Saturday, June 27, 2009

Military Business and Pakistan's Industrialization

There has been a great deal of criticism of Pakistani military's role in the industry and the economy of Pakistan since the release of Dr. Ayesha Siddiqa Agha's book "The Military Inc: Inside Pakistan's Military Economy" last year. The book describes in some detail the size and the activities of what Dr. Agha calls "MILBUS", the military business in Pakistan. MILBUS, according to the author, includes banks, insurance, cereals, fertilizer, cement, hospitals and clinics, radio and TV, schools, universities and institutes, etc.

In her strongest criticism of Pakistan's military, the author argues that Pakistani military is a giant which has strong political control, economic control, and a very dominant social presence; a military that has over 7% share of the GDP, which controls one-third of heavy manufacturing in the country, which controls 6-7% private sector assets. It has a huge economic presence. It is a constant story of uneven development, between different organizations and institutions.

While some commentators have challenged Dr. Agha's data and her allegations about the dominance of Pakistan's military in the country's business and economy, this post is designed to question why is it bad for Pakistan's military to play an important role in the nation's business.

To explore the possibility of the Pakistani military playing a much bigger positive role in rapid industrialization and globalization of Pakistani economy, let us take a look the role the Chinese People's Liberation Army (PLA) has played in China's phenomenal economic progress and its emergence as a new superpower in the last few decades.

China's PLA began its manufacturing role for the defense sector that picked up steam after the Sino-Soviet tensions during Mao's time. Manufacturing purely military products, such as arms, ammunition, as well as electronics, plastics and metals for military applications, these so-called "third-line" factories were built in remote mountain regions, far away from transportation routes and power sources. The factories bought supplies at subsidized costs from other factories, manufactured the weaponry and related products -- generally low-tech and low-quality -- and then sold them to the military at subsidized prices.

With the change of leadership after Mao's death in 1976, the new government encouraged the military plants to begin exploring civilian uses for their products and to engage in the broader liberalization of the economy. The most nimble managers were free to exploit new markets for their goods. During the early 1980s, the PLA's share of the national budget declined, spurring it to look to other sources for cash, especially hard currency. The higher organizational levels of the PLA created trading companies like China Xinxing, China Poly and China Songhai to take advantage of the opening of China's economy to the international market, according to British analyst Gary Busch.

They formed banks, holding companies and international trading companies like Everbright to market these goods worldwide. Now the PLA runs farms, factories, mines, hotels, paging and telephone companies and airlines, as well as major trading companies.

Busch says the number of military-run businesses exploded during the boom of the late 1980s. The "third line" factories opened branches in the coastal areas, earning increasingly higher profits from the manufacture and export of civilian goods. Even the lowest levels of the PLA set up production units. In fact the PLA had a largely captive audience of Chinese who had never really had the chance to acquire personal goods produced in China before. In addition to their international arms sales, their production of consumer goods for the domestic market soared.

Since the 1980s, many of the PLA companies have now become part of the global economy. According research done by David Welker for Multinational Monitor, in pursuit of hard currency, many of the companies have listed themselves on capital markets in Hong Kong and elsewhere, opened representative offices in overseas markets, solicited foreign companies for joint ventures and partnerships in China and emphasized exports. The so-called red chips, companies listed on the Hong Kong exchange but which are in fact mainland Chinese firms, are the hottest stocks on the market. Hong Kong is the PLA's favored stock exchange because of its loose disclosure guidelines. China Poly Group has two listed companies: Continental Mariner Company Ltd. and Poly Investments Holdings Ltd. Both Continental Mariner and Poly Investments have a large number of subsidiary companies in mainland China, Hong Kong and tax havens like Liberia, the British Virgin Islands and Panama. China Carrie's listed company in Hong Kong is Hongkong Macau Holdings Ltd. China Carrie also owns HMH China Investments Ltd. on the Toronto Stock Exchange and HMH Gold Mining on the Australian Stock Exchange. 999 Enterprise Group, another company controlled by the PLA General Logistics Department, operates Sanjiu Pharmaceuticals Group, the largest pharmaceuticals manufacturer in China. 999 recently listed on the Hong Kong exchange.

