Mr. Christopher Candland is a Associate Professor, Political Science Department and Director, South Asia Studies Program in Wellesley College .

I want to begin by giving you some background on how I came to decide to write about faith and philanthropy in Pakistan. I had been a graduate student in Karachi, at the Applied Economic Research Centre, in 1992 and 1993. After that I had the good fortune of teaching about Pakistan, and other South Asian polities, since 1996 at the University of California Berkeley and since 1999 at Wellesley College, one of the premier women’s colleges in the United States.

In the years since my first visit to Karachi, I witnessed, like everyone else, that the focus of international media and scholarly attention directed toward Pakistan was on political violence and national security. I undertook the book project on faith in philanthropy in Pakistan because I want to do my part to correct the overemphasis on political violence and national security. Pakistan has a great deal more to offer the intelligent observer than negative lessons related to political violence and national security. One of the characteristics of Pakistanis that I have found most satisfying is everyday humanitarianism. Thus, about a year and a half ago, in September 2009, I began to write about private philanthropy in Pakistan.

But even setting aside the political and security challenges that occupy the attention of the media and scholarship on Pakistan, as my choice of topics intends to do, Pakistan does face some very serious economic, environmental, and social challenges. Pakistan, however, is not unusual for these challenges. Far from being an exceptional case, Pakistan exemplifies each of the main trends that characterize most of the so‐called “developing” world. Pakistan, like much of the world, is marked by the persistence of colonial institutions of governance; declining trust in government; population growth rates that are unsustainable; demands on government expenditure that exceed government capacity to raise revenue; under‐investment in public education and under‐investment in public health; conspicuous, imitative consumption by a minority who have massive disposable income; privation and servitude by a majority who have little or no disposable income but do have crushing debt; unsustainable exploitation of natural and human resources by the rich and by the poor; and rising income inequality and social exclusion. Most of these trends are common to the so‐called “developing” world and quite common in the so‐called “developed” world as well, including the United States. I start the book project with questions about the deplorable conditions of life for most people in Pakistan. Why does Pakistan’s economy, at least as measured by gross national product, grow rapidly but also create greater numbers of people and percentages of the population who must live in poverty? Why are 9 million Pakistani girls and women missing from the Pakistani population? Also at the beginning of the book, I consider the place of human insecurity and suffering in Pakistan in the consciousness of people outside of Pakistan. Why does the murder of thousands of people on a single day, as occurred on September 11, 2001, lead to a multi‐year, multi‐trillion U.S. dollar commitment to prevent such a horror from happening again, while the death of thousands of people every single day from preventable illnesses for years on end lead to a small fraction of that commitment? I then proceed to some questions about the Pakistani government and Pakistani state. How is Pakistan governed? Who does the Pakistani state serve? Why do people turn against authorities entrusted to protect them?

Other preliminary questions are about Islam as an identity. What are the dominant currents of Pakistani Muslim political identity? Who is considered to be a Muslim? And who has the authority to make such a determination? What makes a political party [quote] “Islamic” [close quote]? How does one determine if an organization is [quote] “Islamic” [close quote]? Who has the authority to make such determinations? How Islamic are Pakistan’s professedly Islamic laws? The central questions focus on faith in general and Islam in particular as forces for social welfare, on the role of Islamic philanthropies in the amelioration of human suffering and promotion of everyday human security in Pakistan, and on the impact of a state sanctioned religion on the work of the faithful, especially from within that religious tradition. How similar is the Islamic concept of charity to the Christian, Hindu, Parsi, and Sikh concepts of charity? What are the institutions that are inspired by Islam to assist the poor and the needy? Who, according to Islam, deserves charity? How well, or poorly, have governments in Pakistan managed Islamic social welfare agencies? How, in practice, does the government collect and distribute zakat? How is zakat collected and distributed by partisan and private associations? What happens to zakat funds when the government collects and distributes these funds? Why have madaris, institutions of Islamic learning, been turned into institutions of social welfare? Are madaris, as is commonly alleged, “breeding grounds for terrorism”?1 Do Islamic philanthropies undermine or advance female security? Do Islamic philanthropies encourage people to appreciate that they have a right to protect themselves from harm? How effective are state, partisan, and private Islamic philanthropies in providing human security? How well do government, partisan, and nonpartisan Islamic philanthropies perform? Under what conditions do Islamic philanthropies work most skillfully and effectively? How have Islamic philanthropies been affected by the confessional character of the Islamic Republic of Pakistan? Do weak states promote strong voluntary welfare sectors? Finally, what are the implications for international development policy? What can foreign governments do – if anything – to improve the effectiveness of Islamic philanthropies in Pakistan? 1 See, for example, Christiane Amanpour’s interview with Pakistan President Pervez Musharraf, CNN, September 30, 2011.

