July 2007
Aga Khan seeks private sector led peace
Umesh Anand
Kabul
AKHTER Rezai is 24 years old. Five years ago all he would have had on his
mind was survival and escape from a part of the world so caught up in the
turbulence of war that it did not seem to have a future. But now Akhter
supervises a call centre at Roshan, Afghanistan’s leading mobile phone company.
He wears a coat and necktie and speaks with practised formality.
Akhter says his job brings him $ 1,000
a month, which is a huge jump from the
$175 on which he started as a customer
care trainee just a couple of years ago.
But much more importantly his professional
duties at Roshan give Akhter an
idea of how companies run and what
technology can do to drive economies.
As a manager, Akhter is a creative participant
in the many transactions of a
modern marketplace. He learns to handle people, solve problems and hold on
to customers.
It is much the same for Shireen
Rahmani. She works in Roshan’s department
for human resources development.
If you stupidly ask whether she
heads HR, she gets embarrassed and
says with a shy smile that she is just an associate director. But for an Afghan woman in Afghanistan she has come a long way. She doesn’t cover her head,
dresses in office-wear and can hold her own among men. Roshan is a key investment made by the Aga Khan Fund for Economic
Development (AKFED). A five star hotel and a bottled 
watercompany are some
of the other ventures where The Aga Khan has put money. For him building a
presence in an economy is notonly about growing businesses and bottom
lines. In Afghanistan, he has simultaneously invested in several social initiatives
through the Aga Khan
Development Network (AKDN). The
Historic Cities Programme seeks to
restore monuments and urban architecture.
He also backs voluntary efforts that
may seek to rescue children, set up a
hospital or build a rural enterprise in
medicinal plants.
Typically, an Aga Khan venture takes on high risk by entering a troubled political zone such as Afghanistan, where very few would dare enter. It then seeks to be more socially conscious than other businesses by deferring profitability. For instance, if a normal investor would like to see profits in two years, the Aga Khan will wait for five years. This ensures that the processes of doing business acquire deep roots that reach into the community.
An Aga Khan investment is, therefore, a multiplier. It is a catalyst for wider
change and clears the way for others to follow. For instance, who would set up
a five star hotel in Kabul five years ago? But a five star hotel is needed to
bring in businessmen.
Similarly, a bottled water plant. Now Afghanistan has 11 such plants. Including
Roshan, there are five telephone companies today as the market booms.
An Aga Khan investment brings in technologies and assets that society
needs. Roshan is a good example. Telecom links people, makessmall businesses
more efficient and in general speeds up economic change. It is also a mood
enhancer. When people connect,with each other and the rest of the world,
they tend to feel happier about themselves and acquire
aspirations from which they were cut off.
Roshan has brought new vigour to the telecom business
in Afghanistan with its 1.3 million subscribers. It has created competition in which call and connection prices have
come down. Roshan, for instance, goes to 32 of the 34
provinces in Afghanistan. It sets up networks even when
they aren’t profitable and subsidises them with earnings
from other segments in its operations. It investsin people
and provides equal employment opportunities to men and
women. It pursues cheerful branding in the hope ofunleashing other positive energies in the economy.
In 2003, there were only 12,000 fixed- line phones,
50,000 mobile phones and20,000 satellite phones in
Afghanistan. Now there are 2.6 million connections and
50,000 are being added every month. International calls
used to be $ 4 for a minute. Now they are 45 cents. A local
call is 10 or 15 cents.
AN ENABLING ENVIRONMENT
In Afghanistan, the revival effort is complex. The Taliban,
and before them socialist governments, destroyed the spirit
of enterprise. Today there are awesome backlogs in
infrastructure and many social problems to be addressed.
There is corruption and poverty. The majority 
of Afghans
are below the age of 19 and scarred by conflict. Much
needs to be done to make them employable and keep
them healthy. When President Hamid Karzai came to power five years
ago, the Constitution and the Afghan Compact committed
itself to private capital and a free market. But the legal and
political measures required for implementing growth
strategies have yet to be put into place.
