Market God Introduced to Northern Areas

During the four decades of international assistance and development programmes in the Himalaya and adjacent mountain regions, amidst failures all around, some projects have received high praise. With this look at the AKRSP in Chitral and Gilgit, Himal begins an occasional series, "Questioning Success", to see what makes for success, and the prospects for reproducing success.

Celebrating his 75th birthday in 1940, Aga Khan III weighed himself against a load of gold and jewellery and donated the treasure to start an educational programme. That act of philanthropy marked the beginning of the Aga Khan welfare activities in a corner of the Central Asian highlands — today's Northern Areas of Pakistan, which has a large population of his followers, the Ismailis.

With its focus on education, the Switzerland-based Aga Khan Foundation established more than 150 schools in the Northern Areas. Most were for girls, as existing governmental schools served only boys, according to prevailing Islamic tradition. In 1960, the Foundation began public health-related activities in Chitral, extending it to Gilgit a decade later. The health programme, like the Foundation´s work in education, tried to complement government activities, filling in the gaps in delivery. Again, the health programme targeted to serving women's needs.

In 1980, the Aga Khan Education Service was joined by the Aga Khan Housing Board, which concentrated on construction work and training local people in the crafts. The Foundation's work came full circle in the December of 1982, with the establishment of the Agha Khan Rural Support Programme (AKRSP), whose mandate was to generally provide rural development services as a non-governmental and non-denominational undertaking.

"The proclaimed task of this newcomer organisation was to help improve the quality of life of the villagers of Northern Pakistan," says Shoaib Sultan Khan, who served as General Manager of AKRSP for many years and has now been asked by the Islamabad Government to take the AKRSP concept "to scale" nationally (see Himal, Jan/Feb 1993).

From its base in Gilgit, the capital of the Northern Areas, AKRSP directs, supervises and coordinates an ever-larger network of projects, covering nearly the entire high desert which forms the Pakistani part of the former Jammu and Kashmir. These are the old districts of Gilgit, Chitral and Baltistan, with a combined population of about 800,000 in nearly a thousand villages. The economy is almost entirely subsistence farming, and 90 percent of the inhabitants are smallholders with less than two acres of irrigated land per family.

The Northern Areas suffer an acute lack of irrigation water, firewood, and fodder in wintertime. As a consequence, there is poverty all over, characterised by extremely low literacy and educational standards. Off-farm work is not available and the per capita income is far below Pakistan´s national average.

Faced with such conditions, AKRSP's goal has been to increase cash income as well as integrate the Northern Areas´ market with the rest of the country in order to relieve the sociocconomic burden on the population. Says Khan: "The three principle objectives are the raising of income and quality of life, the development of institutional and technical models for an equitable development, and evolving sustainable, longterm strategies for productive management of natural resources in the dry and fragile mountain environment." This means that AKRSP concentrates its efforts on transforming the subsistence agriculture-based society into a market- and cash-oriented economy, one that is integrated to the national economy by marketing agricultural surplus.

Several steps have been taken to realise these goals. When AKRSP arrives in a community, it first helps establish a village organisation (VO), whose task is to fill the institutional gap that emerged after the local chieftainships were abolished in 1972. It is in these community organisations that the crucial local decisions are taken, such as the choice of the first Productive Physical Infrastructure (PPI) project. A PPI tends to be an irrigation channel, a link road, or a bridge, and the first one generally comes as a gift from the AKRSP to the community, and villagers who contribute labour are paid. Further infrastructure projects are subsidised by AKRSP, bu tmainly financed through community savings collected in village meetings. The expectation is that the village organisations will develop as viable social institutions, through which villagers can determine their own destiny far into the future.

AKRSP's activities go far beyond the infrastructure development which should, of course, be the job of the Government. Besides building roads, canals and bridges, the Project is also involved in agriculture, livestock, forestry, commercial and industrial development, women, credit and general finance, as well as human resource development.

Great Game

In all its work, the AKRSP tends to be "remarkably successful", as attested by evaluation reports of the World Bank as well as of the German Ministry of Economic Cooperation. Success is measured in the number of village organisation and their membership size, rise in |community savings and per capita income, and the rate of project completion, which is exceptionally high in the Northern Areas. It is clear that AKRSP´s focus on filling in the gaps in development delivery has avoided duplication and done away with needless acrimony that might have arisen with other agencies.

