Members of the Committee,
It is an honour to be invited to address such an influential business audience here today. Your Federation, Mr President, and your host of members, play a most significant role in the industrial and economic development of India, both at State and at national level. It is a tribute to your energy and perspicacity that you have done this so successfully for so long. It is also, I suggest, a mark of the quality of democracy in this great country that the Government listens to your advice – even if it does not always accept it.
Disseminating information on current Indian problems and commenting on them from the practical standpoint of businessmen, is part of your function, you do it extremely well and it is not my intention this afternoon to trespass on your ground.
You have been kind enough, Mr President, to congratulate me on my Silver Jubilee and to remark on my contribution to various development activities, both social and economic, I greatly appreciate your compliments.
At the same time I must admit that I am quite regularly asked with the Ismaili Imamat has concerned itself, both during my grandfather’s lifetime and now during my own, with the material and mundane issues of economic development. Why have we involved ourselves with such fields of commercial endeavour as you mentioned: banking, insurance, industry and tourism?
Equally often I have asked myself why that question is put. The reason, I think, is that in many parts of the world there is a feeling that religious authorities should not become entangled with the mundane matters of everyday life, let alone with the basic material issues of enterprise. People feel that the world’s highest moral institutions endanger their authority by entering the evil domain of materialism.
Perhaps this perceptions stems partly from the strong Augustinian tradition of Christianity. But, in any case, whatever the cause, my grandfather’s and my own understanding of Islam convinced us of a substantially different premise. He believed, as do I, that the correct interpretation of our office, and of the faith which guides it, is that man must not shy away from material endeavour in the name of his faith. On the contrary, he must be enterprising, contributing of his best to his family and the society in which he lives, so long as the content of his endeavour is within the terms of our social and moral conscience and so long as the objectives of the enterprise are equally acceptable.
In simple terms, the question is less one of whether a man is successful in business or his profession than of the way in which he is achieving success and the purposes for which his achievements are utilised. This, therefore, is the premise which has instigated my grandfather and I to become involved with issues of Third World economic and social development, covering a wide range of endeavour, from the provision of health care and educational facilities to decent housing and employment. This is why, as well as adding to the network of schools and medical centres established by my grandfather I have also set out to expand the Third World development investments which he initiated.
At this point you may understandably ask whether the Imamat operates according to two sets of standards, one for the social institutions, another for economic development. Can the same concepts of management and performance be applied to both?
The answer, in my view, is that they can and very often should be.
Quality control is generally thought of as an industrial concept, but surely it is equally if not more desirable to apply it to the standards of a hospital. Again, personnel performance appraisal systems are most commonly used in business, but are they not just as applicable to monitoring what teachers offer their students?
If professions like nursing or teaching are allowed to slide into neglect, then they become a liability in the national balance sheet.
The Aga Khan Foundation’s largest current project is the Aga Khan Hospital and Medical College in Karachi, which will become the Aga Khan University. Its first stage has been a nursing school, which by setting high standards of teaching has already had a significant effect on the social status, pay and morale of nurses in the rest of the country.
Rural populations, if they are under-paid, under-nourished, under-employed and socially disadvantaged, equally become a liability to the nation. This why we are planning a rural support programme to identify and promote income generating opportunities for the poor in India’s villages. The aim here again is to raise standards, in this case of rural productivity, so as to improve the quality of life of the people concerned.
I believe that quality control is every bit as important to social institutions as it is in business.
We can only achieve it by discarding the concepts of the past and introducing modern management methods; by monitoring results through proper reporting systems and establishing performance benchmarks.
An inventory of someone else’s activities is always boring. However, in order that you will understand the basis from which I draw my next conclusions, please bear with my giving a quick and perforce incomplete picture of some current undertakings in key sectors of our endeavour.
The Aga Khan health and educational network in Asia and Africa includes 200 health care units from major urban teaching hospitals to village dispensaries in the Himalayas. They treat more than a million and a half outpatients every year. Our 300 educational establishments span the spectrum from pre-primary schools to the Aga Khan University, which has just admitted the first students to its faculty of health sciences. At any given time over 5,000 students are pursuing higher educational courses on Aga Khan scholarships.
