2010 ‫اﻟﻤــﺆﺗﻤـﺮ اﻟـﺪوﻟــﻲ اﻷول ﻟﻠﺘﻨـﻤﻴــﺔ ﻓﻲ ﺳـــﻮرﻳــــﺔ‬

‫دور اﻟﻤﺠﺘﻤـﻊ اﻷهـﻠــﻲ ﻓﻲ اﻟﺘﻨﻤﻴــﺔ‬
2010 ‫32-42 آﺎﻧﻮن اﻟﺜﺎﻧﻲ/ ﻳﻨﺎﻳﺮ‬ The First Interna onal Development Conference of Syria 2010

Emerging Role of Civil Society in Development 23‐24 January 2010

A Case Study of the AKRSP – Successful Rural Development in Northern Pakistan ‫دراﺳﺔ ﺣﺎﻟﺔ- ﻧﺠﺎح اﻟﺘﻨﻤﻴﺔ اﻟﺮﻳﻔﻴﺔ ﻓﻲ ﺷﻤﺎل اﻟﺒﺎآﺴﺘﺎن‬

Antonia Settle, Sustainable Development Policy Institute, Islamabad, Pakistan ‫أﻧﺘﻮﻧﻴﺎ ﺳﻴﺘﻞ، ﻣﻌﻬﺪ ﺳﻴﺎﺳﺎت اﻟﺘﻨﻤﻴﺔ اﻟﻤﺴﺘﺪاﻣﺔ، إﺳﻼم أﺑﺎد، اﻟﺒﺎآﺴﺘﺎن‬ antonia@sdpi.org

This paper may not be distributed or reproduced without permission from the author(s). For references, please cite as follows: “Paper presented at the First International Development Conference of Syria, organised by the Syria Trust for Development, Damascus 23-24 January 2010”.

A CASE STUDY OF THE AKRSP – SUCCESSFUL RURAL DEVELOPMENT IN NORTHERN PAKISTAN By Antonia Settle, Sustainable Development Policy Institute, Islamabad, Pakistan. ABSTRACT: There has been a shift in development paradigms reflected in the discourse of international funding bodies, from technocratic aid modalities associated with Washington Consensus models towards a ‘new development paradigm’ that accompanies post-Washington Consensus economic prescriptions. This new development paradigm relies increasingly on NGOs for channeling funds, while granting more space for government regulation and emphasizing participatory approaches. The new paradigm has produced a discourse of devolution, participatory development and decentralization. Yet the new development paradigm has not broken free of the essentially technocratic approaches that continue to limit both monitoring and evaluation (M&E) procedures and the discourse of development at the broader level, resulting in a gap between policy and practice as well as ill-informed development policy formulation. The present study undertakes a case study of the Aga Khan Rural Support Programme (AKRSP), a rural development program operating in the North of Pakistan that conforms to the prescriptions of the new development paradigm and has achieved impressive accolades, international replication and “remarkable” findings in a number of World Bank evaluations. The study seeks to consider this very successful program beyond the norms of mainstream M&E procedures, to consider some of the issues raised in the critical literature regarding the new development paradigm and the larger discourse within which the new paradigm remains embedded. The present study raises a number of issues in regards to the AKRSP, including the role of religion in sustaining engagement amongst communities and the limits on market functions in alleviating poverty, that reflect the failure of mainstream approaches to reflect important issues in the field into M&E outcomes. The implications of the study are that M&E processes need to be overhauled and that the feedback of observers external to the development industry is crucial in framing development policy. An awareness of the kinds of issues raised in this study in regards to the specific case study undertaken is crucially important in shaping responsive and realistic M&E processes and developing policy formulation, especially of development policy alternatives, at all levels. Keywords: Monitoring and evaluation, participatory development, rural development, new development paradigm

A CASE STUDY OF THE AKRSP The World Bank, recast as a “knowledge bank”, has been central in setting the agenda for the shift into a new development paradigm (Fine, 2009), which occurred through the 1990s as a result of broad based criticism against the austerity of Washington Consensus economic policies and their associated development models. Former World Bank Chief Economist, Joseph Stiglitz, articulated the emerging new approach in his 1998 address to the United Nations Conference on Trade and Development, where he outlined a new approach emphasizing participation and ownership and recasting the one-size-fits-all Washington Consensus model to recognize the specificity of context while retaining “openness” in regards to trade and investment. The new paradigm grants more space to government regulation, reflecting the extra-Washington Consensus success of the ‘Asian Tiger’ economies, and pits governments as “partners in development”, along with the private sector and NGOs, while recognizing social criticism of Washington Consensus models through the incorporation of the concept of social capital (Stiglitz, 1998). Against this backdrop, the present paper undertakes a case study of the Aga Khan Rural Support Programme (AKRSP), a world-renowned rural support program operating in the North of Pakistan and an excellent example of successful rural development along the lines of new paradigm prescriptions, in order to contribute to lessons learnt about participatory approaches and the newly paradigmatic approach. The AKRSP is an important case study because of its acclaimed structure and approach, which has been hugely influential in developing rural development strategies within the international development community. The AKRSP model has been incorporated into national Government programs and replicated in all provinces of Pakistan and internationally. The

present case study is the result of in-depth field interviews, policy review and broader literature review.

PAKISTAN’S NORTHER AREAS: RURAL DEVELOPMENT CONTEXT The Aga Khan Rural Support Programme was first established in the Gilgit region of the Northern Areas, recently renamed Gilgit-Baltistan, by the Aga Khan Foundation in 1982. Gilgit-Baltistan, sitting high in the mountains between the Chinese, Afghan and Indian-held Kashmiri borders, remained extremely isolated until the Karakouram Highway was completed in 1986, linking Islamabad to the Chinese border through the region’s steep valleys. Until the early 1970s, the region remained a network of princely states, the head of each state of whom was titled the Mir. The population is made up of Ismaili, Shia and Sunni communities, with the regions majority community being formed by Shia communities who largely reside in the lower valleys. The upper vallies are largely Ismaili and Sunni minorities live in the lower valleys. (Harlech-Jones et. al., 2005: 558) The Ismaili population follow the leadership of His Highness the Aga Khan, the forty-sixth Aga Khan descended from the Prophet Mohammed, in whose name the Programme is established. The Ismailis are noted as set apart from other Muslims insofar as “the Aga Khan holds a position of both secular and spiritual authority” (Greene & Butler,1996: 54). The Aga Khan thus retains the position of founder and Chairman of the Aga Khan Development Network, under which the AKRSP functions. However, the often direct involvement of the Aga Khan in the AKRSP and its sister organizations represents only one facet of the important relations between the Aga Khan, who resides

