Your Excellency, President Mwai Kibaki,
Honourable Minister for Industry, Mukisa Kituyi
Ladies and Gentlemen,
I would like to begin my remarks this morning by thanking His Excellency, President Mwai Kibaki for accepting formally to open this new enterprise, Alltex. I also extend my warmest congratulations to the government and people of Kenya on the occasion of the 40th anniversary of Kenya’s independence, celebrated a week ago. I have a vivid personal memory of being in Nairobi on the 12th December 1963, to witness that historic event. It is an anniversary, Your Excellency, that is proudly shared by Industrial Promotion Services (Kenya) Limited, the sponsor of the enterprise to be inaugurated today. For IPS, too, was born here in 1963 and has grown and matured with the nation whose private sector it had been conceived to help build.
Four decades on, it might be appropriate to pause and reflect on the purpose for establishing IPS and the other institutions that today comprise the Aga Khan Fund for Economic Development or AKFED. First, however permit me to share with you a few thoughts about the Ismaili Imamat, the institution that represents the hereditary office that I hold, and its relevance to the creation of development institutions.
The Imamat is a Muslim institution with a history going back over 1400 years. As Imam of the Ismaili Muslims, I am to be concerned with the quality of life of the Community and those amongst whom it lives. Over many centuries and decades, that responsibility of the Imamat has entailed the creation of institutions to address issues of the quality of life of the time, and it today includes a number of non-governmental organisations, foundations and economic development agencies. The vast majority of the community now lives in countries of the developing world and the newly emerging nations of Central Asia. In these countries, the quality of life is determined by a number of different factors that are, in my view, not limited to the World Bank indicators on longevity, or health, or the economic welfare of an individual, or a community. To the Imamat the meaning of “quality of life” extends to the entire ethical and social context in which people live, and not only to their material well-being measured over generation after generation. Consequently, the Imamat’s is a holistic vision of development, as is prescribed by the faith of Islam. It is about investing in people, in their pluralism, in their intellectual pursuit, and search for new and useful knowledge, just as much as in material resources. But it is also about investing with a social conscience inspired by the ethics of Islam. It is work that benefits all, regardless of gender, ethnicity, religion, nationality or background. Does the Holy Quran not say in one of the most inspiring references to mankind, that Allah has created all mankind from one soul?
Today, this vision is implemented by institutions of the Aga Khan Development Network. Our non-profit agencies include the Aga Khan Foundation, the Aga Khan Education Services, the Aga Khan Health Services and the Aga Khan Planning and Building Services. Their mandate is social development covering schools, health centres, rural support, water and sanitation programmes and the enhancement of civil society organisations. The initiatives of the Aga Khan Trust for Culture, another non-profit agency, include promoting and teaching architecture, revitalising historic spaces, and even traditional music, and developing educational curricula. These non-profit agencies are all about investing in people. Our higher educational institutions, the Aga Khan University and the University of Central Asia, which hope to help mould some of the most talented in future generations, will do so most competently by investing in research. Finally, it is the Network’s for-profit agency, AKFED, that focuses on investing in material resources. The most important feature of these organisations, however, is that they share a vision, they work together, they create opportunity and they are inscribed in a single ethical framework.
AKFED, the entity that oversees and invests in projects such as Alltex, is therefore neither a charitable foundation, nor a vehicle for the personal wealth of the Ismaili Imam of the time. It is a for-profit, international development agency that, because of its institutional background and social conscience, invests in countries, sectors and projects, on criteria far different from those of a straightforward commercial investor. Investment decisions are based more on the prospects for better lives for the constituencies of people that will be impacted by the investments and their results rather than on bottom line profitability. AKFED does seek to generate profits, but they are entirely reinvested in future development initiatives.
AKFED’s various entities, grouped broadly into industry, tourism, financial services, media services and aviation services, look to create economic capacity and opportunity in the developing world, particularly in those areas of the national or regional economies where they are lacking in scope, or scale, or both. This means creating new human and material resources for the future. It means adapting new technologies. It means developing new national and international markets. We have recognised these imperatives.
