Our neglect and injustices in Northern Area
By: Tarique Khan Javed
President, Overseas Pakistani Investors Forum.
                           Dated 14 Dec 2010

In our attempt to capture occupied Kashmir we lost East Pakistan and now we may loose our Northern Area as well, if urgent corrective action is not taken by us. Any internationally organized opinion poll may bring shocks for Pakistan for its neglect of the Region for 62 years. With a dominant Ismaili, Shia and Naskhbandi (combined around 90%, see map below) population who are considered almost non Muslims by hard-line Sunnis, people of the Area may have a strong inclination to opt for a “Free Kashmir”  instead of joining Pakistan.
 Kind of  Pakistan which has developed since 1978, has put these some what liberal  Muslims communities at war with the vast majority of Sunnis. The short sighted policies of Zia era ( like Aurangzeb among Moghals), which have still not been reversed, may cause further erosion of territory and weakening of Pakistan.
A Shia State may be the ultimate aim of  the NGOs and Religious organization who have spent a huge amount of fund and energy in sustaining and developing this large Region. While we were in a slumber and confusion, day dreaming of having all of Kashmir as part of Pakistan, effortlessly.
Pakistan at this stage would be best advised to forget about UN supervised plebiscite and quietly let the Kashmir issue go and concentrate on developing the large area it already has. Azad Kashmir may be merged with Gilgit Baltistan along with Chitral, as this was all part of old Kashmir State.
Current government led by PPP is the best hope for Pakistan. As a liberal, secular,  democratic  party supported by MQM and ANP, with similar ideology, it can give assurance to the people of NA that all shads of Islam have equal place in Pakistan and that extremist religious forces can and will be challenged and neutralized using democratic means.
Present Government’s bold decision of creating Gilgit Baltistan province is the first positive step taken in the Area in 36 years.  However allocation of only Rs 12 billion in a Rs 3,200 billion  Budget of  2010-11, for Gilgit Baltistan is very small given the massive size of the Area. It is disappointing that after creation of province funding could not be improved and remained almost similar to previous year level.
As a Nation we must agree to compensate for the past neglect and spend a massive amount of development funds to win the hearts and minds of the people of the Region. It may also be considered payment of their missing share of  62 years. Our priorities will have to radically change if we want to save the situation and Nation must be taken in confidence and informed of the urgency of the situation.

We neglected others cared
Chitral, Gilgit and Biltistan (CGB) have emerged as Showcase of what can be done in the absence of government, resources and very adverse conditions. GOP did build the all weather road linking Islamabad to China and it proved a great boon for the Region. Bhutto in 1974 dismantled the old Feudal order of the Region, although the land distribution in the Region was fair  compared to rest of the Country. Chitral was merged with KP at that time. Other than these three initiatives GOP did little in the Region till the recent formation of Gilgit and Baltistan Province. Kashmir dispute kept the whole Region from Chitral to Baltistan in a limbo.
The vacuum which we created in such a large area had to be fulfilled. This was filled by NGOs and Religious Organizations, with their own agendas and long term goals. Ethnic NGO’s took good care of their respective Areas and People and forged very strong political alliances which may prove very detrimental to Pakistan, in case it goes to UN to test its popularity in the Region.
Role of NGO’s in Region’s survival:
CGB  mainly inhabited by Ismaili, Shia and Nurbakhshi community have advanced far in terms of Education, Healthcare and Woman emancipation than rest of the Country. These areas have been completely transformed over the last 30 years thanks to the guidance and generous help from the Leaders of these Communities.
Aga Khan Education and  Health Services provided their services in the vast region from 1970’s. While Aga Khan Rural Support Programme (AKRSP) stared services in 1982. These institutions  spear headed the efforts  in the Region and set standards for others to follow. AKRSP funded infra structure projects, created Village and Woman Organization to promote Savings, established Cos to create jobs, and gave Micro credits to develop entrepreneurs.
Ismaili Community with approval and encouragement from its Spiritual Leader Aga Khan broke traditional bonds and allowed education for Boys and Girls on equal terms. The Community after gaining more than 90% literacy rate further encouraged its male as well as female members to take up technical education like Nursing, Lab technician, Computer Operators etc and also allowed them to take up well paying jobs in rest of the Country. These well paid jobs have lifted lot of the families out of poverty trap as for century member of these families worked as Laborer and subsistence Farmers, which gave income for day to day survival only.   
Shia and Nurbakhshi Communities have rapidly advanced in Education and Healthcare but lag far behind Ismaili Community. Their Leaders could not muster moral courage to give same kind of trust and respect to their female members as was given by Ismaili Leaders. They did not allow their female members to go for education beyond middle level or take up jobs even within their own Area.
Sunni Community is the most backward Community. Without Central Leadership this Community within CGB like rest of the Country refuses to break the old tradition and have kept the Woman folk firmly locked up at home and allowed their Male members to mainly content with Religious education.
Notwithstanding the evolutionary stage of the each Community, the role of NGOs and their penetration in each Area can not be over emphasized. Government was undecided about the fate of the Region in the broader context of Kashmir dispute. NGOs led by Aga Khan Foundation Organizations played a vital role in the upliftment of this naturally poorest Region of the Country. NGOs helped build Schools, Hospitals, dig Canals, build Dams and lay  Roads for access to the Markets, build community Markets, establish Community Marketing networks, build small workshop and factories and help find markets for Regional products in rest of the Country.
The efficiency of these NGOs particularly those funded by Aga Khan Foundation, was remarkable as they always worked in Consultation with Communities. They let them decide the priorities ensuring the interest of the largest number of Community Members was served instead of a Local influential. By so doing  the benefit derived from development funds was 10 times more, if the same work  was done by Government Servant; deciding priorities themselves. The achievements are simply marvelous and worthy of copying in other underdeveloped regions of the Country.
Pivotal Role of AKRSP:
AKRSP employed all tools to uplift the Region. First it offered infra structure projects to Communities on the condition that they provide free man power and maintain the project from own recourses,  Second it encouraged formation of Village and Woman organizations to look after the projects and promote Savings and later lent money to members on the collective security of these organizations .Third it developed Medium size enterprises to use local resources and develop markets, Forth it started Micro credit services to build entrepreneur class later this function was taken over by First Micro Credit Bank.  The overall impact of these four initiatives was very impressive as the data below taken for the book “Valleys in transition” reveal. The data are only for period 1982 to 2002:
Some remarkable achievements were:

1. Between 1994 and 2001 Poverty in the Areas were AKRSP worked dropped from 54% to 34%.
2. Per capita income (Base year 1991) improved from Rs 2,939 in 1991 to Rs. 6,198 in 2001.
3. Percentage of people living below Poverty Line dropped from 67% in 1991 to 34% in 2001.
4. Similarly Depth of Poverty dropped from 0.53 to 0.38, Intensity of Poverty from 0.36 to 0.13 and Severity of Poverty from 0.75 to 0.27 between 1991 and 2001.
5. During this period a class of New Professionals and Successfully Diversifying Farmers, occupying 60% of total emerged while prior to that only a Narrow Elite (6%) and 94% Peasant, Sami Pastoralist Class existed.

Productive physical infrastructure projects by region
(as of December 2002)

Projects initiated                                                              748               873               923                    2544
Cost of projects initiated
(million rupees)                                                           327.71           397.33            310.30              1,035.34
Beneficiary households                                                86,282           57,569           63,326              207,177

Infrastructure portfolio by sector and region

Irrigation                                                                                345               300                412            1,057
Communication                                                                     115               200                141               456 
Micro Hydel                                                                            7                 153                11                 171

Percentage share of per household farm income:
Programme area and the regions, 1991-2001

1991                        24                                            29              17                12                  39
1994                        56                                            52              59                 60                 61
1997                        55                                            56              50                 53                 58

Trends in average annual household farm and off-farm incomes in the programme area

                                                       Off-farm as a Percentage of

1991            6,414           20,434                76%                             26,848                    2,939
1994            28,499         22,050                 44%                            50,549                    3,976
1997            48,771         40,649                 45%                             89,420                   4,851

                   
Role of  AKRSP in Enterprise Development:
AKRSP’s experience in Enterprise development did not prove that successful as it’s infra structure development initiatives through Village Organizations and Women Organizations. In the absence of government, it was felt that something must be done to develop some larger scale businesses that require substantial capital to stimulate economic development in the Region. Thus AKRSP by year 2003 spent Rs 103 million on 3 enterprise developments with mixed results.

 Dry Fruit Project (DFP):
Costing Rs 4 mio benefitted 500 families and helped improve Dry Fruit prices by 100% as lucrative market was found in UK. DFP apricots have established a brand name within the Country and abroad.  

 Shubinak Project (SP):
Costing Rs 38 mio benefitted over 4,500 people. The project   aimed at improving women income, by better marketing, from making SHU or wool based products also proved successful as it improved price by 100% due to demand generated by the initiative. However SP’s attempt to market its product as Premier product to fashionable elite in South and abroad did not prove successful and it costed them Rs 26 mio. The product was mainly appreciated by Local landlords and Tribal Chiefs of the mountain and Tribal Areas of Pakistan.

North South Seed (NSS):
Costing Rs 60 mio benefiting over 500 farmers (50% women) was another project which did not do so well due to lack of proper research. Although the market for seed was large Rs 260 mio NSS, could not gain its share as it failed to produce the wide variety and lack of R&D.  At the end of 2002 NSS remain unprofitable and the prospects are bleak.

Reshit Coal Project (RCP):
Rs 6 mio was spent on this project to mine 12,000 tons of coal annually. However the geological survey proved to be of poor quality and AKRSP was not ready to spend more on this project.