in France, and his followers, who are spread across the higher valleys of Gilgit-Baltistan, Afghanistan’s Wakhan Corridor and its neighbouring regions of Tajikistan. Ismaili communities have their own Ismaili Council, the Pakistani arm of which is based in Karachi, through which the Aga Khan issues regular telegrams to his people through the local network of Ismaili mosques (Jamhat Khanna) and through which zakat (Islamic welfare tax) is paid and distributed on an institutional basis, rather than the often personal transfer of zakat amongst non-Ismaili Muslims. Ismailis across these harsh, mountainous regions speak affectionately of the Aga Khan as their savior in historic times of famine and follow his guidance, which advocates capacity building through education and enterprise, warning of the folly of formal politics. (Shah, 2009; personal communication) As AKRSP documents explain, “the original goals of the AKRSP were to contribute to doubling the per capita income of local communities (of the region), and to develop and test a practical rural development model for replication in Pakistan and other countries”. (AKRSP, 2008: xi) Under the guidance of world-renowned development practitioner Dr. Akhdar Hamid Khan (AKRSP, 1985: ii), the AKRSP strategy is based on the principle of self-managed development through the three pillars of social, financial and human capital development, with physical capital included in the strategy in the mid-1990s.

AKRSP STRUCTURE AND STRATEGIES The AKRSP focuses on strategies of collectivization and collaboration in order to address some of the problems that have restricted a shift from small-scale subsistence farming towards commercial farming in the area. (AKRSP, 1983) The organization’s first Annual Report notes that “people cooperate [or collude] only when cooperation is profitable.

Similarly, long-term collusion requires continuing benefits to the members”. (AKRSP, 1983: 4) Along this line of thinking, the AKRSP developed the strategy of ‘social mobilisation’ based on the work of famous Pakistani development specialist, Akhter Hamid Khan, by which village and intra-village level institutions are established and supported by the Programme. This organizational framework is then utilized for the key function of micro-credit, along with the facilitation of projects in the fields of community infrastructure, sanitation, health, enterprise development, micro-insurance, skills training, leadership training, education and others. (RSPN, 2008) As such, the Programme develops social capital, by constructing village and intra-village institutions for collaborative work; financial capital, through micro-credit programs and the provision of grants; and human capital, by promoting leadership and entrepreneurial training, healthcare, sanitation and education. The physical capital component is largely constituted by the upkeep of irrigation channels, although also includes the construction of bridges and roads, which is organized and funded through the village-level institution. (Gohar, 2009) The AKRSP justifies its intervention in terms of “filling the gap” left by the demise of princely rule in the early 1970s, which was not met by government. With only a weak government presence in the region, “if not outright (government) failure” (Campos et al., 2004: 51) the AKRSP set about “organizing the poor into self-governed institutions” (RSPN, 2008: 9) to fill the vacuum left by the departure of the Mir. (Campos et al., 2004) The central pillar of the AKRSP’s social mobilization strategy is the Village Organisations (VO), “a self-sustaining development institution at the village level that

can enter into a partnership for development with governmental and private agencies”. (AKRSP, 1983: 4) The VO qualifies for AKRSP assistance when at least 75% of

village households are organized and an initial project is agreed upon which will deliver tangible economic benefits. Each household must agree to start regular contributions to its own savings account, which is administered through the VO. VO members elect a VO Manager and Bookkeeper, removable by a two-thirds vote of member households. (Campos et al., 2004: 55) Since VOs are dominated by men, Women’s Organisations (WO) function in much the same way, having a key micro-credit function, providing a forum for discussion and decision-making and providing a platform for carrying out various projects. At the intra-village level, Local Support Organisations (LSO) represent clusters of villages (10-30,000 people). The LSO has been a more recent development, however, upon which efforts have been focused in recent years in order to provide a sustainable platform from which people can continue to organize themselves after the AKRSP scales down and pulls out. (Gohar, 2009)

27 YEARS OF THE AKRSP IN GILGIT-BALTISTAN Box 1: The AKRSP in 1985 By 1985, the AKRSP had • organized 316 villages into VOs, through which 232 physical infrastructure projects had been initiated, with just over 1% of funding being contributed by the VOs themselves and the rest by the AKRSP • • • artificially inseminated 106 animals through the breed improvement program and further explored crop development disbursed fertilizer loans to 19 VOs distributed 9 marketing loans and 34 long term loans

• •

broadened the Marketing Section to include timber, vegetables, livestock and maize, besides fruit, and introduced a mobile Food Processing Unit. established 100 Women’s Organisations, through which 1.38 million rupees had been saved.

Source: AKRSP, 1985, Annual Report 1984, AKRSP, Gilgit.

Box 2: The AKRSP 2008 22 years later, by the end of 2007, the AKRSP had • • • established 2,636 VOs and 1,939 WOs within the Northern Areas and Chitral regions alone been replicated in each of Pakistan’s provinces been incorporated into government strategy, for example through the Social Action Programme and local government structure under the Devolution Plan 2000 • • • provided over 26,000 individuals with various training programs conducted 16 development forums to bring together various stakeholders in the development process achieved other advances in agriculture and livestock, market development, infrastructure development and social capital development
Source: AKRSP, 2008, Annual Report 2007, AKRSP, Gilgit.

While Boxes 1 and 2 reflect the impressive scaling up process undertaken by the AKRSP over a period of 22 years in the region, Tables 1, 2 and 3 reflect some of the gains made in the region in term of various poverty indicators, set against national statistics. Stephen Rasmussen, former General Manager of AKRSP, and his associates, who undertook the study cited below, claim that “the available evidence is strong enough to suggest that the contribution of AKRSP to economic development in (the Northern Areas and Chitral) has been substantial” (Rasmussen et al., 2004, p. 11). These finding are supported by World Bank research (World Bank, 2002) and are not contested by this study, as discussed below.