Smaller military enterprises, like the Songliao Automobile Company owned by the PLA Shenyang Military Region, have also listed in the domestic Chinese markets.

China Poly Group is a commercial arm of the Chinese People's Liberation Army (PLA) General Staff Department. The PLA General Logistics Department operates China Xinxing. The PLA General Political Department owns and operates China Carrie. The Northern Army Group runs NORINCO and the PLA Navy runs China Songhai.

Some of these international Chinese companies with PLA connections are very rich and powerful. Some have entered into very controversial projects. A good example is the Hutchison-Whampoa, Hutchison Port Holding (HPH), according to Busch. HPH is a huge, multibillion-dollar company which has set up operations in ports all around the world. From Panama to the Philippines, an arm of Hutchison-Whampoa, Hutchison Port Holding (HPH), has become the world's largest seaport operator, embedding itself in strategic seaports all across the globe. In fact now Hutchison holds the exclusive contract to operate the Panama Canal.

Hutchison-Whampoa has spread everywhere. It has a base in Tanzania where it runs Tanzania International Terminal Services Ltd. In the Western Hemisphere it has seaport services in Buenos Aires, Argentina; Freeport, the Bahamas; Veracruz, Mexico; and at both ends of the Panama Canal. HPH's latest acquisition involved taking over eight Philippine ports. New ports in Mexico, Argentina, Saudi Arabia, Pakistan, Tanzania and Thailand make Hutchision-Whampoa the world's largest private port operator with 23 cargo berths, bringing its worldwide total of ports to a staggering 136.

Other ports include Jakarta, Indonesia; Karachi, Pakistan; India (where the company runs the cellular phone services); Burma; China; and Malaysia. There are port operations in Britain at Harwich, Felixstowe (Britain's largest port), and Thames port, and in the Netherlands at Rotterdam. The company is bidding to set up in South Korea's largest port, Pusan, and is already in Kwangyang, another South Korean port.

Retired PLA officers also continue to support China's transformation to a powerful first world economy by founding such companies as Huawei, the Chinese router giant challenging Cisco's dominance.

Since the early 1990s, there has been an ongoing effort to spin off the PLA's commercial enterprises into private companies managed by former PLA officers, and to reform military procurement from a system in which the PLA directly controls its sources of supply to a contracting system more akin to those of Western countries. The separation of the PLA from its commercial interests is now believed to be largely complete. But the stamp of the PLA influence continues on most large enterprises in the form of retired PLA personnel managing these businesses.

The Chinese have pursued liberalizing their economy without political liberalization, in the same way other East Asians did. Such a strategy has allowed them to pursue rapid economic growth while forcefully controlling chaos on the streets, as the PLA did at Tienanmen square in 1989. At the same time, the Chinese PLA businesses have sparked a great industrial revolution that has transformed the nation's economy, accelerated its human development, greatly enriched China and lifted hundreds of millions of people out of poverty. Just as it has in other East Asian nations, it can be expected that political liberalization and democracy will follow the rapid wave of industrialization and human development in China.

Even in the richest democracy like the United States, the military has played a significant role in funding research, development and manufacturing industries to support America's military-industrial complex and its space program. In spite of some of the well-deserved criticisms of the the world's biggest military-industrial and space complex in America, no one can deny that a lot of innovation and job creation and economic expansion has flowed from it for the American society at large.

India, another member of the emerging powers now called "BRIC", has failed to use a period of high economic growth to lift tens of millions of people out of poverty, falling far short of China’s record in protecting its population from the ravages of chronic hunger, United Nations officials said recently. Last year, British Development Minister Alexander contrasted the rapid growth in China with India's economic success - highlighting government figures that showed the number of poor people had dropped in the one-party communist state by 70% since 1990 but had risen in the world's biggest democracy by 5%.

