Archive for May, 2010

Targeting the Ahmadis

Reuters Image

I feel sick to my stomach.

Today more than 70 people were killed and 108 were injured when gunmen launched simultaneous attacks on two Ahmadi mosques in Lahore. The attacks – involving blasts as well as gunfire – took place during Friday prayers, when “over 1,000 worshipers were present in the mosque.” The NY Times cited the city coordinating officer who said that more than three hours after the attacks began, “the police took control of the mosques, where they found bodies strewn across the main floors and verandas.”

In a statement, the Ahmadiyya Muslim Community UK noted, “The attacks are the culmination of years of unpoliced persecution of the [Ahmadis]… Today’s attack is the most cruel and barbaric.”

Although Pakistan’s political leaders condemned the attacks today, saying it “would generate greater resolve to combat extremism,” those statements failed to acknowledge what led to such killings in the first place. The Ahmadiyya community view themselves as a Muslim sect. However, because they claim their leader Mirza Ghulam Ahmad was a prophet (though, noted the BBC, “The Ahmadis insist that he was not a “law-giving” prophet and his job was only to propagate the laws enunciated by Islam’s Prophet Mohammad“), “they were declared non-Muslim in Pakistan in 1973, and in 1984 they were legally barred from proselytizing or identifying themselves as Muslims.” According to the U.S. Commission on International Religious Freedom, the Ahmadiyya community, said to number between three million and four million in Pakistan, endure “the most severe legal restrictions and officially sanctioned discrimination.”

Why were the Ahmadis targeted in such a senseless, horrific and violent way today? Because we have a society that not only turns a blind eye to persecution but also legitimizes the mistreatment of all minorities in Pakistan. According to the LA Times, an Ahmadi elder from the Model Town mosque said the mosque had been getting threatening phone calls for some time, but, he noted, “when we asked the government and police several times to enhance our security… we didn’t get anything.”

Tell me – is this a country that we can proud of? Pakistan was supposedly established as a homeland for Muslims, to free them of discrimination. This same country now allows persecution to continue not just unabated but often by the writ of the state.  Intolerance and ignorance have a foothold in the fabric of this society, and today’s tragedy further highlights this horrific state of affairs. I am ashamed and disgusted.

This is a screenshot of the Pakistani Passport Application. Please note section c. This to me further emphasizes the problem.

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Enough with the Conspiracy Talk

Everybody loves a bloody conspiracy theory.

But according to the NY Times, this is especially true in Pakistan. The news agency noted yesterday that conspiracy theories are “a national sport in Pakistan, where the main players — the United States, India and Israel — change positions depending on the ebb and flow of history.”

Forget cricket (*cough* hockey), guys! Let’s play conspiracy battleship! Maybe we’ll actually win!

The Times added in its report,

The problem is more than a peculiar domestic phenomenon for Pakistan. It has grown into a narrative of national victimhood that is a nearly impenetrable barrier to any candid discussion of the problems here. In turn, it is one of the principal obstacles for the United States in its effort to build a stronger alliance with a country to which it gives more than a billion dollars a year in aid.

In the foiled Times Square bomber Faisal Shahzad episode, the United States, not Pakistan, was the culprit. At least according to some Pakistanis. Hashmat Ali Habib, a lawyer and a member of the bar association, told the NY Times, “They have planted this character Faisal Shahzad to implement their script…My advice for the American nation is, get free of these think tanks.” In an accompanying video report to the Times piece, Adam Ellick interviewed a family friend of Shahzad who further emphasized, “This is absolutely not a true story…[the plot was done] just to justify American and Allied forces’ presence on both sides of the Afghan border.”

So here’s a question for you, dear readers – are conspiracy theories an integral part of Pakistani society? I have blogged about this topic on numerous occasions, oftentimes venting my frustration with leaders and media personalities who peddle Zionist/RAW/Blackwater enemies like a freaking bake sale. Bomb blasts in Lahore? It was obviously the work of Mossad. Bomb threat in Peshawar? Well, I did see some Americans with beards roaming around. Must be Blackwater up to no good again.