Table 1 reflects the decline in national economic growth, which slowed considerably in the 1990s, while the Northern Areas and Chitral economy experienced per capita income growth of 84% during the 10-year period (Rasmussen et al. 2004, p. 10) Table 1: Trends in Income Per Capita (US$) Pakistan Northern Areas and Northern Areas and Chitral Chitral as percentage of Pakistan 1991 424 131 31 1994 440 176 40 1997 487 232 48 2001 415 241 58
Source: Government of Pakistan, Federal Bureau of Statistics; AKRSP, Farm Household Income and Expenditure Surveys cited in Rasmussen et al. 2004.

Table 2 reflects the translation of this growth into poverty reduction statistics. Again, while national poverty displayed an upward trend, poverty in the Northern Areas and Chitral dropped from about two thirds of the population to about one third. Moreover, the indicators for the depth of poverty (poverty gap), intensity of poverty (poverty gap index) and severity of poverty all reflect decreasing trends (Rasmussen et al., 2004, p. 10). Table 2: Trends in Poverty Pakistan Head count (percent) 1991 26.1 1994 28.7 1997 29.8 2001 32.1

Northern Areas and Chitral Head count Poverty Gap (percent) 67 0.53 54 0.49 45 0.42 34 0.38

Poverty Gap Severity Index Poverty 0.36 0.75 0.27 0.55 0.19 0.41 0.19 0.27

of

Source: Government of Pakistan, Planning Commision; Malik and Wook (2003) cited in Rasmussen et. al. 2004.

Table 3 reflects a limited set of social indicators for the Northern Areas, revealing the sharp decline in infant mortality and increasing literacy rates in the region.

Table 3: Selected Social Indicators for Northern Areas Infant mortality Literacy Rate Primary school rate (per 1000 (percent) (percent) live births) Boys 1986 162 N/A N/A 1994 50 14 N/A 1997/1998/2002* 33 33 77

Enrolment Rates

Girls N/A N/A 62

Note: Infant mortality figures are for 1997, literacy rates for 1998, and primary enrolment rates for 2002. Source: Government of Pakistan; AKHSP; AKESP cited in Rasmussen et. al. 2004.

The AKRSP has now substantially surpassed its original goal of doubling incomes (World Bank, 2002) and has slowly shifted its emphasis, reflecting its monitoring and evaluation processes, including the findings of the four World Bank evaluations. The AKRSP strategy has thus shifted from broader rural development to individual projects, particularly in the field of enterprise development targeting women and poorer households. (AKRSP, 2008) The social mobilisation strategy has come to focus on the larger, inter-village level organization, the Local Support Organisation. LSOs, including one staff member trained and paid by the AKRSP, are intended to liaise with donors directly and take over AKRSP functions as the AKRSP prepares to scale-down, both as the result of ‘donor fatigue’ (World Bank, 2002) and its original expectations. (Gohar, 2009) Moreover, the LSO is intended as an institution which can cooperate with the Musharraff Government’s 2000 Devolution Plan, whereby local governments are granted increased service delivery and development roles with a new emphasis on civil society participation. (Gohar, 2009) Government capacity has also come to constitute a new focus for the Programme, reflecting World Bank findings that this area represented the Programme’s main weakness. (World Bank, 2002: xvi) The AKRSP’s most recent Annual Report defines its aims as “promoting inclusive human development, eradicating extreme poverty, and reducing gender inequalities in the area.” The Annual Review goes

on to state that, for the accomplishment of these overall objectives, AKRSP has developed a strategy that focuses on 1) social development to create an enabling development environment by forming and developing sustainable

community institutions and holding policy dialogues with development partners, 2) resource development to improve livelihood systems by creating assets and income-generating opportunities, and 3) market development by systematically searching for market-based opportunities for income, employment and enterprise. (AKRSP, 2008, p. 2)

This focus reflects World Bank criticism, finding that, despite the “remarkable results” achieved by the AKRSP, the continuing relevance of the programme has been threatened by persistent weakness in public sector development capacity; declining frequency of village infrastructure investment; increased pluralism in community organizations; limited progress in bringing women fully into the development process; declines in saving and credit flows; and an increase in overdue repayments in microfinance. (World Bank, 2002, p. 2)

In responding to World Bank criticism regarding the AKRSP’s approach in relation to government (World Bank, 2002), in 2003 the AKRSP initiated a Policy Dialogue and Partnership Programme. This program includes holding development forums, in which “community organizations, public and private sector agencies, religious institutions and NGOs participate.” (AKRSP, 2007: 11) Furthermore, the Programme includes the undertaking of collaborative projects and initiatives in partnership with government and other service providers in the areas of education, health, water supply, sanitation, housing and culture. Finally, the AKRSP has started a Linkage Programme, which attempts to link WOs and LSOs with Government agencies and government line departments

respectively. The Policy Dialogue component represents policy research initiatives. (AKRSP, 2007) The AKRSP has also made a concerted effort to reach women and poorer segments of society in response to its weaknesses in this regard, (World Bank, 2002) introducing the Grameen Bank-designed ‘scorecard’ system to identify the poor, and making various changes to its gender policy. (AKRSP, 2007) The AKRSP has made a major contribution to improving the quality of life in Gilgit-Baltistan. The presence of Aga Khan services, including the AKRSP, in the region are highly visible and reflected in the statistics provided by each of the successive annual reports. The interview data reflects a widespread belief that the most outstanding success of the AKRSP has been in empowering local people and “broadening consciousness”. This may be attributed not only to the VO and WO system, which entails participation rather then obedience to elites, but also to programs such as ‘exposure visits’, whereby AKRSP clients visit other regions, scholarship programs, specific training programs, as well as other achievements in broader human and social capital development. One prominent example of AKRSP success lies in the development of potatoes as a cash crop, which is an important development for the region, allowing families to save money, which is generally put towards education, including through the use of special long-term savings accounts for the college education of children. In this regard, the AKRSP initiated the potato trade in the region, introduced communities to the banking system and emphasized the importance of education. These successes have been widely disseminated within the development community and have justified the replication of the Programme at both the provincial, national and international level.

