After The Flood

Ordinary folks are, once again, dipping into their pockets to help out the victims of a natural disaster but once the waters have receded in Pakistan what will happen not just to those affected by the floods but the tens of millions trapped in grinding poverty?

It is a question that we posed earlier this year after the catastrophic earthquake in Haiti. Yet, for all its problems, the challenge in Haiti pales in comparison to the obstacles in the way of the poor of Pakistan. Here is a country that has received billions of dollars of aid over the last thirty years but where human development has flatlined. And the only ‘progress’ the country has made in this period is acquiring nuclear weapons.

We know that this is not just a moral challenge. The West understands that instability in Pakistan is a threat to global security, which is why the US voted through more aid for the country in 2009 and appointed perhaps its most experienced diplomat, Richard Holbrooke, as envoy to the region. Yet the new aid package has quickly run into trouble. As blogger Mosharraf Zaidi explains, this is not just America’s fault – Pakistan’s dysfunctional government is equally to blame.  Can philanthrocapitalism help break this cycle?

One area that is ripe for innovation is education. School enrollment in Pakistan is 39%, worse than Sudan, and the education most kids receive (in public schools as well as madrassahs) is, frankly, rubbish. We cannot afford to wait for the government to turn this around. Private provision – for-profit and charitable – is going to have to take the strain. In India, the nonprofit Pratham is playing a crucial role in both the direct provision of education and in reforming government education programmes – philanthrocapitalists can help grow a Pakistani equivalent.

For-profit and social entrepreneurship, to create businesses that help people work their way out of poverty and to create sustainable ways to tackle social problems, is crucial too. This is a tough job, often hampered by bureaucracy (see, for example, the difficulties that has faced in building a programme in Pakistan), which is why the leading microfinance lender, Kashf, is still several orders of magnitude smaller than, say, Grameen in Bangladesh or SKS in India. The business skills of the philanthrocapitalists could help to turn this around.

We are not saying that working in Pakistan is easy. Indeed, that’s why we think it’s ripe for help from the philanthrocapitalists – to take the risk to work in this tough environment, to innovate and figure out what works. It will mean working with organisations, like Frontier Development Support, that have relationships of trust with local communities, particularly in the tribal areas.

Pakistanis themselves, at home and abroad, are in the vanguard of the humanitarian effort to help the flood victims but can they step up to the long term development challenge? The Haitian diaspora in America has taken a lead in rebuilding their country, not just through their giving but through organised lobbying of the US government on issues like trade rules. The winners from India’s economic boom, like IT billionaire Azim Premji, have also quickly moved into philanthropy, accepting a responsibility for the social and economic development of their country. The Pakistani diaspora has not yet organised itself and Pakistani elites have not yet stepped up to major giving – they might do well to learn from the example of others.

At the start of the year, we made ten predictions for 2010, one of which was that philanthrocapitalists would play a role in some of the tougher development challenges, like helping Pakistan. Some of our predictions have already been fulfilled. Let’s hope that Pakistan will be next.