AKRSP success and failures:
It is noted that while AKRSP was successful in supporting VO, WO, Trade Associations it failed when it came to running business themselves. For example it helped in the formation of Cherry and Apple marketing Associations and value of export of these products increased 189%. Similarly AKRSP helped in formation of Baltistan Gems Association (BGA) which sold gems worth Rs 3 mio in three days during an Exhibition in Skardu in 2002. Chitral Association of Mountain Area Tourism (CAMAT) is another example of successful initiative. CAMAT is now playing a major role in developing tourism with the help of UNICEF. AKRSP also facilitated Orix Leasing Limited to launch its product in the Region.  This has proved a major initiative and benefiting in development of local entrepreneurs. However an initiative to bring in SME Bank to launch Graduates Business Promotion Scheme (GBPS) proved unsuccessful, as due to Management change, SME changed its mind after AKRSP had spent money training potential borrowers.
On the whole AKRSP efforts may be judged very positively if you consider that it was making efforts in a very difficult and marginal part of the Country and often it did take initiatives which it would have avoided if other players were in the market. As sole provider it did a remarkable job as the date below demonstrates:       

Cumulative achievements in enterprise development:
Programme area and the three regions (as of December 2002)

Serial                                                                    Programme

1             No. of viable enterprises supported         626                350               264               12
2             No. of entrepreneurs trained (males)       2,309              548            1,087             674
3             No. of entrepreneurs trained (females)    2,409            1,000              841             568
4             No. of enterprises adopting micro-tech.   316                  49                 8                258 
               / new skills 
5             No. of male entrepreneurs provided        11,473          4,405           2,977            4,091       
                Loans
6            Amount of loans disbursed                      297.17          135.07         74.06             88.04  
               (Rupees in millions)
7            No. of female entrepreneurs provided      1,357             249               745               363
              Loans
8            Amount of loans disbursed                       25.58             5.86             12.08             7.64

AKRSP ROLE IN MICRO FINANCE:
AKRSP stressed on need for mobilization of saving at Village Organization VO & Woman Organization WO level since 1982 and it reluctantly and gradually went into lending operation. It was felt that no matter how small each member of the village organization should save some thing. The funds so generated were deposited in Banks at good interest rate collectively. AKRSP acted as a binding force and a co signatory in the accounts. Withdrawal of deposit was not allowed.  
AKRSP lent Rs. 1.7 billion to 600,000 borrowers between 1983 -2002 out of which 99% was recovered. Interest rates up to 24 % were charged on these loans. Woman proved better credit in this Region as borrowers. The default rate was 48 % in Biltistan, 24 % in Gilgit & 18 % in Chitral. Defaulted amounts were recovered from the deposits in VO & WO concerned as they stood guarantee of the borrowers from these organizations. This hurt the normal savers and led to separation of many VO and WO from AKRSP and they started their own Lending Operations. AKRSP created in Jan 2001, First Micro Finance Bank (FMFB) to take over its credit activities. FMFB now competes with numerous VOs and WOs for business besides the larger formal lending institutions. 

Loan Sources                                  Gilgit                                      Chitral                    Biltistan

Government Agencies       1.8                   0.4                               0.1                                0.0
Commercial Banks          45.0                   7.1                               8.0                                6.5
Co-operatives                    0.0                    0.3                               1.2                                0.1
AKRSP                             21.7                  50.6                              43.5                             21.4
Friends                               6.2                    6.0                              15.4                             43.6

                
Conclusion and Recommendation:
Among the many spectacular blunders we committed as a Nation since 1947, we must add the neglect and confusion about the fate of Northern Area. While we could not decide what to do about this vast Region; others took advantages and entrenched themselves in such a way that if they want they can oust us from the Area. If we take a chance and go for an UN organized plebiscite with an option to create a separate State of Kashmir, there is 80% chance that people of the Area will take that option. Creation of a Shia State in such a strategic point will be a dream come true particularly for the Ismaili Community who have no territorial base in the World at present. Such a State is likely to be dominated by Ismaili Community given their strong  Leadership and organizational skills as already demonstrated by Aga Khan Foundation Organizations in the Area.

It is therefore recommended that we forget about taking over rest of Kashmir and put all our energy and money in saving what we have. Creation of GB province is move in the right direction and now should be followed by increasing funding for the Area from current Rs 12 billion to say Rs 200 billion.

People of the Area must be assured that their kind of Islam has a place in Pakistan. For this all narrow minded laws made during Zia’s era which has brought fear in the hearts of Minorities and slightly divergent follows of Islam must be repealed. Failure to do so may result in a smaller and restive Pakistan. A secular and liberal Pakistan is a must for our survival in the present size and shape. Toleration of wide range of religious practices and respect for others way of life is mandatory requirement for being part of the wider World today. We can not allow a small minority of not more than 15% of the population push us in extreme path which will make it difficult for us to survive as a nation and part of the World community.