MAJOR THEMES FROM THE FIELD Religion and Replicability The relevance of such achievements as far as replicability is concerned, however, can be questioned insofar as Gilgit-Baltistan remains a unique region for a number of reasons. The most salient point in this regard may be the prevalence of Ismaili communities in the regions in which the AKRSP has proved so successful. Certainly, for the Ismailis there is religious prestige related to the Aga Khan and compliance with a program that assumes His Highness’ name. This suggests that an element of the AKRSP’s success can be situated in its religious nature, despite the fact that the AKRSP explicitly plays down the relevance of this dimension of the AKRSP’s work and considers itself a non-sectarian organization, which complies with the international funding environment. A religious platform from which development agencies may work has been articulated by scholars such as Dr. Ali Gohar, who argues that religion is a central institution in community resource management in the region. (Gohar, 2003) Given the relevance of religion not only to day to day life, but to community relations and decision-making within the ethnic communities of Gilgit-Baltistan, the incorporation of religion into the development paradigm can be considered crucial in contributing to the efficacy of development programs. Interview data revealed that the AKRSP has been greeted with suspicion in Shia and Sunni villages, where participation with the Programme has been conducted with less fervor on the part of villagers, if not outright rejection as occurred in Diamer district near Gilgit. Although this study has not been able to closely study the extent of the AKRSPs success in non-Ismaili areas, it has been reported that in the Shia and Sunni areas of Nagar region in the Gilgit district (population

approximately 70,000), where some 200 VOs and WOs had run in the early years of the AKRSP, “100%” are now said to be dormant. (Mohammad, 2009) It is difficult to assess the causes of this collapse of the AKRSP system in some non-Ismaili areas and to identify the degree to which the loss of interest in the Programme came from villagers at the grass-roots level as opposed to a loss of interest from the AKRSP in supporting the Organisations. The interview data suggests the latter was the major issue, while the AKRSP’s 2008 Annual Report blames the failure of VOs and WOs on the former, on “weak leadership, unresolved disputes and poor communication amongst members”, (AKRSP, 2008: 8) without specifying the problem as being largely specific to non-Ismaili areas. It is, however, very likely that the commitment of villagers to a programme that exists in the name of another sect’s spiritual leader has not endured in the same way that the commitment remains in Ismaili communities. Locating such an important engine behind AKRSP success in the religious commitment of the Ismaili people to their spiritual leader suggests that the Programme may be seriously impeded in replication where the religious designation of the Programme is excluded, as it appears to be in Shia and Sunni areas. This conclusion is reached in opposition to the most recent World Bank evaluation which regards replicability as “fully achieved” (World Bank, 2002: xiv) and undertakes no discussion over the reception of the AKRSP in Sunni and Shia areas. The central role of religion in facilitating sustained community engagement remains an extremely important lesson learnt from the present case study of successful rural development strategies. Furthermore, the AKRSP is considered by some to have strengthened increasing sectarian divisions that have dramatically escalated in the Gilgit region since the 1980s.

The root causes of sectarian violence, particularly in the Gilgit region, remain linked to the fostering of Sunni jihadi groups under the government of General Zia through the 1980s, carried on through successive government policy since, in the interest of keeping the flame of conflict alive in neighboring Indian-held Kashmir. Violence, predominantly between Shia and Sunni, erupted in the Gilgit area in 1988 resulting in hundreds of deaths, with crises arising again in 2005 and 2006, revolving around the assassination of leading religious figures and the installation of conservative Sunni Government officials in the area. (Ahmed, 2009) Thus, the articulation by name of the AKRSP as an Aga Khan-sponsored program, while strengthening its work with Ismaili communities, is questionable in its wisdom insofar as it operates in an environment of heightened sectarian tension. The nature of the AKRSP as an Aga Khan-sponsored program, moreover, has allowed for a degree of security in funding, which has allowed the Programme to take on a strategy rooted in a more long-term approach to the area. The first Annual Report refers to the Programme’s 10 year strategy, thanks to the security of Aga Khan Foundation funding, as offering the Programme a lead over the regular, short-term, project-based development strategies of most agencies. (AKRSP, 1983) The support of the Aga Khan Foundation as representing an important level of security for the ongoing nature of the project was reflected in the interview data. Here, questions regarding the sustainability of funding were responded to with references to the ongoing concern of His Highness for his people. The AKRSP may thus address common issues related to the short-term nature of much development funding by demonstrating a level of success related to a development strategy embedded in long-term funding and thus providing another

important lesson on overcoming problems associated to short-term funding. The psychological and financial security of being directly linked to the spiritual leader of the majority of the subject population represents another facet whereby the religious nature of the organization contributes to the Programme’s success, calling its replicability into question. Other salient characteristics of the AKRSP’s work within the specific context of Gilgit-Baltistan include the regions exceptional geographical terrain. On the one hand, the region remains of strategic importance and Chinese aid has contributed crucially to the building and maintenance of the Karakouram Highway, accepted by the Pakistani Government in countering the presence of India in the region, with whom the Chinese have continued territorial disputes. Thus, the strategic nature of the region has ensured the external funding of major transport infrastructure development in the region. Consequently, Gilgit-Baltistan maintains a certain standard of infrastructure, and especially transport infrastructure, which contributes to the economic success of the region, without having depended on government investment. In this regard the model of Gilgit-Baltistan as having achieved impressive development indicators with major inputs from the AKRSP and little government presence is obscured by the strategic nature of the region. On the other hand, the mountainous terrain has contributed to the historic isolation of the region with specific consequences for the nature of power relations within the region. Due to the mountainous isolation of the area, the government presence remained weak even in the years following the accession of the regions into the state of Pakistan in 1973. The late accession of the region into Pakistan, moreover, has

contributed to the prevailing nature of Gilgit-Baltistan as a quasi-province of Pakistan, with a weak constitutional position and limited formal representation in the National Government. The region was thus not endowed with a strong government presence at the time of the AKRSPs inception into the area and, without the functions of a full province on par with the other provinces, government rule has continued to retain an irregular and limited capacity. The isolation of the region, then, has ensured that the nature of the political landscape in the region has remained somewhat unconvoluted, particularly as, in contrast to much of the rest of Pakistan, agricultural land is generally owned by those who farm it so, in general, there is not a community of landless peasants and there is relatively little inequality within and between villages. This is the result of the transfer of land directly to farmers with the departure of the Mir. The interview data suggests that the old elites under the Mir maintained control over conflict resolution and community decision-making through various forms of the jirga and namadan system, which still persist especially in non-Ismaili areas, in the decades after accession into Pakistan, and were carried over into the VO system. This points to the claims of the AKRSP that the AKRSP was filling an institutional gap with the departure of the Mir as somewhat of an exaggeration, while the claim of the AKRSP as having democratized local decision-making may also be subject to the same criticism. The articulated shift in emphasis towards reaching the poorest of the poor in recent years, which suggests that the poorest were being excluded from the region’s gains in the first decade of the AKRSP’s work, lends weight to this accusation. At any rate, the relative equality and general social cohesion within the different communities of the region is generally conducive to participatory development programs.