Scapegoating is often used by politicians (I’m looking at you, Rana Sanaullah) to absolve themselves from blame. Media personalities and fixtures like ex-ISI chief Hamid Gul (why does this man still get air time, why?!) and the red-bereted Zaid Hamid propagate a hardline but digestible narrative, what Chapati Mystery’s Manan Ahmed has termed, a “national victimhood.”

But does this narrative exist within a spectrum of opinion of Pakistan, or does it represent the national sentiment in Pakistan?

If I was reading the NY Times article and didn’t consider the nuances of such an issue, I might believe that conspiracy is a collective part of Pakistan’s imagination. But I would ironically be doing the same thing as someone who parroted yet another one-sided theory, wouldn’t I?

Glenn Greenwald over at Salon.com called the Times piece an attempt “to mock and pity Those Crazy, Primitive, Irrational, Propagandized Muslims and their Wild Conspiracy Theories, which their reckless media and extremists maliciously disseminate in order to generate unfair and unfounded hostility toward the U.S.” He noted,

There’s little doubt that many Pakistanis believe all sorts of things that are false and that some extremist sectors peddle paranoid conspiracies.  Propaganda is a standard tactic used by political and religious leaders of all types to manipulate their followers, as is casting blame on external enemies for those leaders’ failures.  Indeed, it’s virtually impossible to find a society free of extremist paranoia, and Pakistan undoubtedly has its share.

Paranoid voices exist in all societies where a spectrum of opinion is allowed to be expressed, including the United States (hello, Glenn Beck and Fox News). As Greenwald emphasized,

And that’s to say nothing about the orgies of “conspiracy theories” churned out on a daily basis from right-wing talk radio, blog outlets, Fox News and even establishment Republicans over the years — from Iranian computer viruses, Vince Foster’s murder, the nefarious Muslim-Leftist alliance, ACORN’s omnipotence, and Obama death panels to The Vicious War on Christmas, the DOJ’s “Al Qaeda 7,” Maoist followers in the administration, Obama’s Kenyan birthplace and Islamic beliefs, and the subversive Congressional interns serving at the behest of CAIR.

According to a poll by Harris Interactive in March, many Republicans believe that President Obama is a “domestic enemy,” with 24 percent (14 percent overall) claiming he was the Anti-Christ (Interestingly, 38 percent of Republicans polled also believe he’s doing “many of the things Hitler did”). Um, yeah.

The issue of paranoia in Pakistan is not without merit, but it’s also unproductive to view this phenomenon as a reflection of the entire nation, (unless we have significant poll numbers). Moreover, it’s important to ask why such beliefs actually exist, and look at the root causes of the problem. In the case of Faisal Shahzad, shuttling blame from one country to another is really not going to get us anywhere.

Hmmm. MillatFacebook Apparently LOVES Zaid Hamid. Do you?

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AFP Image

AFP Image

According to news agencies, about 130 relatives (25 families) of suspected Taliban militants have been expelled from their homes in Swat Valley and are currently “living in a camp guarded by the military.”

Here’s the interesting part – the families were not “banished” by the Pakistani military. They were ordered to leave by Swat’s local jirga (council) “because their relatives failed to surrender” to security forces, reported the AFP on Tuesday. Colonel Akhtar Abbas, an army spokesman in Swat, told reporters, “A jirga expelled these people because there is a fear that they are still providing support to the militants and targeted killings started in the area.”

According to BBC News, “The military has put them up at a camp previously used by Afghan refugees in the Malakand area.” After guards at the camp reportedly stopped reporters from talking to people there,  Col. Abbas told the BBC, “We are not hiding anything, we will take media persons to the camp when the time is right.” Although Abbas said the Army is providing these families “food, drinks, and other necessities,” news agencies noted there are “unconfirmed reports that people in the camp have had their mobile phones taken away.”

The Human Rights Commission of Pakistan have condemned this development, claiming it was unlawful to expel militants’ families. The organization asked the government to take action against the tribal council, telling reporters, “We are against the law of collective responsibility. If someone becomes a militant, his family should not be punished. No lashkar (local militia) or tribal council has the authority to expel or punish anyone and the government should take action against it.” HRCP, in the statement, added, “If anyone is suspected of wrongdoing, he or she can be kept under observation in their own areas as well.”

