FEBRUARY 15, 1987


Profile: Pranay Gupte

The Ismaili sect, with its social and theologically liberal outlook, is probably the most progressive in the Islamic world. Spread over four continents its adherents are guided by their high profile Imam, Prince Karim Aga Khan.

Pranay Gupte profiles the life and philosophy of the unlikely patriarch. And his image of a new world order based on free enterprise.

The name Aga Khan' conjures up for most people images of a suave figure at the races, savouring yet another triumph by one of his 450 thoroughbreds. Or skiing down the slopes of some fashionable resort. Or yachting off the Costa Esmeralda on Sardinia. Or they picture a polished businessman globesetting to inspect his showpiece investments, along the way hobnobbing with highly placed politicians and captains of industry. The images aren't exactly fantasy: in real life, the Aga Khan does all of these things with a style that dazzles chroniclers of haute society. He turned 50 on December 13, he is one of the world's wealthiest men, and he is the possessor of one of its most famous faces and pedigrees.

The Aga Khan is also the hereditary Imam, or spiritual leader, of 15 million Ismaili Muslims, who are scattered around North America, Western Europe, Asia, and Africa, and who regard him with such reverence that his photograph adorns every Ismaili household. A Harvard graduate, he is fluent in six languages. His homes around the world are museums unto themselves, containing priceless Islamic are and antiquities whose provenance the Aga Khan can explain with scholarly commentaries.

The popular perceptions of his eclectic life sometimes contain the notion that the man himself is flamboyant, a show-off maybe. Far from it. Prince Karim Aga Khan does not drink, nor does he bet: he remains solidly married to his English-born wife of almost 20 years, who has borne him two sons and a daughter. He is friendly but also a bit reserved, a man whose modesty and good humour immediately impress a visitor.

If his lifestyle is excessively peripatetic, it is largely because of something that has long been his obsessive concern - the Third World. What is not generally known about the Aga Khan is that he and his Imamate institutions are possibly the biggest private donors to the Third World. He is a strong promoter of the private sector in a Third World where left-of-centre shibboleths are still more in vogue than sensible economic policies. He has long been a critic of state-controlled economies that fatten bureaucracies at the expense of real growth. He is an indefatigable campaigner for better health and education projects, especially in rural areas. He periodically sponsors global conferences where the main theme is the need to emphasise the role of private enterprise in Third World development. He has established a news agency in Luxembourg that offers features relating to the Third World: he gives triennial architectural awards totaling $500,000; he has set up an Islamic architecture programme at Harvard and MIT, the first of its kind anywhere in the world. And not long ago he built a $300 million university and teaching hospital in Pakistan.

The Aga Khan and the various Imamate institutions under his control contribute more than $100 million annually to Third World development activities through investments, charities, and grants. He directs more than 60 companies, who employ more than 10,000 people in countries ranging from Bangladesh to Zaire. He is now participating in a new $50 million growth fund that will invest in emerging securities markets in developing countries {the fund's initial capitalization includes subscriptions from institutional investors in the United States}. He is accelerating his entrepreneurial commitments in the Third World because he believes that, at long last, more and more governments are recognising the value and necessity of pushing the private sector in order to improve the living conditions of their people.

"The only answer for the Third World, in my view, is for it to become more productive - and the way to achieve that is by encouraging both local and international investment, especially in rural development," he said in a rare interview at his estate in Gouvieux, not far from Paris. "State-owned enterprises can seldom be a total substitute for private sector initiative in building the infrastructure of a nation's economy. A developing country cannot afford the burden of loss-making enterprises.

The Aga Khan believes quite devoutly that risk capital is a better agent for development in the Third World than loan capital. "When risk capital is involved, investor commitment is higher, as is the likelihood of technology transfer," he said.

And so his Aga Khan Fund for Economic Development - the Geneva-based umbrella organisation which oversees his global investments - has encouraged joint ventures with various companies in fields ranging from building materials to mining to textiles to tourism.

The Aga Khan is not a recent convert to the currently trendy theme of development experts'- the private sector. His involvement with the Third World dates back nearly three decades, when Prince Karim became the 49th Ismaili Imam in a continuous line traceable to the Prophet Mohammed. Like other Shia Muslims, the Ismailis believe that after Mohammed's death his cousin - and son-in-law-Hazrat Ali became the first Imam of the Muslim community. The Imam enjoys the prerogative of appointing his successor, a male who usually is selected from the leader's family.

