June Issue 2015

By | Economy | Business | Published 3 years ago

While addressing a press conference in Karachi on May 18, Interior Minister Chaudhry Nisar disclosed that the country’s law enforcement agencies were close to arresting those behind the killings of Ismailis in the bus attack in Safoora Goth. Two days after Nisar’s visit to the provincial capital, Sindh Chief Minister Syed Qaim Ali Shah announced that four of the Safoora attackers were in custody, and that they had allegedly also confessed to the murder of social activist and T2F director Sabeen Mahmud. Those arrested are said to be graduates of the Institute of Business Administration, Karachi, Sir Syed University of Engineering and Technology and the Karachi University.

On May 13, 60 Ismaili followers of the Aga Khan, travelling on a bus belonging to Al-Azhar Gardens, an Ismaili gated community on Super Highway, to a community centre in Ayesha Manzil, were stopped by gunmen near Safoora Goth and fired upon indiscriminately. At least 45 people were killed and 13 injured.

Karachi has long had a reputation for sectarian violence. As faith-based killings by groups such as the Tehreek-e-Taliban Pakistan, Lashkar-e-Jhangvi and Al-Qaeda, who consider Shias infidels, continue countrywide, the May 13 attack on Ismailis is perhaps the worst incident of its kind in recent years. And the manner in which it was carried out provides an uneasy contrast with the peaceful image of this tiny Shia minority.

But Aga Khanis have been targeted in the past too. In August 2013, twin hand grenade attacks at jamaat khaanas in Karachi’s Metroville and Ayesha Manzil areas had killed at least two Ismailis and injured 28 others. The Taliban had also announced an “armed struggle” against the Ismailis in Chitral, accusing the Aga Khan Foundation of brainwashing people away from Islam.

Earlier in March, a time-bomb explosion outside Saleh mosque – belonging to the Dawoodi Bohra community in Karachi’s Aram Bagh area – claimed the lives of two men. The explosion took place right after Friday prayers. In September 2012, at least seven people of the same community, including an infant, were killed in twin blasts that rocked the Karachi neighbourhood of North Nazimabad.

In Karachi, both Ismailis and Bohras are largely known for their business enterprises and philanthropic ventures such as schools, hospitals and in socio-economic development projects. Prince Karim Aga Khan is a major contributor of development funds for the country and both the Shia minority sects contribute significantly to the economy through their businesses, mainly in the manufacturing and tertiary sectors.

“The topmost priority for Ismailis is education and health. While Karachi was shut down for a day after the Safoora attack, the Aga Khan educational and medical institutions were working in full force,” says a university professor who belongs to the Ismaili community and asked for anonymity. “The Aga Khan community has a different system of welfare. It does not want to create dependency, but there should be respect and alongside the person’s need should also be fulfilled.”

“We have the oldest educational institutions in Karachi, including primary and high schools,” says a Bohri entrepreneur based in Karachi, who also requested anonymity. “Bohris are also involved in healthcare. Burhani Diagnostic Centres all over the city provide emergency services even to other communities on minimum charges, and often free of charge.”

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Coupled with poor infrastructure and non-availability of civic services such as water and electricity, Karachi has also been in the throes of a devastating law and order situation, i.e. bomb blasts, rising extortion demands and target killings during the last three decades. This has obviously impacted business. Over the years, there has been a combination of transfer of capital, reduction in further investment, and cautious planning of new ventures by entrepreneurs.

“The terrorism issue, compounded by blatant corruption, has disheartened businessmen. Due to the worsening security and safety environment, many businessmen came to the logical conclusion that transferring part of their capital to foreign lands would be a prudent step,” said Majyd Aziz, former president of the Karachi Chamber of Commerce and Industry (KCCI), in an email interview to Newsline.

Businessman Amin Hashwani adds, “Criminal elements are there in every society and will manifest themselves in many forms whenever there is a vacuum created due to maladministration, lack of meritocracy, or ill-founded political priorities. Karachi, unfortunately, has suffered very badly in all of these areas for many decades.”

The question remains: Can particular incidents such as the recent attacks on Bohris and the Aga Khanis, who are essentially business-oriented, hurt their commercial interests, thus affecting the economy of Karachi?

“I do not think there will be any additional impact on their businesses. Keeping in view the situation of Karachi, over the years everyone has adjusted,” says political economist Akbar Zaidi. “The economy and business of Karachi was most affected in the late ’80s and early ’90s during the rise of the MQM. There were regular strikes, and scores of industrialists and other entrepreneurs shifted their businesses to Punjab, and other countries, including the UAE. As far as business activity is concerned, I do not think it will be affected by the Safoora incident. These communities will continue to trade.”