Pakistan's record in alleviating poverty and increasing human development is not much better than India's. But Pakistani military has shown that it is capable of building and operating a wide variety of businesses profitably, ranging from heavy weapons manufacturing to industrial and consumer goods, construction and finance. The country now boasts a powerful industrial, technological and research base developing and manufacturing for its armed forces and exporting a wide variety of small and large weapons ranging from modern fighter jets, battle tanks, armored vehicles, frigates and submarines to unmanned aerial vehicles and high tech firearms and personal grenade launchers for urban combat. Comparing with the Chinese PLA, it is also clear that Pakistan's military currently has a very small footprint in industrial and economic development and globalization of the nation's economy. It is now recognized that without PLA's crucial role, it would have been very difficult for the Chinese to build the modern industrial base and attract massive foreign direct investments to become the factory of the world. It is also clear that, as a powerful and stable institution, Pakistani military can and should take inspiration from the PLA to play a much bigger role in Pakistan's economic development and rapid industrialization to help increase the nation's prosperity and lift millions out of poverty, as China's PLA has done.

Pakistan's military should take a leaf from the Chinese PLA playbook. It should do what is necessary to strengthen the nation's industry, economy and national security, regardless of any critics, including Ayesha Siddiqa Agha and her myriad fans. This is the best way forward to a well-educated, industrialized, prosperous and democratic Pakistan in the future.

Here's a video report about Pakistan's weapons development:

Related Links:

Chinese Military-Industrial Complex Goes Global

Chinese Military-Commercial Complex

Pakistan Industrialization Strategy 2007

Pakistan's Defense Production Goes High Tech

Dr. Ayesha Siddiqa Agha on Pakistan Military Inc.

Military Inc: A Deflective and Derogatory Book

Chuck Yeager on Pakistan Air Force

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Monday, June 22, 2009

Extreme Kayaking and Climbing on Karakoram

The high Karakorum mountains in Pakistan offer great adventures in mountain climbing and kayaking for those looking for high danger and extreme thrills at fairly low cost. Hunza valley with its steep and dramatic river falls on the Indus, in particular, offers some of the most challenging white water adventures in the world. While K2 mountain climbing expeditions are not uncommon, extreme kayaking in the area around K2 appears to be a fairly well-kept secret.

Writing for Jackson Kayak website recently, Kayaker Darin McQuoid said as follows: "In my short career of paddling, Pakistan wins the prize for the lowest cost of living once in country. Being a notoriously cheap kayaker, this motel on our fifteenth night was right up my alley at thirty cents per person. We never spent a night in a heated building while in Pakistan, so as an added bonus, it was nice and one warm."

Another extreme kayaker Ben Stookesberry, who is one of about half a dozen professional kayakers who tackle waterfalls above 100 feet, was reported by Wall Street Journal as saying he "views the fast-charging Lower Mesa Falls (in US) as preparation for even more ambitious drops on kayaking expeditions down uncharted rivers in Brazil, Chile and Pakistan.

On a recent expedition on the Indus in Pakistan, when Kayaker Bernhard Mauracher saw the massive wall of water in front of him it was already too late. He had planned to slip through a small gate in the huge rapids but underestimated the power of the roaring currents of the Indus river. A brief moment later he found himself captured in a swirl of foam and glacier water. The lion river showed its claws and wouldn't let Bernhard go. Like in a washing-machine paddler and kayaker were tumbled through masses of water. Bernhard decided to leave his kayak...a deadly risk in the floods of the Indus. Immediately, Bernhard was drawn downwards and everything turned dark. After a very long time, in a breathless silence, he made out a shimmer of light. The surface, the sunlight, life...

First descent in a kayak in the land of the highest mountains on earth around Karakorum. On 3 May,2007, the AKC expedition "Taming the lion II" came back from Pakistan, from the roof of the world to Germany. During the first two weeks of April, the whitewater kayak team led by Olaf Obsommer and Bernhard Mauracher mastered 30 km of first descents in one of the last unchallenged big canyons of the Himalaya - the Rondu Canyon of the Indus river. 30 km more remain untouched due to extremely fast rising water levels.