For example, as opposed to where caste hierarchies co-opt participatory approaches in certain cases in India, (Prasad & Tripathi, 2009) relative equality within Gilgit-Baltistan contained much potential conflict in the imposition and functioning of new village institutions in the region and the carrying out of development projects on a participatory model. The peripheral presence of government, relative equality within the population and absence of landlords has thus contributed to a unique power dynamic in the region which may well have provided a political backdrop relatively conducive to the work of the AKRSP. This may be especially true in the case of Ismaili communities, where the role of the Jamhat Khanna is somewhat different to that of the mosque in organizing the community and women command a different status within the community. With the complex power dynamics of other regions of Pakistan, where government presence stretches back to the British, deeply embedded patronage systems prevail and feudal elites dominate, the AKRSP model may well be less effective.

Approach to Government – Reaching the Poor? Further limitations can be found in the Programme’s attitude towards government. Consensus over the nature of the AKRSP as supporting a neo-liberal agenda, especially in regards to the relationship with government, was reflected in the interview data, although is much more difficult to locate, at least explicitly, within AKRSP publications. The neo-liberal principles underlying the AKRSP’s work, however, can be gleamed from the Programme’s disinterest in government, focus on market-solutions1 and funding (see

1

For example, the AKRSP focuses on gaining market access for its clients, promoting the use of public-private partnerships and working with various multi-national corporations to bring their products into Gilgit-Baltistan. (AKRSP, 2008) The AKRSP promotes the privatization of government service provision such as schooling, health and public transport, including the Government-run Northern Areas Transport Company (Muzaffar, 2009).

Table 4). The underlying neo-liberal nature of the relevant funding bodies, which embrace an overlay of new paradigm strategies, is reflected in policy documents.2 In line with the dominant discourse of the new paradigm, these agencies emphasize liberalized economic policies with a small role for central government in the interest of expanding the market, an approach that is evident in the promulgation of public-private partnerships, NGOs as channels for funds and participatory development and devolution, amongst references to social capital and local context. Table 4: major funding sources for the AKRSP 1982-2000 Funding source As percentage of total AKRSP funding British Overseas Development Agency 34% Canadian International Development 20% Agency Netherlands Government 16% Norwegian Agency for Development 8% European Union 8% Aga Khan Foundation 7% World Bank 0.13% Total: 93.13%
Source: Campos et al., 2004.

The AKRSP’s hesitant approach to government is apparent through historical policy review. Certainly government does not constitute any of the pillars upon which the Programme focuses its work and government remained somewhat absent from the AKRSP approach in the early years. Although the Policy Dialogue and Partnership Programme was included in 2003 as a result of World Bank criticism, the designation of the government as a “development partner” on a similar level to other “development partners”, (AKRSP, 2004) such as NGOs and external funding sources, reflects the low status of government in the AKRSPs analysis, which coincides with the neo-liberal

For examples, see ADB, 2004; IMF, 2008; World Bank (no date, a; no date b). For bilateral donors see Canadian International Development Agency, (CIDA, no date); UK Department for International Development (DFID, no date; Hulme, 2000); U.S Agency for International Development (USAID, 2008)

2

approach. One major issue in this regard is that the AKRSP approach is widely accepted as contributing to the weakening of the state. (Smilie & Hailey, 2001) This is reflected both in the most recent World Bank evaluation, which emphasizes this concern, and in the interview data. (World Bank, 2002) The government is delegitimized in the public mind through its increasing irrelevance, where basic services and political organization occurs outside of its domain and inside that of the AKRSP and its sister organizations. As such the state may no longer be expected to carry out core duties and participation in the formal political system may be deemed of less value as the government is considered with decreasing legitimacy. Moreover, the role undertaken by the AKRSP of substituting government has contributed negatively to the development of the state’s capacity as demands for service provision and representation are satisfied by the AKRSP, diverting such demands away from government. While this effect can be recognized as stunting the development of state capacity, the deterioration of existing state capacity occurs through “brain drain” to the higher-paying employment of the AKRSP in the area. Although the political system remains convoluted across Pakistan, and especially in the quasi-province of Gilgit-Baltistan, the present lack of government capacity in the region can be partially attributed to the presence of the AKRSP. Certainly, the government presence in Gilgit-Baltistan was very weak when the AKRSP initiated its program there, yet had the AKRSP worked with government from the start, state capacity could be expected to be much stronger than it is today, after over 25 years of the AKRSP in the region. (Gohar, 2009)

Dutch Ministry of Foreign Affairs (no date).

This approach clearly represents an unfilled gap insofar as the AKRSP remains incapacitated for large-scale infrastructure projects. Although detailed analysis of this issue is beyond the scope of this paper, there is a strong argument for rejecting the efficacy of Public-Private Partnerships (Ewins, 2006; Torrance, 2008), suggesting that it is exactly this domain which remains unique to government and which, it is agued below, is undermined by the neo-liberal approach. In the case of Gilgit-Baltistan the abundance of water provides an obvious solution to the deficit of electricity in the area; even in Gilgit, the region’s major hub, the electricity supply is neither constant nor predictable, deteriorating sharply in the winter months. The development of the road network is a second area through which economic development could be vastly stimulated. Yet both projects are far beyond the capacities of the AKRSP and, arguably, the government. Furthermore, the strategy of sustainability at the village level results in the creation of user-pays services for education and health facilities, dovetailing with what K. Munir describes as the Pakistani Government’s “wholehearted embrace” of a view of education “as a market like any other”. (Munir 2004, cited in Harlech-Jones et. al., 2005: 559) An example of the impact in these sectors of the AKRSP’s self-sustainable, participatory approach lies in the Social Action Program, a major collaborative project with the Education Department that the AKRSP implemented in 1993. Under this program, ‘community schools’ were established where communities provided the school buildings, teachers and management, and a grant of some 100,000 rupees (approximately US$3,500) was provided by the government, from which accruing interest could be put towards teachers salaries. (Harlech-Jones et. al., 2005: 559) A similar strategy is undertaken by the Aga Khan Health Services, whereby user fees fund self-reliant