This situation is interesting because it delves into issues of collective responsibility and guilt by association. In Israel, for example, the country’s military (IDF) has used a house demolition policy since 1967, ultimately destroying Palestinian homes “to deter Palestinians from acting against Israel and its citizens.” According to the organization Diakonia, “[I]t appears that the main motivation behind these demolitions, referred to as punitive demolitions, is to punish the Palestinian society for acts committed against Israelis. The demolished homes belong to families of Palestinians that have either carried out or are suspected of having carried out violent actions against Israelis.” Such actions are essentially in violation of the Fourth Geneva Convention, which states, “No protected person may be punished for an offense he or she has not personally committed, and ‘collective penalties and likewise all measures of intimidation or of terrorism are prohibited.'”

In the case of the Swati families with alleged associations to Taliban militants, here are some interesting questions:

  1. Should the expulsion of 130 individuals from Swat Valley to a military-administered camp be considered collective punishment, if all families refused to surrender their Taliban-linked relatives? Is this action then ultimately a violation of international law?
  2. Even if the families didn’t give up their relatives, should they be banished to refugee camps and made IDPs? Or could the situation have been handled without this expulsion?
  3. Now that they are in these camps, how long are they expected to stay there? Will they be welcome to return home in the long-term?

The development raises important questions that should be asked in an asymmetric war where the lines between good and bad are more blurred than polarized. Moreover, given Pakistan’s still-pertinent IDP (Internally Displaced Persons) situation, it seems problematic to actively add more people to camps, seemingly without a strategy to return them home. Although many IDPs have since returned to Swat since last year, numbers of people in the country continue to be displaced due to military operations. The United Nations High Commissioner for Refugees (UNHCR) estimated last month that there are roughly 1.24 million IDPs in Pakistan, (The recent landslide in Hunza has displaced more people, and about 1300 people are currently housed in a camp in Altit village).

For the now displaced relatives, the ramifications of this perceived collective punishment should also be taken into consideration. Such actions are certain to fuel more discontent among these populations, which is problematic. Moreover, although the military has said the decision was made at the hands of the local jirga, it is likely they at least had some influence in that policy. Ali Dayan Hasan, the South Asia researcher with the NY-based Human Rights Watch, told me that there has been “a pattern of abuse by local jirgas and militias at the request of  the military,” a phenomenon HRW has been tracking in Swat Valley. He added, “The state authority should ensure that these people can return to their homes in safety and remain secure upon return.”

I wonder though whether the damage has already been done.

(Many thanks to Gregg for background help on Israel’s house demolition policy!)

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AFP Image from Express Tribune

How on earth did we get from a South Park cartoon being censored to the Lahore High Court banning Facebook?

As I wrote here a few weeks ago, Comedy Central censored the oft-controversial South Park after the show depicted the Prophet Muhammad in a bear suit, leading a fringe Islamist group Revolution Muslim to make an alleged incitement for violence against creators Trey Parker and Matt Stone. This then led fellow cartoonist Molly Norris to create the posterlike illustration “Everybody Draw Mohammed Day!” to voice her support for Parker and Stone, saying in an interview, “As a cartoonist, I just felt so much passion about what had happened.. it’s a cartoonist’s job to be non-PC.”

Her illustration against Revolution Muslim’s response and the subsequent censorship of South Park was meant to be a one-off protest. However, Jon Wellington was inspired to create a Facebook page, “Everybody Draw Muhammad Day!” which called for artists around the world to create their own depictions of Prophet Muhammad on May 20. The group claims that it is not trying to “slander the average Muslim,” adding, “We simply want to show the extremists that threaten to harm people because of their Muhammad depictions that we’re not afraid of them.”

Norris, the cartoonist the group claimed to be the inspiration behind the event, has distanced herself from the controversy, writing on her website,

I did NOT ‘declare’ May 20 to be “Everybody Draw Mohammed Day”…At any rate…my cartoon-poster, with a fake ‘group’ behind it…went viral and was taken seriously. I never started a Facebook page (I see that the two men who started the different FB pages names have now been made public). The vitriol this ‘day’ has brought out, of people who only want to draw obscene images, is offensive to Muslims who did nothing to endanger our right to expression in the first place. Only Viacom and Revolution Muslim are to blame, so…draw them instead!