An expedition to the world's second highest peak, K2 in Pakistan, runs around $50,000 per climber. A trip to Everest has the steepest price at $65,000. Excluding gear and clothing, the cost estimates for K2 climb range from $15000 to $30,000. Individual climbers can easily spend $5,000 on equipment. The total Mt. Everest annual revenue runs into tens of millions of dollars and provides employment to several thousand people. 3,681 people have made the summit so far, but thousands more have tried. About 170 climbers have died in their attempts to reach the summit.

Kayakers in Pakistan can enjoy extreme kayaking at a tiny fraction of the cost of climbing Mount Everest or K2.

There have been many inspiring stories of great adventure, success and survival of climbers after storms and avalanches on K2, the story of Greg Mortenson stands out. In 1993, Mortenson, an American from the state of Montana, went to climb K2 in northern Pakistan. After more than 70 days on the mountain, Mortenson and three other climbers completed a life-saving rescue of a fifth climber that took more than 75 hours. After the rescue, he began his descent of the mountain and became weak and exhausted. Two local Balti porters took Mortenson to the nearest city, but he took a wrong turn along the way and ended up in Korphe, a small village, where the villagers took care of him and he recovered.

To pay the remote community back for their compassion, Mortenson said he would build a school for the village. After a frustrating time trying to raise money, Mortenson convinced Jean Hoerni, a Silicon Valley pioneer, to found the Central Asia Institute. A non-profit organization, CAI's mission is to promote education and literacy, especially for girls, in remote mountain regions of Pakistan and Afghanistan. Hoerni named Mortenson as CAI's first Executive Director. Reviewing Greg Mortenson's book "Three Cups of Tea: One Man's Mission to Promote Peace . . . One School at a Time", New York Times columnist Nicholas Kristoff argues "a lone Montanan (Mortenson) staying at the cheapest guest houses has done more to advance U.S. interests in the region than the entire military and foreign policy apparatus of the Bush administration". Kristoff quotes Greg Mortenson, an Army veteran, as saying “Schools are a much more effective bang for the buck than missiles or chasing some Taliban around the country".

While some international and Pakistani climbers, kayakers and tourists may be dissuaded by the extreme dangers of K2 climbing (or rather descending) or extreme kayaking or the fear of the Taliban, many more would be drawn to it for the very same reason. As the stories of the challenging mountain and white water rapids kayaking reach the worldwide audience, I expect much larger numbers to flock to it for the risks and thrills Pakistan's northern areas offer. With relatively modest investments for average tourists and serious climbers and kayakers facilities such as access roads, hotels, restaurants, guided tours, a climbing history museum, a climbing or kayaking skills school, mountaineering equipment and clothing stores, Pakistan tourism department can develop a strong revenue stream to create jobs, build schools and promote opportunities for the friendly natives in its picturesque northern areas.

Here's an excerpt from a recent Time Magazine article on Pakistan's tourism potential:

The truth is Pakistan could be — should be — an incredible tourist destination. It offers wonderful Mughal ruins, evocative British colonial architecture, world-class hiking and climbing in the Karakoram Mountains, gorgeous rolling green meadows, captivating culture, great food (especially the fruits and kebabs), and some of the best carpet shops in South Asia. Unfortunately, it is also regularly described as the world's most dangerous country — which, while more intriguing than slogans like "Malaysia, Truly Asia" or "I Feel Slovenia," is not exactly an inducement for people to visit.

Related Links:

Pakistan Indus River Kayaking

Kayaking Goes Over the Edge

Climbing K2: The Ultimate Challenge

Three Cups of Tea

Pakistan Tourism

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Wednesday, June 17, 2009

Expectations Rise For Economic Rebound in Pakistan

Shares in the Karachi Stock Exchange 100 Index trade at 9.6 times reported earnings, the lowest in Asia excluding Japan, after the gauge rose 21 percent in 2009, according to Bloomberg.

Dollar-denominated debt sold by Pakistan returned 86.4 percent so far this year, more than any of the 45 emerging markets tracked by New York-based JPMorgan and 19 developed countries followed by Merrill Lynch & Co.