community health centers. Not only does this establish norms in the region that quality education and health facilities are neither the responsibility of government nor available to those who can’t pay, but such an approach has implications for the quality of both these sectors and, as Munir argues, could reduce access of both females and the poor. (Munir, 2004) The question of whether or not such developments, and indeed the AKRSP itself, is in the long term interests of the most vulnerable segments of society, whom the International Financial Institutions, such as the World Bank, and the AKRSP attempt to benefit, is pertinent. As noted above, the AKRSP has done a great deal for the people of Gilgit-Baltistan, notably in reducing poverty, however even the AKRSP itself has had difficulties reaching the poorest. This may be due the perpetuation of elite power through the VO system, which was noted by a number of interviewees. At any rate, there is an increasing gap between what the market provides and what is provided by the government, which has been largely sidelined in the development process and has failed to capacitate itself. While this gap is presently filled by the AKRSP, the AKRSP is currently looking towards scaling back its operations and the poorer populations of Gilgit-Baltistan may well not be able to afford to pay for the services that are not provided by government if and when donor funds are reduced. Moreover, it must be recognized that the AKRSP has contributed to the decapacitation of the Pakistani government by failing to address government capacity in establishing itself in substitution roles. While it may certainly be argued that if the AKRSP has brought services to Gilgit-Baltistan where none existed before, on the long term, the people of Gilgit-Baltistan may well suffer as much as any other vulnerable population by being

denied the potential benefits of a functioning government working for the public good.

Accountability – Raising Issues through M&E? In considering the limitations of the AKRSP model as arose in field research, one major shortcoming can be found in the inability of the AKRSP to escape the trap of corruption and nepotism that characterizes the NGO sector in many developing countries. While the interview data reflected a widespread perception that the AKRSP had functioned well in its first decade, the AKRSP is now described as “the cow that drinks from its own milk”. The AKRSP has, then, been understood to have become, to some degree at least, a self-serving bureaucracy. In this regard, the unnecessary use of helicopters for AKRSP staff and the expansive fleet of expensive vehicles assigned to AKRSP officials and their families, has been cited by local people who see the AKRSP as a corrupted employment opportunity for the Ismaili community. Within this latter criticism is the widespread concern amongst the non-Ismaili community that there is a heavy bias against Sunni and Shia communities. In this regard, non-Ismaili community leaders argue that only one single scholarship has ever been granted in the Nagar district, which consists of predominantly Sunni and Shia villages within the Gilgit district, whereas some 300 have been distributed in Ismaili districts. Similarly, non-Ismailis are reported to need higher grades to get into Aga Khan Higher Secondary Schools than Ismaili candidates. Regardless of the statistical accuracy of such claims, the widespread mistrust of the AKRSP in non-Ismaili areas is a problem in itself and suggests that the AKRSP has succumbed, to some degree, to the relations of patronage that prevail across Pakistan..

These criticisms point towards a general trend, acknowledged to some degree by the AKRSP itself in interview data, that the first decade of the AKRSP was a “golden age”, whereby staff and volunteers were idealistic and highly motivated. This has given way, to some degree at least, to nepotism and corruption, whereby the AKRSP is no longer an NGO different to the others, but another ‘gravy train’ busy reporting its own success in order to secure continued funding. Here, then, the question of the accuracy of the AKRSP’s own reporting is called into question. This study is not able to examine this issue in detail, however the decline in the AKRSP, which was widely acknowledged in the interview data, is in no way clearly reflected in AKRSP Annual Reports. One prominent discrepancy between the interview data and the AKRSP’s own publications, which suggests that the AKRSP may be subject to some degree of inaccurate reporting in the interest of maintaining funding, is claims by certain community leaders that in the Shia and Sunni areas of the Gilgit region, as mentioned above, VOs and WOs are “100% dormant”. (Mohammad, 2009) This is not reflected in the most recent Annual Report, which paints a positive picture of the AKRSP continuing to produce remarkable results, citing a selection of data as representative of the Programme. In a seemingly token admission of failure, the Annual Report does mention that only 6% of VOs and WOs in Baltistan region have reached a high level of maturity, but no discussion is undertaken as to why this may be so and the predominance of Shias in the region is not mentioned. (AKRSP, 2008: 36) The decline in the AKRSP as revealed in the interview data is neither reflected in the most recent World Bank report, where neither the prevailing politics of patronage nor the sectarian make up of the region is discussed. The World Bank report instead focuses

on efficiency and efficacy and fails to recognize any issues with such political dynamics, with no mention of the ethnic complexities of the region and the ways that the Programme seeks to work in this environment.

DISCUSSION NGOs and the Government Sector The AKRSP’s hesitancy towards government is not surprising considering the sordid state of government in Pakistan. Furthermore, the Government’s weak presence in Gilgit-Baltistan may be considered as adding impetus to a strategy that does not lend itself to creating a dependence on government in the region. Yet it is argued by some that the weakness of government in the region at the time that the AKRSP was initiated could have been considered a strength, whereby a regional development initiative such as the AKRSP could have worked with government from the start to develop government capacity. From this point of view, the task of building a responsive and capacitated government is easier when the government has a weak presence in an area than when it is deeply embedded in patronage networks, such as is the case in other provinces of Pakistan. Although it is mere speculation to claim what the government in Gilgit-Baltistan would have become if the AKRSP and its sister organizations had not stepped in to carry out service provision and establish village-based development institutions, the interview data reflects a widespread understanding that the AKRSP has undermined government, thereby weakening it. The extremely poor capacity of government in the region attests to this. The AKRSP has thus been found to have made a valuable contribution in general to the welfare of the people of Gilgit-Baltistan, and especially within Ismaili communities.