What is the secret of AKRSP's success? What does the Project do differently from most other development programmes in the mountains and plains of South Asia? Siegfried Schoner, an expert with the German Institute of Economic Research, points to the unprecedented religious legitimacy that the Project has in the Ismaili community, which is quick to accept it. Thus allowed to function as a successful demonstrator, the Project´s activities tend to be easily accepted by the Shias and Sunnis as well.

This process is also made smooth by the Project's non-denominational approach, which allows all Islamic communities to take part, and because of the participatory decision-making that is encouraged. Finally, the multiethnic composition and reliability of the AKRSP staff contributes to positive results. The final proof of acceptability was provided recently when even the Sunnis of Astor valley at the foot of Nanga Parbat, who had till recently been wavy of AKRSP, demanded the project's help.

In evaluating AKRSP's work, it helps to remember that its financing is independent of the Pakistani Government exchequer. Besides the Aga Khan Foundation, the Project receives generous support from donors such as the Canadian International Development Agency (CIDA), the British Overseas Development Administration (ODA), the Dutch Government and the German Adenauer Foundation.

CIDA alone transfered about Pakistani Rs 20 million to AKRSP, and the Dutch Government and ODA each give about PRs 16 million annually. Add to this other sources as well as the Foundation's sizeable contribution, AKRSP's yearly collections total more than PRs 100 million, or almost U$ 5 million.

Financial solvency seems to have a lot to do with the continuing success of AKRSP even as numerous equally well-meaning projects elsewhere in the mountains are moribund or have collapsed. Availability of cash has made an important difference for AKRSP. Among other things, it also allows the Project to run its own helicopter service, connecting the Gilgit headquarters with the project area as well as Islamabad, bypassing landslide prone highways and notoriously unreliable PIA flights.

Integration or Entanglement

The Project's principle strategy of economic integration has generally gone unquestioned. Whether to call a development project 'successful' depends first upon one´s understanding of ´development´. If the villagers' cash liquidity and growth-orientation arc to be the tests, then AKRSP is taking huge strides towards fulfilment. In fact, the transition of the Northern Areas into a cash economy is progressing, with Gilgit, Chitral and Baltistan rapidly becoming part of the larger Pakistani and international marketplace. The question, then, is whether this is economic integration or an entanglement that only creates new dependencies for the local inhabitants.

A AKRSP social organiser, talking to a community group, might sound like this: "Why grow wheat and maize? You should use your land instead to grow marketable produce such as potato seedlings, vegetables and dried apricots. Grow cashcrops, sell them at the bazaar at Gilgit, and use the money to buy the grains that you used to grow before. You should produce what you can produce best according to the natural and social conditions of your area. You will find there is still money left after you have bought the amount of grain you formerly harvested from the Fields. The remaining money can now be used to buy clothes, school materials for your children…"

The invitation is to participate in the new Great Game known as the World Market, to act upon the principle of Comparative Advantage. Forget about subsistence farming and welcome to the cash economy — this is AKRSP's economic message.

In making its strategy, the Project was obviously influenced by the completion of the Karokaram Highway in the late 1970s, connecting down-country Pakistan with the highlands of the north. Following through on its message, AKRSP encourages communities to save part of their cash income, organises bulk purchase of fertiliser and other essential goods, and propagates market strategies.

There are hazards to such a plan of action which have not been properly analysed. The security of the family´s nutrition from its own fields is being given up for the benefit of the marketplace. A double-dependency is being created. On the one hand, the Northern Areas farmers must be sure that they will in fact find a sustained demand for their products and a guaranteed minimum income level. Tt is not clear that such guarantees are feasible.

On the other hand, the supply of Government-supplied subsidised food from down-country must be reliable, as food shortages could quickly lead to famine conditions. Given the Toad situation on the Karakoram Highway, this dependence on down-country begins to look risky. In a way that was never true before, the health and well-being of the population of the Northern Areas will begin to depend on drought and flood conditions on the Punjab plain.

AKRSP is hardly a failure, especially when compared to so many other attempts at integrated hill development At the same time, the jury is still out on the Project and awaits a better definition of how one measures 'development', and hence a 'development project'. Does one deal with reality, or simply the ideal. Perhaps it is, as Voltaire had Candide say, "…the best of all possible worlds" — the best of all possible development strategies. Measured to that ideal, AKRSP – the Aga Khan Rural Support Programme — loses some of its glamour.

Hoffmann worked in the Northern Areas in 1991 and is presently studying migration in eastern Nepal.