Aberdeen Asset Management Plc in London is bullish about Pakistan because the country is a beneficiary of international support. The U.S. House voted on June 11 to triple economic and development aid and to increase military assistance to stabilize a country vital to the war in neighboring Afghanistan.

While the US aid announcement attracts the attention of investors, the fact is that the Pakistani global diaspora's remittances to Pakistan are far larger than any foreign aid packages. Over 7 billion dollars have already been received in the first eleven months (July-May) of the current fiscal year 2008-09, according to APP.

Foreign direct investment in Pakistan declined by 8 percent to $3.04 billion, compared with $3.31 billion in the year-earlier period, according to Reuters.

In local currency, Pakistan's exports during July-April (2008-2009) were Rs.1,147,435 million (about $14 billion) versus Rs.938,428 million during the corresponding period of last year, showing an increase of 22.27 percent, according to Federal Bureau of Statistics. But the rupee decline against dollar has more than offset any increase in exports.

“We are positive,” said Edwin Gutierrez, who helps oversee $4.5 billion of global emerging-market debt at Aberdeen Asset Management Plc in London and added Pakistan dollar bonds to his funds earlier this year. “It was pretty clear that the international community is supporting Pakistan and providing it with a decent amount of money.”

An important source of investments in Pakistan are the Islamic nations of Asia and the Middle East. While the Islamic finance is still early in its early development stage, I see it as a crucial vehicle to ensuring in the future that significant part of the wealth of Muslim investors is invested with Muslim businesses in Muslim nations to help them develop. Already, the biggest foreign direct investors in Pakistan are Muslims from Dubai, Malaysia and the Middle East.

APP reported that Malaysia topped the list of investors making Foreign Direct Investment (FDI) in Pakistan during first six month of year 2008, according to data released by Ministry of Foreign Affairs. The Foreign Direct Investment during the first five months of current financial year reached US$ 1.8 billion registering an increase of 1.5 percent, export reached to US$ 8.2 billion with a growth of 20 percent and foreign remittance at 2.9 billion registered an impressive increase of 15pc.

The May Bank of Malaysia made the biggest investment of US$ 907 million in banking sector followed by Saudi Arabia with an investment of US$ 750 million in steel sector and UAE with an investment of US$ 500 million in power sector in Pakistan.

The global economic meltdown has not deterred the foreign investors, including Malaysians, from investing in Pakistan, as Pakistan’s economy showed extreme resilience and defied the economic recession with registering growth in FDIs, Export and Foreign Remittance.

The signs of an economic rebound in Pakistan are more visible today, bringing new investors and businesses to Pakistan.

Related Links:

A Trillion Dollar Halal Market

Pakistani Economy Poised For Rebound

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Sunday, June 14, 2009

Trillion Dollar Halal Market

For a long time, the halal simply meant buying meat from a halal butcher, who slaughtered in accordance with Islamic principles. But the halal food market has exploded in the past decade and is now worth an estimated $632 billion annually, according to the Halal Journal, a Kuala Lumpur-based magazine. That's about 16% of the entire global food industry. Throw in the fast-growing Islam-friendly finance sector and the myriad other products and services — cosmetics, real estate, hotels, fashion, insurance — that comply with Islamic law and the teachings of the Koran, and the sector is worth well over $1 trillion a year, according a recent report in Time magazine.

Time attributes the rise of the halal economy to the world's 1.6 billion Muslims, most of whom are younger and, in some places at least, richer than ever. Seeking to exploit that huge market, non-Muslim multinationals like Tesco, McDonald's and Nestlé have expanded their Muslim-friendly offerings and now control an estimated 90% of the global halal market.

McDonald's, Nestle and Tesco are not only non-Muslim owned and managed companies capitalizing on the growing demand for halal products. New ones, such as Canada-based Al Safa, whose products are found in major North American supermarket chains, are joining the fray.

A Muslim name, some Muslim employees, a logo containing Arabic, date palm tree, and a masjid, slick flyers announcing its Halal food products and a 1-800- number with a message greeting you with a Salam and a recording in English and Arabic.