The Enabling Environment Conference held by the Aga
Khan Development Network (AKDN) in Kabul in June
sought to identify ways forward. There is an urgent need to
implement laws, simplify procedures and deliver justice.
The Aga Khan defines the private sector as big and small
businesses as well as non-for-profit initiatives in the voluntary
sector. An enabling environment is one in which
private initiativescan deliver creative and sustainable solutions.
The social entrepreneur is as important as the multinational. The craftsman
as needed as the assembly line.
It is such an environment that will bring business, government and civil
society organisations together to have bottom-up growth. It won’t do for
money to be just pumped into Afghanistan in pursuit of quick profits. Wealth
will have to circulate so that the average Afghan feels empowered and a part
of the ride to a new prosperity.
PHONE AS A WALLET
At the end of 2006, Roshan had put $ 250 million into its networks in
Afghanistan, becoming the country’s largest single investor and contributing
six per cent of the government’s total revenues.
But these cold numbers are just a part of the story. Roshan’s importance is in being the sponsor for the intangibles of normalcy. It is helping repair a crisis
scarred Afghanistan through a combination of telecom technology, employment
opportunities and postive branding.
Roshan means light and its chief slogan is about coming together and remaining
connected: an important message in the fractured and troubled Afghan milieu.
Its networks go all the way up to the borders with Iran, Pakistan, Tajikistan,
Uzbekistan and Turkmenistan. A subscriber can get roaming connectivity in
106 countries. In the past Afghans living on the border would journey to
neighbouring countries to make phone calls.
Roshan employs some 895 people whose average age is 23. Women make up
20 per cent of the employees. Its call centres and offices are well-equipped and
modern structures where men and women work together on computers.
Even more significantly, Roshan provides indirect employment to 20,000
people.There are 198 dealer outlets and 1,100 PCO businesses. It helps
women set up businesses in selling scratch cards and running phone booths
from their homes.
A new package called Mpaisa will make it possible to make payments and
transfer money onmobile phones in Afghanistan. Cash paid upfront to
Roshan serves as a balance from which the subscriber can draw. It is 
likeopening
1.3 million bank accounts in one go with the flick of a telecom switch.“The mobile phone will become the wallet,” says Altaf Ladak, chief operating
officer. “Often Afghans have to travel over long distances, which costs them time
and money, to make payments. Mpaisa will make such transactions instant.”
Roshan is intended to be a bright spot with intimations of hope. Its buildings
are painted blue, yellow and red: the louder the better. Its many giant
hoardings have pictures of smiling families. Such is the positive effect this symbolism has that many Afghans have begun using the same extravagant
colours on private and community buildings.
Asked whether Roshan ever runs into opposition or whether its towers are
sabotaged, Ladak says: “On the contrary there is an ever-increasing demand
for us to set up towers. People can’t wait for connections. No one damages a
tower when it is set up.”
Is it too much to see the seeds of a new Afghan identity in the Roshan
brand? Perhaps not. Communication technology has been a proven driver of
social change. The technology is reinforced by the images that Roshan conjures
up through its operations and advertising and its growing presence as a modern company which is an equal opportunity employer. All this put together
is a potent mix of commercial strategies and social engineering.