On Wednesday, in response to the Facebook group and the increasing number of images (many that do, in fact, aim to insult the religion), as well as protests on university campuses across the country, Pakistan’s Lahore High Court ordered the Pakistan Telecommunications Authority (PTA) to block Facebook across Pakistan until May 31. According to BBC News,  “The lawyers’ group  [that brought the petition] says Pakistan is an Islamic country and its laws do not allow activities that are ‘un-Islamic’ or ‘blasphemous.’ The judge also directed Pakistan’s foreign ministry to raise the issue at international level.”

So it seems that Comedy Central’s censorship has ultimately led to more censorship. Does anyone else sense the irony here?

It is not that I don’t think “Everybody Draw Muhammad Day!” isn’t purposefully offensive and hateful – looking at the Facebook page, the wall is littered with derogatory and ignorant statements against not just the Prophet but against all Muslims. Even if the group claims to not “slander the average Muslim,” the problem with any movement that goes viral is that the intended aim eventually becomes irrelevant, an after-thought. Wannabe “artists” are no longer concerned with the reason behind the South Park censorship, but instead use this platform to lob insults at the religion as a whole. Any sane person would tell you that’s ingredient for disaster.

But a sane person would also tell you the answer is not blocking the platform all together. First, blocking Facebook doesn’t mean the group went away, or that “Draw Muhammad Day!” was stopped altogether. Second, why does the state get to weigh in on a viral movement and subsequently make arbitrary decisions that don’t just blind Pakistan to the event but also cuts citizens off from the entire social networking website? If Pakistan reportedly has 2.5 million active Facebook users, that essentially means 2.5 million people were not given the opportunity to make the choice themselves. It essentially sends the message that the state knows what’s best for you, even if you know better. To me, that’s just as unproductive.

Freedom of speech is a tricky issue, there is no doubt about that. An anonymous blogger quoted on Norris’ website emphasized, “Fight for the right to draw Muhammad, but then decline doing so.” This is a significant (albeit still controversial) statement. Yes, people have a right to voice their opinion – getting death threats as a result just fuels the root causes behind that opinion in the first place. But to use this as an opportunity to incite and marginalize a community already on edge? That’s another thing all together. As for the Pakistani government, concentrate on the big picture.  Because the LHC decision may have only exacerbated the situation further.

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APP Image

On December 31, 2009, the federal government and finance ministers from Pakistan’s provinces signed the 7th award of the National Finance Commission, a development that was widely regarded as a positive step in Pakistan’s political and economic progress. Below, Bilquis, a consultant from Lahore, assesses the NFC award and whether it should actually be considered a success:

In December 2009, rallies were held all over Pakistan to celebrate the approval of the 7th National Finance Commission (NFC) Award. In March 2010, President Zardari officially signed and approved the award. Numerous critics applauded the NFC award as a major accomplishment and a product of the democratic process. However, I’ve often wondered if it really is a silver lining.

The NFC is a government body that is responsible for redistributing tax funds that are collected by the government to all provinces. As per Article 160 of the 1973 Constitution, it is mandatory for the government to meet every five years and present a NFC award that allocates resources among the federal and provincial governments (PGs). Provinces then re-distribute revenues amongst themselves, through a revenue-sharing formula.

The 7th NFC award was an enormous success for numerous reasons:

In horizontal distribution (distribution of resources among the provinces), it introduces the landmark multiple-criteria formula for redistribution. The multiple-criteria replaces the single criterion ‘population density’ formula that has been in place since the 1st NFC award in 1974. The single criterion was not only an outdated way of distribution of income, but it also unfairly favored Punjab province at the cost of Baluchistan, NWFP [Khyber-Pakhtunkhwa] and Sindh. Although, these provinces fought for a fairer distribution, a positive conclusion was never reached in horizontal distribution of funds. There was a lack of political will from the federal government and Punjab province to a) relinquish their share and/or b) to hold tangible talks that would resolve the matter. Hence, the multiple criteria is a commendable step forward as it indicates that actual effort was made by the government, especially Punjab, to settle a four decade old debate. Now, distribution is based on 82% weightage to population, 10.3% to poverty, 5% linked to revenue generation and collection and 2.7% to other areas.