Prince Karim succeeded his grandfather, Sir Sultan Mahomed Shah Aga Khan, a distinguished statesman who once was president of the League of Nations but who is probably better remembered for the occasions when his followers placed him on huge scales and gifted him precious stones, gold and platinum equal to his weight. Sir Sultan chose Prince Karim to be his successor over Karim's father, Prince Aly Khan, whose lifestyle was reportedly viewed by Sir Sultan as too frivolous and controversial (he was once married to the actress Rita Hayworth, and later perished in a fiery crash of his sports car outside Paris). Prince Karim, the son of Aly Khan and his English wife Joan, was still an undergraduate at Harvard majoring in Islamic history, when Sir Sultan died after serving 72 years as the Aga Khan.

Implicit in the selection of Prince Karim was his predecessor's hope that the new Aga Khan would provide Ismailis with an energetic leadership that took into account the changing economic and social concerns of the Third World's newly emerging nations. Sir Sultan wrote in his will: It is in the best interests of the Shia Muslim Ismaili community that I should be succeeded by a young man who has been brought up in the midst of the new age and who brings a new outlook on life to his office of Imam.'

The new Aga Khan plunged into Third World matters with great zest. Continuing his grandfather's commitment to social and economic progress of the Ismaili community, he built schools, health clinics, housing projects, and industrial development parks in Pakistan, Syria, Tanzania, Kenya, India and Bangladesh. In the early 1970s, he had to contend with the sensitive and traumatic problem of the expulsion of Asians - many of them Ismailis - from Uganda by the then dictator, Idi Amin Dada. The refugees settled in Europe, Canada and the United States, and, with the Aga Khan's initial assistance, quickly prospered in their traditional roles as traders, merchants, and professionals.

The Ismailis continue to be perhaps the most theologically and socially liberal community of the world's 800 million Muslims, and their deportment and achievements - not the least because of the Aga Khan himself - have done much to improve the global image of Islam.

The nerve centres of the Aga Khan's operations are located in Geneva and in Gouvieux. His secretariat in Gouvieux, housed in an elegant chateau that is surrounded by thick woods and grassy knolls, contains some 100 staff members, many of them non-Ismailis. The Aga Khan is often asked whey, when the majority of Ismailis live in the Third World, his own headquarters are in the West. His response: "The reason is simple. My grandfather believed that the Third World, and more particularly the Islamic world, would make far more rapid progress if they were able to learn the lessons of the industrialised nations. Hence many of the development strategies such as cooperative banking and housing which he introduced to the Ismaili community were based on western models." There is also the fact that Switzerland and France offer more stable political and economic environments.

The Aga Khan feels that increasingly developing countries are transforming their attitudes concerning the private sector's participation in economic development in the Third World. "There is a new sense of pragmatism in the developing world," he said. "This pragmatism recognises that dogmatic approaches to political philosophy and economic development haven't worked. I am particularly pleased that long held suspicions about the private sector are melting away."

But for private enterprise to flourish, Third World states must create what the Aga Khan calls an enabling environment' to replace the disabling environment' currently prevalent in many developing countries. "By a disabling environment I mean a political and social situation in which legal restrictions or prejudice shackle enterprise, in which land or buildings are summarily expropriated, expatriate work permits denied, or the remittance of expatriate salaries refused, trade preferences rescinded..."

The enabling environment', on the other hand, is one where the rights of entrepreneurs are guaranteed and protected by law, and where a system of incentives is securely in place so that managers, teachers, physicians and nurses don't abandon their native countries for more lucrative places in the West.

Nevertheless, the Aga Khan feels, no development policy in the Third World can genuinely succeed unless increased attention is paid to the rural sector. Noting that 80 per cent of the world's population lives in non-urban areas, he said: "I am not convinced that Third World planners and developers have an in-depth understanding of rural priorities and perceptions. People in rural areas have an inherited understanding of the issues that affect them most. They are often free from many of the ideological concepts that may affect urban populations..."

The Aga Khan cites some of his rural-support projects, such as ones in the northern areas of Pakistan and in India's Gujarat state, where grass roots organisations have been established to identify local health, education and employment needs. As a result, subsequent investment in relevant development schemes has tended to be efficient, profit-making for the local units, and ultimately self-sustaining.

"Any development agency, whether private or national or international, has to make sure that the work it instigates is a permanent contributor to the improvement of the quality of life in a region." The Aga Khan said.

He feels that perhaps the greatest obstacle to rapid development in the Third World continues to be political dogmatism.

"All in all, I feel that this is a moment of opportunity for fresh thinking about development and about the need for an enhanced private sector role in the Third World," the Aga Khan said. "I see it in historical terms. It is a moment of opportunity created by a number of forces - some successes in the Third World where private enterprise has flowered, some failures, plus a very radical change in the world economy. We must get a grip on the forces of change."

The message to the Third World: Don't blow it this time.

Source: The Illustrated Weekly of India

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