But Al Safa Halal is not a Muslim owned company, according to Sound Vision website. The Kitchener, Ontario-based entity is actually owned by non-Muslim (Jewish) private investors, cashing in on the North American Muslim market.

Beyond halal food, the global economic crisis has brought attention to Islamic finance as an alternative for both Muslim and non-Muslim customers. In a recent article, the Vatican newspaper Osservatore Romano has voiced its approval of Islamic finance. The Vatican paper wrote that banks should look at the rules of Islamic finance to restore confidence amongst their clients at a time of global economic crisis. “The ethical principles on which Islamic finance is based may bring banks closer to their clients and to the true spirit which should mark every financial service,” the Osservatore Romano said. “Western banks could use tools such as the Islamic bonds, known as sukuk, as collateral”. Sukuk may be used to fund the “‘car industry or the next Olympic Games in London,” the article says.

Investors are attracted by Islamic banking's more conservative approach: Islamic law forbids banks from charging interest (though customers pay fees) and many scholars discourage investment in excessively leveraged companies. Though it currently accounts for just 1% of the global market, the Islamic finance industry's value is growing at around 15% a year, and could reach $4 trillion in five years, up from $500 billion today, according to a 2008 report from Moody's Investors Service.

Pakistan's Islamic banks plan to expand their network of outlets this year to take advantage of rising demand for Shariah-compliant financing according to Pervez Said, director of Islamic banking at the State Bank of Pakistan. These banks have 500 branches, after adding 210 outlets last year. Pakistan is promoting growth in Islamic finance to expand the reach of the banking sector which has less than 25 million deposit accounts. Shariah-compliant facilities are forecast to rise to 277 billion rupees ($3.5 billion) this year from 185 billion in 2008, according to central bank data.

French retail giant Carrefour has been selling Halal products in many Muslim countries for several years now. In fact, Carrefour Malaysia created a unique program in collaboration with the Ministry of Domestic Trade and Consumers Affairs. The company has a dedicated team to monitor and assist small and medium-sized enterprises to develop Halal products, which will be distributed through the Carrefour chains in Malaysia and other countries. Carrefour is the second largest hypermarket in the world, while Carrefour Malaysia set up its Halal Department in 2006.

Carrefour is now looking to expand in several more Muslim countries, including Pakistan. “We are not interested in what I call ‘French North Africa’, so in the west we won’t go beyond Libya. To the east we are looking at markets like Iran and Pakistan. India is too far away for us.” François de Montaudouin, chief executive of Majid Al Futtaim Group, said recently.

Former Nixon adviser and now an American-Muslim commentator, Robert D. Crane, recently described "the universal principles of what may be called Islamic economics, not the glitzy stuff of the so-called Islamic banks but the maqasid al shari’ah or universal and essential purposes of justice as taught principally in the haqq al mal of classical Islamic thought, first revived in the modern era by Grand Mufti Ibn Ashur’s book, Maqasid al Shari’ah, published in 1946 and translated by the International Institute of Islamic Thought in 2007". Crane says that "these provide a new paradigm ready to replace the bankrupt paradigm of concentrated power that dominates in both socialism and capitalism."

The dramatic growth of interest in Halal business and finance can be measured by many international conferences and expos held each year to bring together various regional and international players. A number of major events are planned this year in Asia, Middle East and Europe.

While the Islamic finance is still early in its early development stage, I see it as a crucial vehicle to ensuring in the future that significant part of the wealth of Muslim investors is invested with Muslim businesses in Muslim nations to help them develop. Already, the biggest foreign direct investors in Pakistan are Muslims from Dubai, Malaysia and the Middle East.

APP reported that Malaysia topped the list of investors making Foreign Direct Investment (FDI) in Pakistan during first six month of year 2008, according to data released by Ministry of Foreign Affairs. The Foreign Direct Investment during the first five months of current financial year reached US$ 1.8 billion registering an increase of 1.5 percent, export reached to US$ 8.2 billion with a growth of 20 percent and foreign remittance at 2.9 billion registered an impressive increase of 15pc.

The May Bank of Malaysia made the biggest investment of US$ 907 million in banking sector followed by Saudi Arabia with an investment of US$ 750 million in steel sector and UAE with an investment of US$ 500 million in power sector in Pakistan.