Another major accomplishment of 7th NFC award is that the federal government recognizes the rights of the provincial government (PG) over their resources and has agreed to compensate NWFP and Baluchistan for past arrears especially from hydropower profit and on gas surcharges and royalty. NWFP will receive Rs.110 bn. for arrears of hydel profits and Baluchistan will receive Rs. 10 bn. for arrears of GDS. This is one of the main reasons why the 7th NFC was a success. Previously, the government’s refusal to either recognize or offer any type of compensation to the two provinces usually led to a deadlock in discussion and embittered feelings toward the federal government. The 7th NFC award also accepts the right of PGs to retain 5% of their provincial sales tax collection.

Moreover, in the past, when spending funds from the divisible pool, the federal government has been accused of demonstrating an expenditure bias towards Punjab, which continuously disillusioned the other provinces. To address the issue, in vertical distribution (distribution of resources between the Centre and the provinces), the 7th NFC allocates a higher percentage of funds to the provincial governments (PGs) from the divisible pool than to the federal government. As a result:

  1. PGs total share from divisible pool has increased from 47% to 56%.
  2. The award removes the grants and other special awards taken by the federal government. This was a substantial amount—10% out of the total divisible pool.
  3. It has decreased the revenue collection charges taken by the federal government from 5% to 1% and this amount would also be added to the divisible pool.

By providing higher revenue to provinces through increased share and reduced charges, the 7th NFC award directly addresses the past grievances of smaller share in revenue, especially that of Baluchistan and Sindh. It also indicates a move towards provincial fiscal autonomy as PGs will more efficiently allocate resources that best serve and closely represent the provincial wants and needs than the federal government.

On paper, expansion of revenue to provinces in both vertical and horizontal and recognizing rights over resources is a fantastic deal, as it ticks all the correct boxes and appeases old animosities. However, the federal government has taken a substantial cut in its revenue and has overestimated its revenue generation. With rising debt servicing and defence and security-related expenditures, a reduction in its share will result in a large budget deficit for the federal government. Dr. Ashfaque H Khan points out that, “the total expenditure of the federal government on these four items (defense, security, public debt and civil administration) alone will rise from Rs 1,540 billion to Rs 2,075 billion, while resources are projected to rise from Rs 1,337 billion to Rs 2,146 billion.

If other expenditure such as pensions, subsidies, grants and development programmes are added, it is quite apparent that federal government resources will not be sufficient. Secondly, for the NFC to successfully deliver, the federal government needs to add further clarity on defining expenditure assignments to PGs and the PGs need to drastically develop their capacities to spend their resources efficiently and effectively. Otherwise it may lead to the failure of the IMF program which depends on fiscal prudence.

Overall, the 7th NFC award is historic because it succeeded in eliminating an approx 15 year deadlock in discussion and bringing around positive and tangible changes within our federal and provincial revenue distribution. It also highlights the strategic role played by the federal government as it tried its best to ease mistrust between itself and the four provinces. Shaukat Tarin, ex-finance Advisor, stated during the NFC award inauguration speech in Baluchistan, “We asked the provinces to bring forth all of their grievances—such an open house/table of mitigated previous grievances that often resulted in deadlock.” Nevertheless, the success of the NFC depends on the ability to overcome the challenge of fiscal discipline by the federal government and PGs. If the current spending patterns of the PGs are not changed, Pakistan will land in a more difficult fiscal situation, with the country’s debt burden further worsening the situation.

The contribution is the sole opinion of the author and does not necessarily represent the opinion of CHUP. If you would like to contribute a piece to CHUP, please email Kalsoom at changinguppakistan[at]gmail[dot]com. Pieces should be no longer than 800 words please. For past contributions, click here.

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NPR: View from Coo Coo's Cafe in Lahore

NPR (National Public Radio)’s Morning Edition just started broadcasting a really fantastic series on the Grand Trunk Road, which stretches across the subcontinent from the Bay of Bengal to the Hindu Kush mountains. It is one of South Asia’s oldest and most historic highways, ultimately linking India and Pakistan together, and NPR correspondents are making the journey and delivering interesting news reports along the way. According to Morning Edition‘s Steve Inskeep, who joined the team in Pakistan for the second part of the series (the first part traveled GT Road in India), “a new generation is growing up along the ancient road” and the show aims to tell the stories of those young Indians and Pakistans, their opportunities and their problems.

