This is the story of how and why PSI Myanmar set up two enterprises and went from being one of the biggest NGOs in the country with 1000+ staff to a lean branch office of fewer than 100 employees. The new entities were Sun Community Health, a network of 1,300 private health clinics, and Lan Pya Kyel, which operates a network of clinics for HIV prevention and treatment.
This was not a first for PSI. Over the last 30 years, PSI has successfully set up a dozen enterprises in different countries (some of them have gone on to partner with or even directly compete with PSI). Each deconsolidation effort comes with a unique set of challenges but the COVID-19 pandemic and the political turmoil in Myanmar made an already difficult job much harder.
But let us start from the beginning.
Founded in 1995, PSI Myanmar initially focused on HIV prevention and quickly expanded to sexual and reproductive health, tuberculosis, malaria, pneumonia, diarrhea, cervical cancer, and other health areas. By 2019, PSI had 8 project offices throughout the country and operated in almost all of Myanmar’s townships.
As a first step in the localization process, 5 years ago PSI Myanmar transitioned into four nimble, quasi-independent business units, each with a Burmese National Director and local board / governance structures:
- Sun Quality Health Network – a network of 1300 franchised private community clinics spread throughout Myanmar, primarily in urban and peri-urban areas.
- Community Health Services Network: Over 5,000 providers are working in peri-urban and rural areas that are at risk for malaria, while also working to help their neighbors on reproductive health, tuberculosis, and diarrhea.
- Targeted Outreach Program Network (now known as Lan Pya Kyel) – a network of 14 clinics providing HIV and TB diagnosis and treatment to men-who-have-sex-with-men, transgender populations, and female sex workers.
- Social Business Unit – works with a network of over 30,000 commercial outlets (like wholesalers, retailers, pharmacies, groceries etc.) to distribute reproductive health, HIV, malaria, and diarrhea prevention products throughout the country.
Eventually, given the legal, administrative, and funding challenges facing INGOs in Myanmar, Lan Pya Kyel and Sun Community Health (which combined the Sun Quality Health Network and the Community Health Services Network) were deconsolidated. PSI retained a much smaller branch office to continue offering select programming in-line with PSI’s global strategy.
“IT ENDED UP BEING A WELL-TIMED AGENDA”
Michael Chommie, PSI Myanmar, Country Representative
The work of setting up Sun Community Health and Lan Pya Kyel as independent entities began three years ago and was the cornerstone of my scope of work when I became the Country Representative for Myanmar in 2019.
While we had the encouragement of our stakeholders throughout the process, our drivers were largely internal. When the process began, PSI had been operational in Myanmar for nearly 25 years and, given global trends and the evolution of funding instruments, deconsolidation was the logical next step. It turned out to be a well-timed agenda too, as many INGOs in Myanmar are still far too dependent on expatriate staff, with most of these individuals unable to secure work visas or even enter the country.
During my tenure, we also gradually reduced the number of expatriate positions from eight (out of 1000+ staff), down to just me by the beginning of 2021. I am pleased to report that I will be handing over to a Burmese Country Director in just a couple of months!
The deconsolidation process was not without its challenges:
- The pandemic and simultaneous political crisis in the country made adhering to the original timeframes extremely challenging. We had to postpone the deconsolidation date for the Sun Community Health NGO three times last year as a result. We were also unable to properly publicize our localization successes due to the political sensitivities.
- It was also difficult to convey the myriad intricacies involved in the deconsolidation process to the entire staff. Feedback suggested there was a lot of anxiety shown by many staff. We had nearly 1,000 employees scattered throughout the country and virtual Town Hall meetings were infrequent (along with poor connectivity and language issues). One variable I had personally failed to consider was the number of staff transitioning to the two new entities who felt they were losing their affiliation with PSI/Global. We will need to redouble our inclusion efforts.
- Another challenge revolved around our efforts to facilitate an equitable distribution of assets. We should have put more time and thought into this instead of leaving this till the end.
My advice to other NGOs who are pursuing a deconsolidation process:
- The Myanmar platform had a five-year localization schedule. Stakeholders elsewhere should build in similar generous transition timelines.