The global economic meltdown has not deterred the foreign investors, including Malaysia, from investing in Pakistan, as the Pakistan’s economy showed extreme resilience and defied the economic recession with registering growth in FDIs, Export and Foreign Remittance.

Islamic bonds, called Sukuk, are a great way for Muslim nations to raise development funds from Muslim lenders, rather than do Euro or dollar offerings in Europe and America. This Islamic bond market is also beginning to develop.

It is important for Muslim businessmen and entrepreneurs to seize the opportunity from the projected phenomenal growth of the halal markets. There are a whole range of products and services from food and medicine to finance to travel and entertainment that can come out of the halal movement. It is clearly a mutli-trillion dollar opportunity during the next three to five years.

Related Links:

Halal Journal

Top 10 Islamic Funds Performance

Islamic Finance News

Pessimism is the Ultimate Kufr

Islamic Finance Summit

Foreigners Eying Farmland in Pakistan

FDI Rising in OIC Economies

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Monday, June 1, 2009

Silicon Valley Supports Human Development in Pakistan

The Human Development Foundation (HDF) held its sixth annual benefit dinner at the Wyndham Hotel in San Jose, CA, on May 30, 2009. The dinner attracted about 500 attendees. In spite of the down economy and rising unemployment in the high-tech valley, the event exceeded HDF 2008 record of $140,000 in donations by raising $170,000 this year for HDF programs, to increase literacy, improve healthcare and fight poverty in Pakistan. Similar events are held each year in all major cities in North America to raise large sums for the noble cause HDF has undertaken.

HDF's efforts are inspired by late Dr. Mahbub ul Haq, the famous Pakistani development economist who pioneered the prevailing human development theory, and founded the Human Development Report of UNDP published each year by the United Nations. The focus of the HDF effort can well be summed up by what Dr. Haq said, " the last analysis, it is a child who did not die, a disease that did not spread, an ethnic tension that did not explode, a dissident who was not silenced and a human spirit that was not crushed." Sadly, Dr. Haq's home country and his South Asian neighborhood continue to rank very low on the human development ranking of the nations of the world.

Local HDF sponsors presented a report on HDF projects in various parts of Pakistan, including community empowerment, village development, non-formal schools, adult literacy, health clinics, water management, microfinancing, etc. As the keynote speaker and US Congressman Mike Honda noted at the event, the efforts like HDF's are likely to be far more effective than the military operations to end insurgencies in South Asia.

Here are some of specific details of the HDF efforts in Pakistan:

1. Community Empowerment: Rather than giving out charity, HDF works in partnership with community participation for their uplift. Following this philosophy of "hand-up" instead of "hand-out", HDF has built the following:

a. 1302 development organizations(DOs).
b. 146 village development organizations(VDOs)
c. 61 activist workshops held
d. 10,851 people participated in community management skills training.

2. Community Physical Infrastructure Development: This program helps communities improve heir environment, including link roads, water storage, hand pumps, tube wells, irrigation, sanitation and pest control projects. Such projects are executed with community's sweat equity (DO) and manged by community (VDO) upon completion. Over 600 such projects have already been completed, and hundreds are currently underway.

3. Schools: HDF education program has grown from a few non-formal schools with 20-30 children each, to multi-grade schools with over 100 children each. Many of these schools operate in remote areas, and curriculum is activity-based to retain children's interest and reduce drop-out rates.

a. Over 10,000 students enrolled.
b. 193 non-formal one-room schools.
c. 16 primary and secondary schools.
d. 56 teacher training courses.
e. 254 adult literacy classes.
f. 3,600 adults attended schools.

4. Health: HDF offers healthcare programs from preventive to curative. In the areas served by HDF, here are some statistics:

a. 79% of births attended by trained personnel.
b. 65% of children are fully immunized.
c. 85% of children 2-5 years old are fully immunized.
d. 101,000 patients treated in out-patient clinics.
e. 918 health seminars presented.
f. 92 free healthcare camps organized.