NPR: The Grand Trunk Road

On Monday, Phil Reeves and Inskeep met at Wagah Border [for my backgrounder on the Indo-Pak Border Ceremony, click here], which separates India and Pakistan, to discuss the Indian part of the journey and “hand off the show” as it begins its Pakistan portion. Reeves, who traveled 1200 miles and interviewed many young Indians, told Inskeep this morning,

They [youth] fall into three broad categories – there’s an enormous body of optimism… who are very well-positioned to inherit this new wealth [in India]…then there’s another lot who are still very much filled with hope that they can get something out of society…to lift themselves and their family out of that position. And then there’s a third grouping who have pretty much given up hope, particularly in rural areas…when you go through that great stretch in north India, which hasn’t changed much over the years, you do meet people there, at age 21 or 22, who have already abandoned any hope that they’re going to get out of their situation. But they are investing in their children.

Throughout the journey, the team has been posting some fascinating articles, essays, and photos on the interactive website, some insightful, others worthy of discussion. In an article entitled, “In Pakistan, A Deepening Religious – Secular Divide,” NPR’s Julie McCarthy noted that the line between religion and secularism among Pakistan’s youth is at least partly contingent on students who are part of the madrassa (religious school) system and those who can go to more “privileged” schools and sit “squarely on the Western side of the divide.” NPR interviewed Rana Noman Haq in Lahore, a young 31 year old who “splurges on European vacations and eats at McDonalds,” who argued that his “worldly lifestyle” is “not incompatible with Islam — and it is not diluting his Pakistani identity.” He said, “That’s what globalization is all about — globally, everybody is coming together. We’re still sticking to our values, but within that we are also comfortable with whatever [is] happening anywhere in the world.”

The religious-secular “divide” in Pakistan is certainly an interesting debate, but it is complex and can’t merely be parsed into black and white. First, what does it mean to be secular in the first place? Secularism ultimately means the division of church and state, an ideal certainly championed in the West, but that doesn’t necessarily mean an embrace of Western culture. Just because someone “splurges” on European vacations or eats Mickey D’s doesn’t ultimately make them secular. Moreover, the right-wing voice in Pakistan doesn’t necessarily pertain just to students of madrassasManan Ahmed over at Chapati Mystery wrote a really interesting piece a few months ago called, “Pakistan’s New Paranoia,” where he noted,

The consumers of this narrative represent the largest demographic slice of Pakistan – young, urban men and women under the age of 30. They came of age under a military dictatorship with a war on their borders, and, more recently, almost daily terrorist attacks in their major cities. The twin poles of their civic identity – Pakistan and Islam – are under immense stress. They love Pakistan; they want to take Islam back from the jihadists. But there is no national dialogue, and no vision for the state: no place, in other words, where the young can make sense of their own country. Pakistan is ideologically adrift and headed toward incoherence, unable to articulate its own meaning as either a state or a nation.

Zaid Hamid, who is seen as the televangelist voice of the right wing, has been instrumental in addressing this crisis and reframing this identity. Ahmed noted, “The genius of Zaid Hamid has been to deftly shift the role of Islam from Zia’s strictly performative one to a more flexible mould. His acolytes, who call themselves lal topis (red hats), see a pious man who is less interested in their actual religiosity – whether they pray or not, give alms or not, wear hijab or not – and more concerned with their devotion to the idea of a resurgent, “independent” Pakistan. He calls on Islam mostly to play the role of history.”

NPR quoted Moeed Yusuf, at the U.S. Institute of Peace, who noted, “Because ultimately secularism as a concept is abhorred by most Pakistanis. So if they have to pick a side, it’s going to end up being this right-wing sort of wave that we find in Pakistan today. So again, this may not be religious fanaticism, but this is a very deep-rooted sense of being culturally conservative.”

The debate therefore, is arguably less of a polarized and hard divide, and more of an existential crisis of identity – reflecting a question our leaders have failed to cohesively address and answer – What is Pakistan? This vacuum is dangerous because it leads to extremes on both side of the spectrum who refuse to engage with one another, which in turn exacerbates the issue.