- We formed an excellent steering committee comprised of staff from both the country and global offices. I highly recommend including more levels of staff on this committee. It would offer deeper perspectives and can go a long way in lessening the anxiety of staff. I also wish I would have spent more time talking to colleagues elsewhere in the world, to identify the common traits of a successful deconsolidation process.
Localization is key to ushering the good work of INGOs into more viable, contemporary structures. INGOs have operated for far too long under a neo-colonial framework, and it gives me a great deal of satisfaction to work with PSI in this transformation.
“THE MINISTRY OF HEALTH AND LOCAL AUTHORITIES ARE MORE OPEN TO WORKING WITH A LOCAL ENTITY”
Han Win Htat, Executive Director, Sun Community Health
PSI’s Sun Quality Health Network (a network of 1300 franchised private community clinics) established in 2001, and its Community Health Services Network (over 5,000 providers are working in peri-urban and rural areas on malaria, TB, reproductive health, diarrhea) established in 2008, have transitioned to a single National NGO named Sun Community Health. SCH was fully deconsolidated from PSI by January 1, 2022.
Localization ensures our work is better aligned to country priorities, community health needs and consumer insights. It also means that we are building our own capacity and local people are serving their communities.
The deconsolidation of Sun Community Health is advantageous in many ways. The Ministry of Health as well as state and regional authorities are more forthcoming and interested in working with a local organization. As a local entity we also face less bureaucracy and paperwork during program implementation. When it comes to working with donors, we have a lower fee structure. Many donors are also explicitly supporting the localization agenda through their funding mechanisms.
Deconsolidation also presents significant challenges:
- Donors and primes tend to be risk-averse and have rigorous compliance measures in place, which are often costly and difficult to adhere to for a nascent enterprise working in a fluid political climate. We needed to have several rounds of discussions and negotiations to modify expectations.
- There is still confusion about the role and scope of PSI Myanmar and its affiliate organizations. We would have benefited from clearer, more detailed, and more frequent communications with staff and external stakeholders about the spin-off and the roadmap for longer-term partnership.
- Sun Community Health has a large network of clinics that requires sustained funding, and this is particularly difficult in the current political climate. We had to work on partnerships and join consortiums to secure funding.
As a newly independent entity, we would welcome more sustained knowledge-sharing and capacity building from PSI as well as more communications around funding opportunities.
At SCH, we envision a future for Myanmar where every family has the power, opportunity, and ability to access the healthcare when they need without financial burden. To drive this vision, I would like to see SCH as a stronger, well-governed organization supported by a solid financial foundation, and strong systems, controls, and other core administrative competencies to ensure the implementation of cost-effective, relevant programs grounded in evidence and need based.
“CAPACITY BUILDING IS A MAJOR CHALLENGE FOR US”
Dr. Khin Swe Swe, Executive Director of Lan Pya Kyel
Lan Pya Kyel (LPK) offers HIV-related health care services, diagnosis, prevention, and treatment for “key populations” who face higher rates of HIV and AIDS – female sex workers, gay and transgender populations. LPK operates 12 Key Population Service Centers across Myanmar. Established in 2005 by PSI Myanmar, LPK became a fully independent local entity in 2021 to provide HIV prevention, care and treatment services and TB diagnosis and treatment from providers and government community clinics. As prime partner, PSI provides monitoring and supervision of project activities and donor reporting to LPK.
LPK operates as a fully independent local entity to receive direct social contracts or strategic purchasing of primary healthcare services from the private providers and community clinics by the government. In addition, being a local community-based organization simplifies our administrative procedures and opens opportunities for additional types of donor funding.
Capacity building is a major challenge for us. Even though PSI supported and provided capacity building for the staff, LPK still faces challenges in some areas, for instance finance and grant management.
I am enjoying the challenges of being an Executive Director, especially since the organization has newly transitioned into a community-based organization. I want to apply my technical and program management expertise to enable LPK to provide better quality of care to the community by harnessing the strength from the community. Moreover, I would like to prepare LPK not only as an implementer but also as a technical assistance leader for a key population led business.