RESTORING MONUMENTS
But a modern economic identity in a traditional and deeply religious society is not enough. It is equally important to preserve history and culture. The historical cities project is therefore a necessary effort because it seeks to imbuereforms with a respect for the past and takes Afghans to their roots. It gives Afghans a sense of pride in their heritage. The Babur Garden and Timur Tomb in Kabul were derelictand misused as indeed were other historical sites. It was the legacy of war. Initially, local Afghans saw the restoration effort as amere beautification programme. But as it matured the restoration process built trust. For instance, it involved slow and gentle negotiation to move people back from the periphery of the monuments. That was tough but it meant having to connect and convince residents of the need to yield.With the work on the tomb and the garden coming to end and the monuments being opened up to everyone, there is a new sense of public ownership. People go to the Babur Garden with their families.“Initially, people would say you are only doing this for foreigners, for the tourists,” says the soft-spoken Jolyon Leslie, CEO of the Aga Khan Trust for Culture. “But now that the monuments have been restored and become accessible people don’t think like that any more.” The work done on the Babur Garden and Timur Tomb is a part of the revival of the inner city in Kabul as a heritage location. So, the Aga Khan’s initiatives in Afghanistan are full of nuances that come from seeing development as a patchwork of many sensibilities.
THE ISMAILI WAY
The Aga Khan is the religious head of the Ismailis who are all over the world. There are perhaps a million of them in Afghanistan. Ismailis are known to be nifty businessmen, but they are socially conscious and given to voluntarism. The Ismailis make money to give back to society and fashion a better life for all. It is a part of their culture. The Aga Khan funds innovative development work and yet he maintains a surprisingly low profile. A closer look reveals another side to him. The AKDN spends hugely on causes irrespective of the ommunities that benefit. It makes social investments in companies and sectors that bring far-reaching economic change. Says the Aga Khan: “Sustainable development is only possible when the community is engaged at the grassroots and given the ways andmeans to take responsibility for its own future.” It is part of the Aga Khan enormous influence as a Muslim leader and visionary thatthe Enabling Environment Conference was attended in person by the Pakistani Prime Minister. The Malaysian Prime Minister marked his presence through a satellite connection. The top leaders of the Afghan government and parliament were all there and even sat through working group sessions. The conference ended with a statement seeking partnerships between civil society, business and government. It stressed the need for “bold and immediate action” to inspire confidence “in the long-term future of Afghanistan”. The conference called for implementation of key laws and amendments to encourage private sector involvement in the social and economic development of the country. Equally significantly, it proposed independent certification bodies for voluntary entities because of the importance of civil society. What will the conference really achieve on the ground? Much depends on how President Karzai holds his own.At the five-star Serena Hotel (which is the Aga Khan’s investment and belongs to a chain by the same name with properties all over the world) on the opening day of the conference helicopter gunships hovered overhead. Dogs sniffed out rooms and special security fell in place everywhere fromthe main gates to the corridors and the restaurants. Not only were the Aga Khan and President Karzai going to be at the hotel for the conference’s inauguration, but a high-powered American delegation was also around, though for entirely different meetings. Five years after an elected government came to power in Afghanistan, no one wants to take chances in Kabul. The best guarantors of peace are still the machines of war. The conference of course was intended to send out the message that there are ways to end this stress quickly.
ANGEL OF THE STREETS
Engineer Mohammad Yousef is our sensitive guide through Kabul’s streets. He is a glowing example of what a vibrant civil society can do. He has been running Aschiana since 1996 and reaches out to 10,000 children. Education and free meals apart, the children find in Aschiana’s six centres safe places where they can get off the streets. Aschiana also provides lessons in music and painting so that children who have only known trauma can seek some balm in creative pursuits. Aschiana hosts a Children’s Development Bank,
which children manage themselves and use to put away their earnings from the small jobs they do on the street. So if you go to one of Aschiana’s centres in Kabul it is likely that you will meet little Adil or Rahim or Mohammad who will show you their passbooks in which they have saved 300 or 400 Afghanis. As we walk through the streets, we ask Engineer what it is that Afghans want most from their government. “Jobs. Everyone wants a job. Obviously the government cannot give everyone a job. So it must create conditions in which economic activity flourishes and people can earn from their own efforts. It must encourage self-reliance and entrepreneurship. The bureaucracy and corruption is stifling.” And what about the Taliban? Will they ever return? “It is five years and not much has been achieved on the ground. If the government can’t make people’s lives better, they will lose their patience. Anything can happen,” says Engineer. There are many civil society initiatives like Aschiana in Afghanistan. Documenting their work gives some idea of what private effort can achieve. |
SOME DEFINITIONS |
Three important building blocks
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THE NEW AFGHAN
Aschiana children, with their precious money saved in the Children’s Development Bank, and their wide-eyed search for a normalcy thatcan save them from Kabul’s punishing streets are the new Afghans. Aschiana shows them what they can aspire to and they have 
high expectations. Other new Afghans are Fawad Ahmad Muslim and Akram Fazel, who have spent more than a decade living in the West but have returned to build a modern country. Muslim is a software engineer and Fazel is a biochemist. Muslim has helped bringInternet to Afghanistan and trained government staff in using computers. Fazel is head of the American College in Kabul and has a company that has plans of constructing a new city adjacent to Kabul. Muslim is 33 and had moved to Virginia in the US when he was very young. Fazel is 58 and has lived in France. Their families will never return except for short visits. But both of them are back to give their homeland modern systems and the best that the world has to offer.“When the heart is on fire you must obey it,” says Fazel, explaining why he left behind a much better life in France to come back.