Where the Foundation functions as the primary agency for these health and educational activities, our Industrial Promotion Services are at present the agency of the Imamat’s economic developments in the Third World. This promotional work has taken two forms: direct participation in projects and the co-sponsoring with other development agencies of specialised development vehicles.
The direct participation has been in fields as diverse. As urban and resort tourism, industry, venture capital companies, banking and insurance.
In the creation of new agencies we have collaborated in promoting institutions as varied as a tourism development bank in Tunisia, a venture capital development company in Bangladesh and the Housing Development Finance Company here in India.
So, you may ask, what conclusions do I draw from all this? Have I learnt anything worth passing on to you from the range of social and economic projects with which the Imamat is concerned?
I have come to certain conclusions about the present recession in the Third World, and about the ways in which the countries of Asia and Africa are addressing the issues of world recession.
First, while each country seems to be responding individually to its own specific economic problems, there is a generally increasing premium being attached to the work of creative people and creative institutions in the Third World today.
Whether we are looking at the New Industrial Policy in Bangladesh, at revised attitudes to private sector investment here in India, in Sri Lanka and in Burma, or at the longer established pragmatism practised in South Korea, Thailand and Singapore, we see the same trend. This is a trend to acknowledge – if sometimes only by implication – that it is of fundamental importance for the Third World to widen the spectrum of activity of creative enterprises and initiatives.
Effective achievements in all fields of endeavour depend upon this approach no matter whether it be in business, in health care, in education or in Government.
Second, there is an increasing awareness of the importance of raising standards. A pragmatic view of the economic progress of a great country like India shows clearly that effort must focus on this.
One cannot give a sense of direction and purpose to any enterprise, whether it is a hospital or a factory, without constantly seeking to improve standards: the standard of the product, the performance of one’s management, the quality of the careers one is offering that management, the working conditions of the labour force. A proportion of one’s profit or of one’s subsidy must be re-invested to ensure this. If you lose sight of standards in the desire to maximise profit or reduce loss. You jeopardise the long-term future.
In India as in much of Asia it is possible to produce industrial goods more cheaply than the industrialised nations of the West. Consequently there is a tendency to imagine that qualitative improvement of the product is unnecessary. In my view this is a most dangerous fallacy. Sooner or later – and with the recession it will probably be sooner – the industrialised nations’ consumers will seek competitive quality as well as competitive prices.
The Japanese have appreciated this. Their industries at first fought a price war with the manufacturer of the Western world. Now they have switched to fighting on the battleground of technological competence. Their success needs no underlining.
Thirdly, the past 25 years have shown that the pace of development and efficiency have to improve in all sectors if developing countries are to make substantial progress. This means that more people reaching the peak of their productive lives have to be harnessed to the national effort, which in turn means eliminating the generation gap at present existing in certain professions. Young qualified, talent needs to be attracted into fields that have become depressed, like nursing, teaching and the broader field of communications. This will only happen if they see viable careers in those professions with good pay and working conditions which reflect the importance of their work to the general well being of the society they serve.
However, and this brings me to the final point I wish to make, creative activity and higher standards can only flourish if the national environment enables them to do so. This environment, which I call the ‘enabling environment’, is made up of many elements. Political stability and confidence in the future. Protection of the rights of citizens. Democratic institutions such as India enjoys. A system of laws which encourage initiative and enterprise. A civil service which is performance oriented and answerable for its action on all fronts including the economic one. These are the kind of factors which attract investment and stimulate the creativity of people in all walks of life.
The disabling factors are familiar to all of us. Bureaucratic rules and regulations. Laws which set out to restrict the dishonest, but which in practice simply impede desirable enterprise, or make it more costly. Nationalisation of companies without true compensation. Expropriation or confiscation of property, the withholding of dividends, unreasonable taxation. All these must go if prosperity is to be achieved.
World recession seems likely to exert such pressures on Third World economies that some of these disabling factors will indeed be removed. But my happiness in addressing you today stems from the fact that national organisations such as your Federation can be major contributors, not only in underlining how very disabling such factors are, but in pointing clearly and consistently to those positive elements which create an enabling environment.
The creation and extension to all areas of the nation’s life of this enabling environment is the single most important factor in Third World development. It is as crucial to national growth as sunlight is to the growth of plants. I am confident that your Federation will promote it successfully.