5. Microfinancing:This program has grown from offering small loans to individuals to joint ventures and community partnerships, and "one village, one product" programs. In addition to capital, these programs also offer skills training to start and run the businesses. These microloan programs are based on the Islamic principle of Murahaba. Here are some specifics:

a. Over 6000 loans amounting to a total of over one million US dollars.
b. 98 joint ventures.
c. 8 "One Village, One Product" programs.
d. 138 poultry farming projects.
e. 9,500 people trained.

During his keynote speech, Congressman Honda said the US foreign policy should have the same goals that the HDF has in Pakistan. Drawing from his experience as a US peace corps volunteer to support education and infrastructure development in Central America in the 1960s, he proposed a similar effort in restoring US credibility in Pakistan and Afghanistan. He praised the new US emphasis on economic aid and said he supports the 80/20 rule that General Petraeus has outlined, with 80% emphasis on the political/economic effort backed by 20% military component to fight the Taliban insurgency. While the aid to Pakistan bill is still not fully developed, Honda wants to see a large part of the economic aid be funneled through non-government organizations(NGOs) and public-private partnerships to make such aid more effective in improving the lives of average Pakistanis. Honda strongly supports Congressman Kucinich's efforts to establish a US department of peace to focus on maintaining peace by developing and promoting conflict resolution techniques and broad efforts at human development and poverty alleviation.

Congressman Dennis Kucinich's bill proposes the cabinet-level Department of peace that embodies a broad-based approach to peaceful, non-violent conflict resolution at both domestic and international levels. The Department of Peace would serve to promote non-violence as an organizing principle in our society, and help to create the conditions for a more peaceful world.

In a panel discussion after the keynote, Ethan Casey praised what HDF and other Pakistani-American organizations are doing to decrease human suffering in Pakistan. But he emphasized the need for Pakistani-American community to also reach out to the the mainstream white Americans who are often ignorant and sometimes suspicious of Pakistan and Pakistanis. Casey, who often speaks to mainstream American audiences about Pakistan, has traveled to Pakistan several times and written a book about his experiences. Ethan singled out Greg Motenson's efforts in building schools in Pakistan's northern areas and recommended his book "Three Cups of Tea". He is planning to study Urdu as a graduate student at University of Washington in Seattle, and continue to pursue his interest in Pakistan.

Prior to the keynote and panel discussion, there was a presentation by Dr. Mubina Agboatwala, chairwoman of Health-Oriented Preventive Education (HOPE), a Karachi NGO. She talked about her visit to Mardan and the extreme heat and dire conditions in the refugee camps in the north west. These people have left the war zone for safety, following the counter-insurgency operation launched by Pakistan military. Dr. Agboatwala said that the government has registered and housed only about 15% of an estimated 2.5 million IDPs in government's tent cities. The rest are staying with friends or family, an untenable situation if the war drags on long.

San Jose city vice mayor Dave Cortese, a good friend of the local Pakistani-American community, spoke of the positive contributions of Javed Khan, the man behind the efforts of HDF in Silicon Valley, and presented a plaque to him, amidst loud applause by the audience.

The well-organized event concluded with a geet and ghazal program by singer Hanif Noormohammad.

The HDF events are sponsored by many prominent Pakistani-Americans, including NEDians in Silicon Valley, through their contributions of money and time every year.

My daughters have volunteered for this event in the past years and my family and I regularly attend it every year. It is one of the few Silicon Valley events that is truly worthwhile for us because of the money it raises to serve a very noble cause, near and dear to our hearts. Organizations like HDF represent the best way for us to move us toward a better world free of conflict where human life is truly valued.

Related Links:

Aid versus Trade, Investments and Remittances

Microfinancing in Pakistan

HDF Silicon Valley Fundraiser 2008

Aid to Pakistan Bill 2009

Light a Candle, Do Not Curse Darkness

Facebook Group-Zimmedar Shehri

Helping Children Become Responsible Citizens

Orangi Pilot Project

Three Cups of Tea

Volunteerism in America

Dr. Akhtar Hamid Khan's Vision

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