JANUARY 28, 1985


Speaking to an audience of 200 business leaders in Zurich (Monday, January 28) Mowlana Hazar Imam called on industrialised nations to expand their economic activity in the countries of the third world.

"Over the past decade initiative has demonstrated its genuine potential as a major instrument of development throughout the third world" said Mowlana Hazar Imam in a speech to the Swiss-American Chamber of Commerce. "If it can avoid abuse and greed, private enterprise can unquestionably give the social and economic systems of the developing world, the balance which modern civilisation demands."

Referring to the experience of the Ismaili Imamat's activities through its health, education and economic development institutions, Mowlana Hazar Imam said that the dogmatic approach to political philosophy and the governmental attitudes which had characterised the post - independence period of the 1960s in many ex-colonies has now been modified. With more nations attaching a positive premium to the work of creative people and institutions, this new pragmatism would have no impact, Mowlana Hazar Imam said, unless those countries correct what has recently been a disabling environment into an enabling one.

"The key objective for the remaining decade of the twentieth century in the developing countries, should be the creation of an environment in which every resourceful, hardworking person or entity will be able to function in a context that encourages and rewards initiative."

Mowlana Hazar Imam said that considerable potential for growth in the economic sector existed between the large scale parastatal or multi-national corporations and the small scale local firms, especially where the enterprise is capable of rapid expansion, and where it has special innovative characteristics or high technology which can be assisted through fresh capital and expert advice, rather than interest-bearing loans.

One way to assist the development of this intermediate sector, Mowlana Hazar Imam said, is through active participation where foreign or local investors, institutional or private, acquire equity, take board positions, provide financial and advisory services and organize the training of executives, in other words, act as partners in all the key areas of decision-making.

Earlier Mowlana Hazar Imam had spoken of the economic development activity of the Imamat such as the Industrial Promotion Services, Tourism Promotion Services and the various Financial Development Institutions and how they would come under the newly created Aga Khan Fund for Economic Development. Mowlana Hazar Imam said that while profit oriented, when considering projects likely to contribute significantly to a country's development, the Fund's mandate would allow a longer term view than normal investors can take. Whereas most agencies concentrate on the provision of loan finance, the Fund's support, Mowlana Hazar Imam stated, would be heavily weighted towards equity.

"Hence the Fund is unusual, if not unique, in that 94 per cent of its current investment is in equity participation."

Indicating the area of infrastructure schemes, such as communications, housing and irrigation, as another area of development potential, Mowlana Hazar Imam said far too many development schemes in the past have been capital intensive and geared to Western urbanised economies with which the donor countries are familiar, instead of the predominantly rural societies of the third world. In this context, referring to the positive experience of the Aga Khan Rural Support Programmes in Pakistan and India, Mowlana Hazar Imam said "It is essential for aid to motivate rural people to help themselves as well as providing seed and fertilisers and tools." Source: U.K. Ismaili

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