Yet by effectively substituting the state in promoting development and establishing parallel decision-making institutions, this has come at the cost of weakening the state, where participation with government bodies since the initiation of the Programme could have resulted in best-practice provincial and local governance in the region. A concern for the delegitimisation and decapacitation of the state is reflected in the literature in relation not only to the rise of the NGO sector, (Smilie & Hailey, 2001) but also to the wider institutional environment. (Farrington et al., 1993) For example, IMF Structural Adjustment Programs demand deficit reduction through cuts in government spending in order to facilitate the expansion of markets and NGOs. (Gore, 1999) Additionally, the pursuit of free trade through the WTO rules of trade curtail economic support to domestic business by considering such support a ‘market distortion’, leaving major policy, such as industrial and trade policy, largely to the market. (Suleri, 2004) With the reduction of government capacity, government becomes increasingly irrelevant and illegitimate in the public mind and is divested of much potential as the state is reverted to a mere function of the market. Concern for state legitimacy is one facet of criticism of the neo-liberal model common in the literature whereby the efficacy of the neo-liberal paradigm is disputed in serving the long term interests of society in general, and the poor in particular. (Stiglitz, 2002b) The retreat of the state in welfare provision and the accompanying privatization of public services, along with the deregulation of trade and capital, is understood as facilitating the intensification of the transfer of wealth to multi-national corporations and the business owning classes. (Dumenil and Levy, 2004) Such approaches centre on the political nature of neo-liberal globalization as it is played out through the new

development paradigm, where the shifting nature of the political sphere is contested, issues of accountability raised and the ‘trickle down’ theory rejected. Such approaches problematize privatization, considering the expansion of market-based relations as often occurring at the cost of the cohesion of society in general. (Nairn and James, 2005) Some argue, for example, that the profit-seeking imperatives of market-based relations exclude the possibility of catering for the broader social good. The government must thus retain control over certain potential markets in the name of governing in the interests of the society as a whole, (Martin, 1996) which includes the protection of the most vulnerable members of society from the harshest consequences of market forces. (Bayliss, 2006) Government action may be considered crucial in responding to the issues facing marginalized populations where strategic responses at a macro or societal level may reveal a domain of coordination in which only governments can deliver. (Arnove & Christina, 1998; Onis & Senses, 2003) This social critique is complemented by the more technical approaches to the critique of neo-liberalism. One substantial body of literature in this vein challenges the

neo-liberal consensus by recognizing the crucial role of government in the processes upon which the newly industrialized economies of East Asia have established themselves. (Abbasi, 2008) These ‘tiger economies’ have used state policy to coordinate industrialization, in direct contradiction to the neo-liberal strategy underlying both the Washington and post-Washington Consensuses. Furthermore, while the key assumptions underlying neo-liberalism have been “debunked” by various scholars, an economic critique of privatization, including of Public-Private Partnerships, has pointed to the ideological nature of many such exercises, which have made little economic sense yet

remain characteristic of neo-liberal reform. (Keen, 2001) At a broader level of the development debate, Robert E. Wood argues that foreign aid in general stunts the ability of the state to develop and introduces market dependency. (Wood, 1980) Wood notes that while it has been shown that Less Developed Countries produce large surpluses, foreign aid lessens the state’s dependence on its ability to appropriate the domestic economic surplus by providing outside resources. This “systematically undercuts the possibility of state-controlled development and fosters the structural dependence of the state on processes of private accumulation”. (p. 6)

M&E Efficacy The issues raised above suggest that, despite some clear successes in Gilgit-Baltistan, the limitations of the AKRSP’s work in the region remain rooted in the limitations of the neo-liberal principles within which the AKRSP functions, reflecting important issues within wider development processes. This is apparent both in regards to the role of government in organizing society in the AKRSP model, by which government has been unmistakably decapacitated, and in regards to characteristic conceptions of accountability, which tend towards relying on the functions of the market. In regards to the latter, the AKRSP may, then, be limited by the funding dynamics to which it is subject, by which the AKRSP has been forced to succumb to the rationality of business in its attempts to secure ongoing funding. As such, the AKRSP has reported its own activities in a somewhat uncritical manner, skipping entirely over the religious element, be it in contributing to the success of the AKRSP in some areas or hindering success in others, while avoiding a discussion of nepotism and corruption. It is argued here that this reflects the nature of the development arena, in regards to both NGOs and donors, which does not

seek out the political dimensions of development (Holvoet & Rombours 2008) and is thereby blind to both local sectarian issues and the prevalence of patronage networks in the area. Where the market does not supply adequate accountability to the AKRSP, the new development paradigm’s complimentary monitoring and evaluation processes are neither adequate. These issues of accountability are reflected in the literature. At the NGO level, NGO’s generally only remain accountable to their funders, despite the implications of their programs in the communities in which they work. An important issue in this regard is the lack of critical force not only in M&E processes but in the wider discourse that surrounds development. While NGOs have an interest in promoting their own success, which raises questions about the reliability of documentation, the IFIs and western donors have been found to be subject to a “narrow technocratic vision” which severely compromises their monitoring and evaluation processes; (Holvoet & Renard, 2008: 577) an approach that is also required by donors of NGOs. As such, not only the monitoring and evaluation of development processes but the general discourse can be lacking in critical force both where the interests of the publishing institutions and the dependency on technocratic approaches limits the discussion. In regards to M&E, Nathalie Holvoet and Heidy Rombours (2008) note that “several multicountry reviews…point to a bias towards methodological and technical issues, to the detriment of broader policy, institutional and systemic issues”. (p. 579) Holvoet and Rombours consider this “deplor(able)” and identify the “denial of politics” as “one of the most serious flaws” of the new development paradigm. (Holvoet & Rombours, 2008: 577) An instructive investigation into this problem is undertaken by M.A Thomas