Before going any further, I should say that I find the very notion of “Islamic charities” to be potentially misleading, for two reasons. The use of the adjective “Islamic” tends to suggest that there is some decisive authority that can determine what is and what is not in accordance with Islam even as the Quran itself repeatedly cautions people to avoid assigning such authority to anyone other than God. Further, charity is a concept that has been characterized by Christian notions of suffering that are not fully compatible with the Islamic notion of khidmat. A better English language phrase for the subject of my study is “social welfare associations that are inspired by Islam.” The notion of “Islamic philanthropy” is not much better. It is my perception that most philanthropic work motivated by Islam is as much about the recognition that God perceives and judges all that one does and will consider these in determining ones dispensation in the life hereafter as it is about love of mankind (φιλο ανθροποσ). Islam, of course, is not the only religion in Pakistan; and Muslim philanthropists are not the only philanthropists in Pakistan. There are significant communities of Christians, Hindus, Parsis, Sikhs, and other religious communities in Pakistan. The charitable work of some of these communities is very significant. Consideration of these communities and their philanthropies allows us to address questions related to how faith and religious groups work to promote human development and human security. But most of my attention in the book manuscript is devoted to Islam and Islamic philanthropies. This is not merely because Pakistan’s population is predominantly Muslim. Rather it is because a central question is how a state religion affects philanthropic work in the tradition of the state‐sanctioned religion. The central methodological problem of this study is to distinguish between the religious and the secular. Dr. Ahkter Hamid Khan, for example, was motivated by his faith. And the social welfare programs with which he was associated – the Comilla Project, the Orangi Pilot Project, and the Aga Khan Rural Support Programme – reflect that faith in the dignity it confirmed to the beneficiaries of these projects. But nowhere did Ahkter Hamid Khan make a public declaration of his faith. To put the same methodological problem contrapositively, those individuals and charities that make public pronouncements about their “Islamic” credentials are very often the least faithful to the spirit of

Islam. The problem of distinguishing between the religious and the secular is difficult enough when simplicity, honesty, humility, and service to others are the manifestation of ones faith. But the problem takes on an additional complexity in a polity wherein declarations, not manifestations of faith, are the dominant legitimizing strategy. My approach to this methodological problem is to consider all philanthropies that are not explicitly secular. Another methodological issue is that it is difficult to gauge the size of the Islamic welfare sector in Pakistan. As many, if not, most of the social welfare activities inspired by Islam are informal, they cannot be adequately gauged by estimations of the work of registered associations. Unregistered associations and anonymous individuals provide many of the services of the Islamic welfare sector without public recognition. One might safely assume that Pakistan’s nearly two million madaris students are studying as a result of the generosity of others. And one might estimate, accordingly, that, as there are roughly 22 million students in government schools and another 13 million in private schools, that 6% of all Pakistan students are studying as a result of charity. But this would be a serious underestimate, as many individuals are paying tuitions for children at government and private schools. Further, as most philanthropic work is done on a voluntary basis, it cannot be adequately measured by estimations of money raised or services paid for. The bulk of the book manuscript is a description of the work of several dozen associations doing social welfare work in the spirit of Islam. These are listed on a handout. These associations include those doing educational, financial, legal aid, heath and other social services in the name or the spirit of Islam. Social services provided include the distribution of cash and food, including the meat of sacrificed animals [qurbani]; maintenance of public kitchens and provision of free meals [langar]; distribution of clothes; provision of education and scholarships; provision of medical services and financial aid for medical treatment; provision of emergence shelter, relief, and rehabilitation; provision of marriage counseling, wedding, and divorce service; and provision of funeral services and burial plots. We have time to discuss only three of the many associations about which I am writing: the government’s zakat collection system; Akhuwat, an Islamic microfinance association; and the Muttahida Quami Movement’s Sun Academy. I choose these three, in part, because they represent initiatives in the government, the non‐partisan private, and the partisan sphere.