In speaking to youth in both India and Pakistan, NPR is aiming to at least initiate this conversation, which is commendable. It also aims to show how issues on both sides of the border further emphasize our similarities, rather than our differences. Definitely a great series to check out, if nothing else.

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Roshaneh receiving Vital Voices’ economic empowerment award (Marie Claire)

In 1996, the Kashf Foundation became Pakistan’s first microfinance institution, empowering both women and families in an attempt to replicate the Grameen Bank model in the country in a nuanced way. Today, 14 years later, Kashf has 152 branches nationwide, boasts 305,938 supported families, and operates its branches using a franchise model, allowing for closely managed growth. Below, Kashf’s founder, social entrepreneur Roshaneh Zafar, describes what inspired the microfinance organization, its successes and obstacles, and the young Pakistanis involved in the process:

Q: Kashf was started in 1996 and was Pakistan’s first microfinance institution. What inspired you to establish the organization?

Many factors impacted me in making the plunge in 1995 to set up an organization that specifically catered to women’s financial needs.  The first imperative was of course the fact that women in our society do not get the due acknowledgement they deserve for their contribution to the overall economy.  Time and time again, during my travels while I worked for the World Bank in Pakistan, women from all walks of life – rural women, urban women, educated women, illiterate women, working women, home makers – would tell me the same thing, that they wanted a better life for themselves and their families, however, they lacked economic opportunity.  This resonated across the country, from when I sat with shy and veiled women in Kalat in Balochistan to when I engaged with highly empowered and articulate women from the plains of the Punjab.  The second was related to my own commitment, I had grown up in a Pakistan where I had not faced any discrimination on the basis of gender.  I was and am strongly committed to the notion that we can build a world free of gender discrimination – that comes with two strategies, empowering women economically (providing them a financial voice) and investing in their social status (through education and health).

Q: Although the Grameen Bank model has been tremendously successful in Bangladesh, there were many who believed that microfinance would not be as successful in Pakistan. Why do you think this may have been true in the past and how is the Kashf model different?

There are many firsts in the Kashf model, which can highlight some of the success factors of our approach. Our approach to financial services delivery has always been to build the business case for investing in women’s economic development.  There is no doubt that societies that fail to invest in their women – essentially 50% of their work force – can never prosper or develop.  This continues to be a major hurdle for the development of Pakistan and Kashf’s first and primary objective has been to prove the business case for investing in women.  There have been many firsts in Kashf’s life:

  • We were the first specialized MF programme in Pakistan targeting women (essentially we were the precursor to the microfinance ordinance of 2001)
  • We were the first to offer an array of women friendly products: loans for productive purposes, for consumption needs, insurance products and housing loans.
  • We were the first to replicate Grameen’s solidarity lending methodology successfully in Pakistan and subsequently the first to move to individual lending as the market matured.
  • We were the first MF entity to become financially sustainable (2003)
  • We were the first MF entity to raise loans from commercial banks (2007)
  • We were the first MF institution to undertake a credit rating and to get an investible grade rating from an independent company
  • We were the first MFI to look at introducing and scaling up a responsible finance approach

Q: Have any of Pakistan’s endemic issues – from the volatile security situation, its political upheavals between military to democratic rule, to its rampant corruption – hindered Kashf’s growth? What have been some of the major obstacles Kashf has faced in the last 14 years?

Until 2008 we were able to grow our programme at an average rate of 40-50% annually, however, the economic meltdown in 2008 combined with rapid inflation led to a major slowing down of operational outreach.

Furthermore in 2008, much like other sectors, the microfinance sector was impacted by the deteriorating economic and political situation. Pakistan’s economy shadowed the meltdown of the global financial system, through the second half of 2008 and 2009. While this impacted the entire economy, households at the bottom of the pyramid, which form a majority of microfinance users, were especially hurt.  Overall inflation had a regressive impact on low-income households, i.e. the increase in food prices eroded their purchasing power, since they tend to spend a large proportion of their income on basic consumption needs; a food security research conducted by Kashf Foundation in August 2008 reveals that households were spending up to 70% to meet monthly food requirements. Thus, low-income households’ ability to invest in the overall needs of their families has been severely constrained and strides made in the past decade to improve the economic conditions of low income households have been negatively affected.