(2007), who considers the World Bank’s success in regards to combating corruption in developing countries. Thomas concludes that despite the greatest part of World Bank funding being directed towards the rule of law, the justice system and public administration, the World Bank is unlikely to succeed in countering corruption. Thomas explains that because of “legal and institutional constraints conceived to ensure the Bank d(oes) not engage in political activity, as well as the Bank’s bureaucratic and political constraints,” the World Bank’s research remains effectively blind to the problems of ‘neo-patrimonial’ politics. (p. 740) Amongst these constraints is the technocratic approach upon which the World Bank was built upon, as a result of which “staff are not expected to be familiar with the political economy of the countries with which they work, and consequently many are not only innocent of the local specifics, but unaware of political economy as a field”. (p. 741) Thomas argues that where ‘neo-patrimonial’3 politics prevail, the World Bank is unable to understand that “governments that depend politically on corrupt practices cannot saw off the branch on which they are seated”. (p. 742) This “narrow technocratic vision” (Holvoet & Rombours, 2008: 577) reflects the neo-liberal underpinnings of the new development paradigm, which maintains an oppositional interpretation of government and a trust in market functions, while problems of poverty are considered technical problems to the exclusion of political analysis. Neo-liberalism interprets the ‘invisible hand’ as providing accountability within the

Thomas explains that neo-patrimonial rule is twist on Weber’s concept of patrimonial rule, where authority is not based not on tradition but instead is purchased through the distribution of patronage. This patronage often takes the form of exemptions from the application of laws because this is one of the least expensive ‘patronage goods’ that a government can ‘distribute’. Neo-patrimonial rule is, therefore, incompatible with the rule of law, yet “patronage, not rule of law, is demanded by the government’s supporters” (Thomas, 2007: 735).

3

market and tries simply to reduce activity where the market cannot hold an actor to account, for example in the non-market activities of the government, as opposed to promoting the use of government regulation to achieve accountability. This is the source of neo-liberal small government rhetoric and consequently fits with the promotion of voluntary codes of conduct and philanthropy characteristic of neo-liberal approaches, since de-regulation remains a central principle of policy. This logic is then applied to NGOs, who are understood as competing in a market for contract funding, and thereby as being held largely accountable by the functions of the market. In addition to this, accountability documentation is required by donors, but characteristic of the technocratic approach which aims to remain politically neutral, such documentation is often of a selective and quantitative nature. Yet it is not widely recognized how far from ‘perfect’ the information is that is generated through internal accountability practices. NGOs report their own success, which may be open to manipulation in an attempt to secure ongoing funding. Where donor evaluations are undertaken, such as the World Bank evaluations of the AKRSP, these often consist of short visits by foreign evaluation teams facilitated by the NGO in question, thereby often failing to fully understand the political and social contexts within which the organization under evaluation is working. Where independent third-party evaluations are commissioned by donors, evaluations remain within the “narrow technical view” as illustrated by Holvoet and Rombours, since they are commissioned by technocratic donor agencies. Furthermore, third-party evaluators, usually NGOs, also have an interest in not upsetting the development order, where they struggle to survive in a competitive market for contracts,

relying both on lucrative evaluation contracts and winning contracts for the execution of projects.

LESSONS LEARNT The present case study of the AKRSP reflects that • religious affiliation has been an extremely effective tool in sustaining community engagement through local development bodies based on participatory principles, evident in the success of the AKRSP in Ismaili regions but failure in non-Ismaili areas. • with over 25 years in the region, the AKRSP has at once circumvented common issues related to short-term funding of NGO projects but on the other hand has persisted beyond an initial decade of high staff motivation and idealism which had brought about a ‘golden age’ of success. Where the long engagement period of the project represents some major advantages, it has also allowed the AKRSP to slip into bureaucratization, nepotism and ineffectivity. • M&E processes, including internal, donor and independent evaluations, both through third party NGOs and major institutions such as the World Bank, fail to reflect realities on the ground. The case of the AKRSP supports an increasing body of literature that finds the technocratic approaches prevalent to M&E processes fail to pick up on political and social dimensions, despite the prevailing paradigm’s new emphasis on local context. • the AKRSP has substituted government in many realms, as a result of which the

government has failed to develop its own capacity in the region, while talented individuals have been diverted to employment within the AKRSP given its better pay and conditions than that provided by government employment. • the AKRSP has had difficulty reaching the poorest and women, suggesting that participatory approaches remain limited in their ability to break free from local traditions of hierarchy. It is noted that these groups are also considered the most vulnerable in a market-based system, such as that that the AKRSP seeks for Gilgit-Baltistan.

CONCLUSION The present study has undertaken a broad review of the AKRSP as a case study of new paradigm development. Where the AKRSP has been found to be extremely successful in some fields, the present study has found this success rests less in the strategies of the new development discourse, such as participatory development, and more in the religious nature of the organization. This crucial facet of the AKRSP’s work, however, remains largely unstated in order to comply with funding institutions and is not picked up in deficient M&E processes, despite extensive and additional evaluation, over and above the demands of donors, being undertaken in the case of the AKRSP. The ability of the AKRSP to attract funding and achieve broadly recognized success has not reflected realities on the ground since the end of the organisation’s ‘golden age’. This suggests that new paradigm strategies of participatory development may be serving an important legitimizing function for the AKRSP without fully achieving the success reported through AKRSP documentation. The present case study, then, supports the claims of London University Professor Ben Fine, who argues that the

new paradigm, constituted by market-oriented underpinnings with an overlay of social rhetoric relating to participation and local context, is “primarily be(ing) used to legitimize the continuation of neo-liberal policies in return for aid, albeit under the guise of being more state-friendly and promoting the functions of both market and non-market”; (Fine, 2002b) the new paradigm represents the addition of participatory approaches and devolution to the old market-based policies of open trade and investment and cements the role of the NGO sector in offering service provision and project management as an alternative to the formal government sector, in regards to which the Washington Consensus characterization of rent-seeking and inefficiency remains. The AKRSP’s success in the international arena can thus be viewed as the result of compliance with new paradigm rhetoric of secular rural development based on participatory development principles against a backdrop of market-oriented development strategies, rather than as the result of “fully achieved” replicability (World Bank, 2002) or “continuing achievements in organizing the poor into sustainable self-governing institutions”. (AKRSP, 2008) The findings of the present study have important implications of the formulation of development policy at all levels, providing evidence that supports the crucial role of development experts from outside of the NGO and donor sectors in informing development policy. This conclusion is supported by the failure of M&E process to fully evaluate the work of the AKRSP within the local social and political context, resulting in a gap between policy and practice and ill-informed policy and funding decisions, a conclusion supported by the academic literature. (Holveat & Rombaurt, 2007)