ECONOMIC DEVELOPMENT
INDUSTRIAL PROMOTION SERVICES
BACKGROUND INFORMATION
As the Imam of the Ismaili Muslims, the Aga Khan is concerned not only with the spiritual well-being of his Community, but also with their material welfare. In this sense, the Aga Khan directs an increasing number of economic development organisations whose benefits are available to all. In 1963, he created Industrial Promotion Services (IPS). The organisation was the outcome of a special economic study commissioned by him in the early 1960s in a number of countries in Asia and Africa. The study conclude that there would always be a distinct need for broadly-based private initiative in the national development of these countries. As a result, IPS was launched specifically to help in promoting and developing local industrial, commercial and agricultural activity.
With its parent company in Switzerland, IPS today has individual national companies in Bangladesh, Pakistan, Kenya, Tanzania, the Ivory Coast, Zaire and most recently in Canada. Since its establishment, IPS has been committed to the furthering of economic activity through the stimulation and promotion of productive private enterprise. In pursuing this general objective, IPS has demonstrated flexibility in its approach. Depending on the need, it can and has acted as a promoter, developer, financial partner, coordinator, consultant or management resource, tailoring its role to meet the needs of each specific project.
In an effort to stimulate economic development, IPS promotes industrial, financial, tourism and other projects by bringing together modern management, advanced technology, as well as local know-how, applied to suitable investment packages. With the participation of private investors, both foreign and local, of government and international bodies, IPS has launched over 100 enterprises in this way, ranging from building materials and textiles to mining and tourism, which today employ some 10,000 people.
IPS also participates in joint development ventures. Among the first of these broadly-based joint ventures was the IPS sponsored development of the Serena Hotels and Lodges group in Kenya. IPS secured, for this project, loans from the International Finance Corporation (IFC), an affiliate of the World Bank, and brought together a group of investors including Lufthansa, British Airways, the then East African Airways, Intercontinental Hotels, Avis and Government's Kenya Tourist Development Corporation as well as two local financial institutions, the Diamond Trust of Kenya and the Jubilee Insurance Company. Consisting of a major city centre hotel in Nairobi as well as a beach hotel near Mombasa, and two lodges, in the Masai Mara and Amboseli wildlife reserves, this development let to the creation of Tourism Promotion Services (TPS) in 1971. TPS is currently involved in a number of tourism projects in various countries including Turkey and Pakistan. In March 1983, the Aga Khan will lay the foundation stones for the new Serena Hotels at Quetta and Faisalabad.
IPS also participates in the promotion of development institutions. One example is the creation of the Industrial promotion and Development Corporation (IPDC), in Bangladesh in October 1981, where IPS joined with the international Finance Corporation (IFC),
the commonwealth Development Corporation (CDC), the Deutsche Entwicklungsgesellschaft (DEG) and the Government of Bangladesh, to establish a new national development agency.
IPS has recently taken steps to increase institutional participation in its companies, expand its areas of activity and draw on wider international and local experience. In July 1982, for example, and agreement involving equity participation was signed in Nairobi where the International Finance Corporation, Finance for Industry Ltd. (FFI) and the Kenya Commercial Finance Co. Ltd. (KCFC) took up an equity participation in IPS Kenya to enable it to play and expanded venture capital role in the development of the Kenya economy.
March 1983