He put forward his views in a speech in London last month, as the guest of honour at the prestigious annual dinner of the Royal Society for Asian Affairs. He spoke on the theme, Good Governance and the Civil Society.
Some 350 people, including government officials, diplomats, development specialists, academics, journalists, business people and civic leaders, attended the gathering at the Savoy Hotel.
Mawlana Hazar Imam emphasised that good governance - implying institution-building, the mobilisation of people and self-sustainability - was crucial to the creation of circumstances which would allow government, private enterprise and the voluntary sector to work together for development - what he called an "enabling environment."
Country after country in Asia had been able to create an enabling environment, to release the creativity and energies of its peoples.
Mawlana Hazar Imam said the recent political changes in the former Soviet Union - bringing eight new countries into the Asian community of nations - contributed to the challenges and opportunities facing Asia. He said the Central Asian republics faced an especially difficult future.
Many other Asian countries, he said, were struggling with the transition from authoritarian or military regimes towards a civil society. Poverty, the status of women, environmental degredation and human rights remained vital concerns across the continent.
Mawlana Hazar Imam said that the last two years had shown the world with dramatic force that the civil society was more than unitary state. Rather, civil society was properly recognized to be a pluralist collection of the groups, associations and localities in which we actually spent our lives.
"Many developing countries are moving in this second direction. I applaud their courage, as I am convinced this is the way forward."
"Development is ultimately about people, about enabling them to participate fully in the process, and to make informed choices and decisions on their futures."
This required a creative and supportive partnership between government, private enterprise and the voluntary sector.
Mawlana Hazar Imam said that the rules of the game for the enabling environment - the legislative and policy framework - should be provided by government. It should also invest in people and infrastructure, to the extent that resources permit.
The business sector was the principal engine of growth to create these resources, and the voluntary sector could serve to bring people together to meet an enormous range of social needs.
"To create a pluralistic civil society, private institutions must be established that meet the needs of their constituent groups. The state cannot do it all."
"To be successful, these private institutions must meet two conditions: their members must have a sense of common purpose, and those members must be organised so as to achieve that purpose.
"Good governance involves both this common purpose and this effective organisation.
"Moreover, good governance is likely to be achieved only by organisations nurtured by an enabling environment, where the laws of the state encourage private enterprise, diversity of initiatives, and voluntary not-for-profit organisations."
Mawlana Hazar Imam said that the governance form of the monopolistic, parastatal corporation was not conducive to effective development, and he asked what alternative forms of governance were likely to provide the highest probability of success.
Mawlana Hazar Imam gave the audience a brief background to the Ismaili Community, and outlined why he, as the Imam of the Shia Imami Ismaili Muslims, was involved in development.
He said that his responsibilities as Imam concerned not only interpretation in matters of faith to a broad diversity of people residing in more that 25 countries, but also relating that faith to the conditions of the present.
Drawing on the experiences of the Aga Khan development network, Mawlana Hazar Imam outlined the various elements of effective organization.
These included defining the institution's mission, setting strategic directions, mobilising necessary resources (money, but even more importantly, trained people) and being accountable for results.
Mawlana Hazar Imam said the Aga Khan development network was fortunate to be associated with excellent companies in South Asia as well as in East and West Africa.
The Aga Khan Fund of Economic Development (AKFED) had helped to foster industrial projects, tourism, financial institutions and venture capital.
"AKFED is designed to take a long view of the prospects of the companies with which it is involved.
"It takes equity positions in these companies, rather than providing loans. It plays an active role in helping to strengthen the governance of these companies."
The contribution of good governance to the success of private enterprise was also recognised by the World Bank's International Finance Corporation and the Commonwealth Development Corporation, both active partners of AKFED.
Mawlana Hazar Imam said that experiences with the Aga Khan Health Services and the Aga Khan Education Services had shown that these same principles of good governance applied to the voluntary sector as well.
Mawlana Hazar Imam gave examples of the work of the Aga Khan Foundation in northern Pakistan. The Aga Khan Rural Support Programme (AKRSP) reached nearly one-million people scattered over an area the size of Ireland, dominated by the highest mountains in the world.
Participants in the programme had now accumulated substantial savings. The village organisations were now reaching out to protect their environment, and to establish and largely pay for schools and medical centres.
Mawlana Hazar Imam mentioned how the World Bank had singled out the AKRSP's flexibility, responsiveness and ability to change directions. It also found value in the governance techniques that the AKRSP used in creating village organisations.
Mawlana Hazar Imam said that transforming the perception of rural people about their destiny in rural areas was one of the most critical development needs, if the destructive rush to urbanisation was to be slowed down.
Whether the vehicle was culture or private enterprise, health or education, Mawlana Hazar Imam said the development needs of Asia would require good governance and a civil society.
Finally, Mawlana Hazar Imam posed the question: "If local needs are best solved locally, what role can the West play in fostering development in the Third World?"
In addition to encouraging good government and good governance, donors would do well to shift the form of their support from project-specific grants to the creation of a permanent flow of resources under local control.
"The building of endowments would allow the governing bodies of these institutions to continue to supplement local self-help funds, but would clearly put decision-making and accountability where it must be for long-term success: with the local voluntary organisation itself.
"Such an initiative from the West would also set an example of philanthropy to local industries and would encourage local governments to pass legislation to encourage donations," Mawlana Hazar Imam said.
The Royal Society for Asian Affairs was founded in 1901 to promote greater knowledge and understanding of Central Asia and surrounding countries. With the passage of time, the area has been extended to include the whole of Asia, from the Middle East to Japan. Its patron is the Prince of Wales.
(Source UK Ismaili March 1992)
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