The approach of the Imamat has always been to respond to the development challenges and priorities of the countries in which it is engaged. Naturally, these priorities differ significantly from one country to another, and from one region to another. It has often meant taking courageous but calculated steps to create opportunity in environments that are fragile and complex at the same time. For AKFED, this has frequently meant giving a lead where others might have feared to tread.
Rehabilitating economies arising out of civil conflict or internal turmoil has been a challenge we have undertaken in environments as varied as Afghanistan, Bangladesh, Mozambique, Tajikistan and Uganda. Once again, however, it is not about short-term commercial gain, but long-term investment in areas of wide human and societal impact. In Afghanistan revitalising telecommunications through GSM telephony, and tourism through a landmark hotel is one example. Bringing light and power for education, industry and safety to Eastern Tajikistan through the Pamir 1 power station is another. Rural electrification in Western Uganda is yet another. Jump-starting local economies through innovative microfinance programmes and related institutions, as has been the case in Afghanistan, Mozambique and Tajikistan is yet a fourth. Each of these initiatives has entailed important manpower development components, investment in technical and management training as well as a significant multiplier effect.
Today’s event evidences a consistent strategy by IPS to support national policies here in Kenya. Our earliest efforts involved creating industrial enterprises focused on import-substitution. Over the years, we have recognised the need to promote exports. Your Excellency spoke recently of the need for agricultural production to benefit from far greater local value-added input; this is precisely the approach taken by IPS in the processing of leather, horticultural produce, meat, and now textiles. And these purpose-built premises, house a factory designed to grow Kenya’s capacity in the textile industry far into the future. We continue to support the government’s privatisation policies in particular, their encouragement of private sector engagement in the provision of infrastructural services. The Tsavo Power Company, an IPS project, has set benchmarks in innovative financing and environmental compliance in the power sector. Here at the Alltex plant we are working with the Kenya Railway Authorities to facilitate the movement of goods in and out of the Athi River Export Processing Zone by adding a link/container terminal to the existing railway network.
For us, responding appropriately to economic opportunity means finding ways of positively impacting people’s lives. Introducing valuable social services such as crèches of the kind we have here at Alltex, and programmes for HIV/AIDS sufferers, are amongst IPS’s pioneering initiatives, here as elsewhere in Africa. Increasing employment opportunities for women who today account for over 40% of the employees of the IPS network has been another. Export-oriented industries in agro business, we have found, through our involvement over the past 15 years, can mean guaranteed, steady incomes and better prospects. AKFED is pleased to be able to contribute to improving the livelihoods of some 40,000 families in the agricultural sector here in Kenya.
Because of their limited resources countries of the developing world will need to be particularly effective in the way they use their resources, and one such direction now being taken by countries of both the industrialised world and the developing worlds is regionalisation.
The East African Community and the planned customs union to be agreed next month will certainly help widen markets and growth potential. The short-term support that the agreement envisages for industries in Uganda and Tanzania vis-à-vis Kenya can help refine and strengthen efficiencies in this country. We remain committed to the regional approach. AKFED sees valuable opportunities to continue to transfer knowledge between countries in the region and to take advantage of economies of scale as it expands its activities, particularly in the tourism sector.
I would urge however, that the East African countries widen the horizons of their regionalization endeavours to include all the key development institutions and resources of civil society. It is when that happens, and only when that happens, that the totality of the region’s human resources will be fully and optimally mobilised, including the capacities of the NGOs, voluntary agencies and liberal professions.
From the point of view of the Aga Khan Development Network there is a lesson we have learnt, and a goal that we hold high. Training, researching, conceiving, planning, and advocating for development are all necessary, but demonstrating that successful and sustainable outcomes can actually be established is the real test. That is part of the rationale for the Aga Khan non-commercial delivery agencies, schools, hospitals and clinics, that is the rationale for our conservation, restoration and cultural initiatives, and that is certainly the rationale for the commercial companies established and operated by the Aga Khan Fund for Economic Development.