in a traditional ger (a nomadic tent house) and did not have access to electricity, running water, or the internet.
During my internship, Mongolia negotiated a financial bailout with the IMF and the country underwent two presidential elections. Given the political and financial tumult the country is experiencing, to achieve economic development for the rural and urban population alike, the private sector must play a vital role. As an intern at Schulze Global, I saw firsthand how our private equity fund was delivering real and measurable economic development through our investments. In one example, we worked on funding a company involved in delivering solar panels and solar-powered accessories to nomadic families. Access to electricity, refrigeration, and television is drastically changing the lives of some of the most rural citizens of Mongolia, and these services are being delivered via the private sector. In another example, one of our portfolio companies was involved in automotive parts distribution and had a nationwide network of re-sellers. While the company is interested in obtaining profits from these markets, they are helping to provide a service and supplies throughout the country, allowing development in both rural and urban communities to progress.
Even in the capital, private-sector investments are making a visible difference. I worked on investments that improved and expanded local universities, brought green spaces to the ger districts surrounding the city, and that will potentially change the UB skyline.
The biggest takeaway I received from this internship is that, while private equity firms and the private sector are not charities, that does not mean they are amoral. They can make a real contribution to the development of lower-income countries. Connecting investors and funds with businesses in need is a way to connect two parties in a symbiotic relationship that can drive economic growth and improve lives.
Below, the author at work and enjoying his travels in Mongolia.