Muslim similarly was among the first expat Afghans to return when the Taliban were overthrown because he believed that his expertise as a software engineer would be hugely valuable to a modernisation process. Both worry about excessive bureaucracy, corruption and needless political rivalries. Both seek out a contemporary vision for Afghanistan for only that will hook it on to speedy progress. Like so many others at the Aga Khan’s conference Muslim and Fazel seek an enabling environment in which they can deliver results with their global skills without fear of wasting more years.
LINKING UP WITH THE WORLD
Afghanistan has much to gain from its links with the rest of the world. There are of course the investments that must come in. But there is also the realm of global social concerns. Shirine Pont, for instance, is the country director of Peace Dividend Trust, an organisation that is committed to getting companies, armed forces and governments to make their purchases locally. Since January 2006, Shirine has already managed to generate $ 40 million in orders for local businesses. The kind of orders may vary. They could be for some finely designed garments by Zolaykha Sherzad of Zarif Design. Or they could be the big orders for bottled water from the US military. The US military spends $ 58 million a year on bottled water, which it imports into Afghanistan. Of this more than half goes in logistical costs. Thanks to the Peace Dividend Trust the US military now makes $ 10 million worth of purchases in Afghanistan where there are 11 water bottling plants. In addition, foreign forces have been persuaded to spend $ 23 million on local purchases. Shirine is also working on linking pomegranate growers to hotels and juice manufacturers and training small local businesses to sell to foreign entities. Certain sectors are in for a boom. Construction is one of them. Developing skills that can be used by big projects is another way in which the Peace Dividend Trust wants to insure that spending is soaked up locally. Nicola Cunningham Armacost is director of Women’s World Banking, which is a microfinance provider. When she first came to Kabul after the Karzai government took over, there was literally nothing. ‘The Central bank had two computers,” she recalls. “The conditions were terrible.” But she found that even under these conditions women were operating small businesses from their homes. Even under the Taliban, they had been running beauty parlours where women would go in their burqas to be made up. There were similarly sewing schools and bakeries. To run these businesses, the women would borrow from family and friends. The one thing they wanted was an organisation that would lend money. “I decided to facilitate the creation of an organisation for and by Afghan women,” recalls Nicola. She finally helped set up an NGO that now has 10,000 clients in just over four years. Since charging interest is not Islamic, the loans are structured differently to cover transaction costs. But they are loans and not grants and give Afghan women their place beside men in the economy. Will all these efforts finally put Afghanistan on a new path to peace and prosperity? Or will the Enabling Environment Conference be just another jamboree of people with good intentions? Such questions don’t find easy answers. But as we lounged on the grass under the trees at the airport waiting for our flights to arrive, it was certain that Kabul’s makeover clock was ticking loudly.
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