Parallel Capitalism
By: Farhat Abbas Shah
It is important to stand on the foundations of an appropriate Ideology to sustain for centuries. Otherwise any scenario can not be persistent for a worth able period.
Although I use to be involved directly or indirectly with different researches, I have got during diverse surveys and other field works lot of side information about microfinance sector. Different scenarios teaches me a lot and mostly it is in the perspective of Pakistan. Other than researches I spend most of my time in studying about microfinance world. As well as Pakistan is concerned the chances to have direct and first hand experiences being availed by me are meaningful and consequential. Since last two years I have been implicated in microfinance borrowers, community, intellectuals , police, bureaucracy, politicians and microfinance leaders as well. The first impression I got that the Pakistan is a very fertile country for microfinance. People are very responsive towards the sector(microfinance sector). Apparently, Pakistan is a religiously fundamental country but any issue never occurred regarding interest or interest rates. Even the commercial banks are still more successful than the Islamic banks. Though there is a large untapped market exists like a full-grown crop and anxiously waiting for any Islamic financial product. According to my humble philosophy of microfinance, it should be at the basis of “PARTNERSHIP WITH POOR” which we may call Parallel Capitalism.
Parallel Capitalism can be defined as an ideology of distribution of resources of the countries among the poor in the shape of providing them basic facilities of Shelter, food, health, education, respect and business opportunities to grow up at the level they can reach.
PARTNERSHIP WITH POOR IS the methodology which can be the extra ordinary long term, successful, profitable business. The life cycle of this methodology can stay alive and triumphant until hundreds of years. Because it has a very natural and true ideology behind and has a very strong philosophical basis of Parallel Capitalism. Every human being living on this earth has rights to live (as the charter of human rights tells ). They have rights of ownership of natural resources of their home lands and the other parts of the earth where they are living with productivity. If I am not wrong, this is the actuality of microfinance. Definitely poor are the share holders of the natural resources but their productive level will determine. the size of there share. The country like Pakistan where the governments have not been able to provide to the poor people of the country even a lean sort of fulfillment of basic needs. The helpless poor need a strategic way or source to claim for their rights of the natural resources. It can be evaluate the worth of natural resources and after turning them into liquidity they can be pay back to the poor in the shape of standard health facilities, education, food and microenterprise on partnership basis. So that they become productive with sufficient capital. Only the microfinance with the methodology of PARTNERSHIP WITH POOR and with all its social performance package is the mode which can assists the governments to make a justified distribution of resources of the universe among the poor particularly destitute. Mean to say the poor people of the third world have also the rights to live with dignity and self respect. They have their own capital as well in the shape of natural resources of their countries where they have born but their governments have not technology to exploit and utilize these resources even to fulfill their basic needs. So United Nations or World Bank or any committee along with the representative of that country can play the roll to rule out this responsibility to operate the assets of the poor for the poor and should directly pay back the poor in the shape of “fishing rod”, on the basis of entrepreneurial partnership. In the case of any loss, especially by the natural disasters must be protected by an innovative insurances product.
As well as the methodology of Partnership with poor is concerned, this is the only attitude can also accomplish the requirement of Islamic Microfinance. The country like Pakistan becomes a leader of Islamic Microfinance by availing this methodology. If Saudi Arabia or Pakistan will take the initiative they may set an example for other different countries. Any of Saudi Islamic Bank and Pakistani Market may be a good combination for the success of this true Islamic product. There is an interesting thing that the methodology of partnership with poor is simultaneously It is a product also as well as a methodology. It is not such difficult to develop partnership with poor on investment and labor basis. Microfinance to invest money , partner (poor) to invest skills and third party to insure the loss, and the other modalities can be easily placed. In this methodology the ratio of profit &loss can vary according the settlement between two parties. The micro market of Pakistan has a lot of potential of such a type of innovations and initiatives. However, the over all present leadership of microfinance in Pakistan is more than a submissive rather apologetic and not ready to come out openly to stand with poor community. That’s why there is not a single leader in Pakistan like professor Mohammad Yunus, while the Pakistani society is a personality worshiping according to their sociopolitical mind set.
Pakistan, Being an agricultural country is also a vast potential agricultural market which is waiting for custom made financial products , can meet the needs of the farmers and poor peasants exactly. Most of the people living in rural areas have been growing and cultivating as their basic source of income. While during the seasonal unemployment they start other businesses like fruit shops, milk shops, labor on daily wages, e.t.c. A few of them start travel to the cities. Similarly urban citizens run their micro enterprises. Poverty and unemployment are a carnage for them. More than seventy percent people are like a yield for microfinance even during seasonal unemployment. And the area of SME is ready to reassure a long-term profitability for investors too. These facts are not any secret but the behavior of microfinance Leaders is very contrite and clandestine by their attitude. They are running their institutions like passive organizations. A few have sustainable microfinance institutes are successful but their success is only because of the need of the poor people and by the miracle force of microfinance. Other wise the leaders could not prove their selves as spot on leaders, Even they hesitate to face the public. They put out of sight their selves like blameworthy persons. Excluding only 3 to 5 microfinance leaders, rest of all of them is not making the grade to promote microfinance as a life changing phenomenon and even do not have any popularity among the community and even don’t have any social and political influence. The main reason of this malfunction is lack of a strong ideological foundation. While the notion behind the social performance movement is a strong philosophical base of microfinance to bring a universal social change by poverty alleviation. To work for a largest population of the world, with the will to provide them not only basic facilities as food, education, health, shelter but also awareness and training to make sustainable their lives by their own. The exquisiteness of this Ideology is to place them on the way of individual economic successes and achievement as well as collective. If a destitute has a will to do and also have the basic capability, Microfinance is happy to facilitate him or her to become a business or societal tycoon. This is also the gorgeousness microfinance.
Government of Pakistan has called for expression to start corporate forming. According to the ministry of agriculture “out of total 79 million hectares survey of57million hectares had been done and documented, while 22 million hectares had not been surveyed. Paksitan has about 8million hectares of fertile and cultivable land in four provinces besides hectares of barren land, which can be used for crop production by developing corporate farming and for maximization of agriculture production in the country.
Now this is a very lofty opportunity for microfinance sector to come in this field and to win millions of possibilities to engage the poor in productivity and facilitate them with all basic need fulfillment. The government of Pakistan has not shown any interest to serve the poor by corporate the land. It can be an occasion in the shape of strengthen the microfinance sector to avail the chance of designing new products and income generating side activities. If this corporate farming occurs, millions of entrepreneurial businesses would begin. The future of microfinance is golden in the country but there should be a high level leadership of ‘Parallel Capitalism’, which can negotiate for poor on every step. This Leadership can be emerged but only by performing the social responsibility of microfinance industry.
According to my point of view where the governments are working for only some money making politician’s networks and like minded groups, the third party should play a pivotal role to manage the natural resources of that country for the benefit of poor community and that country’s development also. Third party may be a committee consist of the representatives of poor, government and international community. In this perspective UNO or World Bank can play the role of a watch dog because for long term sustainability of poor it is inevitable to strengthen the mission of poverty alleviation. Some how to fulfill this very noble cause, it needs a strong and deep rooted microfinance leadership having a sound Ideology and commitment. Although it cannot be seen in Asia, particularly in Pakistan, but it can be built. Especially when the slogan of partnership with poor would be phrased. The Ideology will come up automatically when the business leaders will stand with poor and will develop the strategies for them and their homelands to make the world paradise for them being the true leaders of microfinance and poor community as well with the power of Parallel Capitalism.