Additionally, the ability of microfinance users to make payments on their existing loans has been somewhat impaired, due to business failures and decreased economic activity that has reduced the quality of the microfinance portfolio in Pakistan. At the same time, the demand for microfinance loans has increased multi-fold, as a result of inflation and the decline in the exchange rate, which means that people need larger loans to set up small businesses. The economic recession coupled with rising defaults and business failures amongst microfinance users has increased liquidity and refinancing risk for microfinance providers, both in terms of being able to raise additional funds and to meet current debt obligations.  The recent “Banana skins” report taken out by Citibank and CGAP has revealed that credit risk is an emerging issue across the global microfinance sector, while costs of undertaking microfinance operations are negatively affecting the sustainability of many institutions.

Moreover, the economic turbulence has been coupled with socio-political disorder at multiple tiers, and microfinance providers face a high level of political risk as there is an increased perception of the dwindling writ of the state and a deteriorating security situation. Additionally, a precedent for popular mobilization has been set which increases the risk of political intervention in the microfinance sector as different tiers of government are largely unclear of the role microfinance has on pro-poor growth. There has also been an increased tendency of governments and political parties to introduce populist unsustainable income support programs, which suffer from typical targeting and rent seeking symptoms, and are contrary to the spirit of sustainable financial services. Consequently, uncertainties stemming from the political set-up have adversely affected the economy, especially microfinance providers.

Q: Kashf Foundation hires many young Pakistanis who work as loan officers for the organization. What has been your experience working and mentoring these young officers and what has inspired them to work on the ground?

I would not describe it as any other way but inspirational. It is for us to give hope, encouragement and positivity to the youth of Pakistan.  At Kashf, we hire men and women fresh out of college, who then become harbingers of change within their communities.  The fact that they are part of a socially responsible institution unleashes their inner and latent potential – I have seen loan officers get promoted to Area managers in a matter of years.  In Pakistan we don’t lack talent, we lack good institutions to harness that talent.  We have to focus on building institutions that can provide opportunities to young people, and at the same time we have to build their entrepreneurship skills. For this reason, we decided to initiate a youth empowerment programme at Kashf.

Q: What have been some of the organization’s greatest successes? Where do you see Kashf in the next 5 years?

The most rewarding part of my work has been seeing real life changes.  Only a few weeks ago I was visiting Kasur, an area hemmed very close to the Indian border, and which is famous for its leather works.  I had the opportunity to visit a mature client Baji Jamila, who had been working with us for the past seven years.  I entered the courtyard of her small house which had an uneven brick flooring, part of the house had been newly constructed and was built a little higher than the rest, creating two levels of access.  When I arrived, I saw Baji Jamila busy in small ante chamber that she had converted into a mini loom factory.

Six years ago, Jamila had invested in a small spindle machine, which she purchased secondhand for US$150 to spool thread, package it and sell it in the local market.  This business had proved quite profitable and she now has four such spindles working simultaneously, spooling different colored thread on small spools.  Jamila’s husband Muhammad Mansha, seeing the success of his wife’s business left his job as a small time clerk and began working for her, taking care of purchasing the raw thread and getting it dyed, while she ran the spindles and managed the 20 women who work for her to package the thread.  It’s stories like these that really warm one’s heart and make one realize that the impossible is possible.

Overall all, we have seen a successful ramping up of our programme and since 1996 have disbursed loans to 1 million entrepreneurs across the country and provided US$225 million in working capital.  We have also seen that over 60% of our clients invest in new businesses, which has a multiplier effect on the local economy. Within the family this leads to higher income, higher savings and lower food vulnerability and often it translates into better education and healthcare of children.  We often see evidence of improvements in women’s self esteem (90% of mature clients state that they feel more empowered) and easing in tensions between family members.  On a financial level, Kashf Foundation has demonstrated a sustainable approach to delivering MF to low-income communities especially women.

Our aim is to reach out to 650,000 active clients by 2014.

This interview first appeared in Dawn Newspaper on Friday, May 14, 2010.

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