Explaining his point further, Zaidi says in Karachi there have been times when entire markets were ravaged by fires but life goes on. With a population of 20 million now, he adds, one sect or individual does not have enough control that it could hurt the city’s business interests for long.

The Bohri entrepreneur, speaking in his personal capacity, agrees with Zaidi. “We [Bohras] haven’t reached the stage where we should be thinking of moving our businesses abroad. But for those who want to go out for better prospects, such incidents provide them an additional reason to justify their position.”

However, Aziz has a different point of view. “Whenever there is a major tragedy due to terrorism, the business community feels the government is totally incapable of dealing with the situation. The Safoora Goth massacre gave further credence to their opinions. If the trend to reduce capital exposure in Karachi and transfer to other comparatively safe environments continues, this would have a depressing impact on the economy.”

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The former KCCI chairman claims Dubai has been a recipient of over US$ 7 billion in transfers from Pakistan into its real estate sector since the property boom in the UAE. “Full-page advertisements in newspapers attract Pakistani investors to buy property in Dubai everyday. This is a dangerous signal and the government has not been able to control it.”

Still, all cannot be measured in monetary terms. There are invisible opportunity costs that are paramount.

“A fear factor is being created in the community, and the youngsters have a feeling of uncertainty,” says the Ismaili professor. “The youngsters of our community settled abroad are persuading others to come. Aaja aaja tu bhi aaja, tu bhi idher aaja.

While the elders of the community are rooted in this country, adds the professor, such incidents cause the younger generation to seriously think about moving.

“People have no hope in Pakistan’s  future. After the incident, I’ve heard youngsters saying that it is probably time to leave Pakistan. ‘When we have the resources, sponsorship and an opportunity; why don’t we leave Pakistan?’ Hum Pakistan se bahir reh kar Pakistan ki zyada khidmat kersaktey hain. Yahan to survival he mushkil hai. Zinda rahaingay to contribute keraengay na.”

However, the migratory trend is not limited to the entrepreneurs or the minorities. It’s not just the Shias, Sunnis, Ismailis, Bohras, or Christians who want to leave Pakistan.

“I think, many people, including youngsters, if they get a chance to leave Pakistan, they will. This is because they do not feel safe here, and there is uncertainty about their career prospects,” contends Zaidi. “When I ask my students whether they will leave Pakistan if provided an opportunity, the answer is always yes. They may have issues such as permission from parents or the lack of resources, but they all wish to move.”

Aziz revealed that over the years nearly 1,500 Memon families have migrated to the UAE. In many cases, women and children shifted while men shuttle between Karachi and Dubai. This gathered speed during the Dubai real estate boom and the deteriorating law and order situation in Karachi. “Kidnappings, corruption and political instability spurred the decision to shift capital and family,” he says.

As estimated, Karachi generates 65 per cent of Pakistan’s revenue. Hence, one can argue that if the metropolis’ security situation improves, there can be better economic prospects for everyone. For this purpose, the ruling PML-N government in September 2013 initiated the Karachi operation to rid the city of criminal elements. The resolve was given momentum with the announcement of the National Action Plan (NAP) after the Taliban attacked the Army Public School in Peshawar in December last year. Furthermore, time and again, the country’s civil and military leadership has expressed its resolve to take “the Karachi Operation to its logical end.”

“These actions give hope. As long as there is hope for better days ahead the innumerable losses that this city has suffered for so long are all reversible,” says Hashwani. “The people of this city have demonstrated unprecedented resilience in the past. All they need is some hope to turn things around, which in my opinion is, once again, slowly creeping back.”

According to police data available with Newsline, due to the surgical operation, average killings in a day have reduced from 7.6 in 2013 to 2.62 in 2015.

Meanwhile, as far as the national economy is concerned, there have been significant developments. The International Monetary Fund has said that the economy has improved due to prudent fiscal and monetary policies. But, as Hashwani says, economic policies have a greater impact on a national level. Karachi has a specific law and order situation, and the city needs a decent infrastructure, business-friendly environment and all the political players on the same page.

Aziz, who is also a director at the Zarai Taraqqiati Bank Ltd, wants the operation to be intensified otherwise people will lose faith. “The police has to be immediately depoliticised and ordered to ignore and disregard political pressure. Mere optics during the operation does not bode well. Businessmen are watching the situation in a worrisome and cynical manner,” he says. “The ball is in the court of General Raheel Sharif, who must order all-out action against criminals and terrorists, no matter where and under whose patronage they are. Peace in Karachi is vital if there is to be a safe and secure Pakistan.”

This article was originally published in Newsline’s June 2015 issue.

Waleed Tariq is journalist. He can be interacted on Twitter @WaleedTariq89