As a part of his effort to make Pakistan “an Islamic welfare state,” General Zia ul Haq, President and Martial Law Administrator, promulgated the Zakat and Ushr Ordinance in 1980. This made zakat a form of government taxation. The governments of Kuwait, Pakistan, and Sudan are the only governments that make zakat payment to the government mandatory of some Muslims.2 Even in Saudi Arabia, where the Quran is used as the constitution, the government does not collect zakat. Instead, businesses and individuals are "invited to contribute zakat," which is seen by some as a very strong recommendation that they do so. The Zakat and Ushr Ordinance created the Ministry of Zakat and Ushr and authorized the government to collect 2.5% from individual and corporate accounts and stock assets (5% or 10% if assets are derived from non‐irrigated and irrigated land, respectively) and to distribute these funds through private charities, such as Imran Khan's Shaukat Khanum Cancer Hospital, and through government appointed citizens zakat committees at federal, provincial, and local levels.3 There are twelve kinds of accounts from which zakat is deducted: individual accounts (holding over Rs. 3,000), fixed deposit accounts, government and other securities, life insurance policies (when they mature), notice/deposit certificates, mutual fund certificates, provident funds, and units of the National Investment Trust.4 Originally, the threshold was Rs. 1,000. It was raised to Rs. 2,000 in 1980, and to Rs. 3,000 in 1983.5 In 2008‐09 the government collected the currency market equivalent of more than US $ 87 million in zakat. 2 On Saudi Arabia, see Jonathan Benthall and Jerome Bellion Jourdan, The Charitable Crescent: Politics of Aid in the Muslim World, (New York: St. Martin's Press, 2009), 11. Philanthropy in Pakistan: A Report of the Initiative on Indigenous Philanthropy, (Aga Khan Development Network, 2000), 4 notes that “Sudan and Pakistan are the only Muslim states (sic) to operate an ‘official’ zakat system.” Nathan Brown notes that there is a new zakat law in Kuwait (April 2010). These claims need to be verified. 3 The Central Zakat Council, in 2009, approved distribution of zakat funds to several hospitals, including the Shaukat Khanum Cancer Hospital, in Lahore; the District Headquarters Hospital, in Rawalpindi; the Holy Hospital, in Rawalpindi; the Jinnah Post Graduate Medical Center, in Karachi; and the Rahmatullah Eye Trust, in Karachi; the Shaikh Zaid Hospital, in Rahim Yar Khan; the Children's Hospital Complex, in Multan; the Soghra Shafiah Medical Complex, in Narawal; and the Abbasi Shaheed Hospital, in Karachi. "Zakat Council okays funds for IDPs, quake affectees," The Nation, April 19, 2009 4 Grace Clark, Pakistan's Zakat: An Islamic Public Welfare System in a Developing Country, unpublished dissertation, (University of Maryland, 1985), 212 5 Clark, Pakistan's Zakat, 1985, 212‐213

But people would rather distribute zakat with their own hands than let the government do it for them. Additionally, people think that the government misappropriates zakat funds. When Pakistan faced a debt crisis under then Chief Executive and Chief of Army Staff Pervez Musharraf, the Islamic Ideology Council, which is run by the same ministry that collects zakat, ruled that it was appropriate in Islam to use zakat funds to pay down the national debt. In fiscal year 2011, the Zakat and Ushr Ministry spent Rs. 69.21 million on advertizing in violation of the Zakat and Ushr Ordinance. In the same year, the Zakat and Ushr Ministry spent another Rs. 286.1 million on the “administrative expenses” of zakat committees in Punjab that were not functional, according to the Auditor General of Pakistan.6 As a result of public perceptions that zakat funds are not spent well by the government, there are mass withdrawals from private savings accounts when zakat deductions are made. Shia constitute about 20 percent of the population of Pakistan, and have different beliefs and practices for observation of zakat than Sunni.7 As an article of faith, some Shia, like the Ismaeli, contribute directly to their own zakat and welfare associations. There is an opt out from the otherwise automatic deduction for Shia account holders, and non‐Muslim account holders, but many Shia resent having to make the declaration that they are, not in the eyes of the law, normal [not those who need not file an exemption application] Muslim. Indeed, the zakat ordinance spurred the formation of a militant Shia party [the Tehriq i Nifaz i Faqah Jaffri]. The zakat ordinance also creates problems within the government. The Sindh government announced in 2010 that will retain the zakat funds that it collects rather than turning them over to the central government, which distributes most zakat funds to associations in Punjab. Like other government Islamic welfare programs, government collection of zakat has politicized unnecessarily and created distrust. Akhuwat is a microfinance organization established by a group of Pakistani civil servants. Among them was Dr. Muhammad Amjad Saqib, a medical doctor and a writer, who heads Akhuwat. [I thank brother Fayyaz for making 6 “Warped Priorities: Zakat Funds Used for Publicity Drive: Auditors,” The Express Tribune, (June 13, 2011), 2 7 Pakistan’s censuses do not collect figures on who is Shia. The percentage could be higher.

me familiar with Akhuwat and introducing me to Dr. Saqib.] The story told by members of Akhuwat, whom are now the organization’s trustees, is that they were having dinner together at the Lahore Gymkhana, listening to Dr. Saqib’s description of the Punjab Rural Support Programme’s microcredit program. Dr. Saqib was then running the Punjab RSP and regarded its interest rates of more than 20 percent per year to be exorbitant and counter to the principles of Islam. Mr. Ranjha donated Rs. 1o,000 to start an interest‐free microcredit fund. His wife had given him the money with the instruction to donate it to a good cause.8 Akhuwat began providing interest free loans to individuals in 2001. The fund was registered as a Society in 2003.9 Originally, Akhuwat used the same social collateral method – known as rotating group lending – as the Grameen Bank. Rotating group lending – lending to successive individuals within a group – ensures high return rates because each individual within the group is entitled to a loan only if the previous borrower has repaid her loan. As groups are composed of people who live in the same neighborhood, those who are waiting for their opportunity to take a loan can take measures to ensure that the current borrower repays his or her loan. Mohammad Yunus, the founder of the Grameen Bank, describes this collective monitoring and social pressure as “social collateral.”10 A member of a group only receives a loan on condition that the previous borrower in the group has repaid her loan. Others have referred to this as social coercion. Akhuwat has found that the principle of social collateral allowed groups leaders to exercise undo influence over group members. By 2006, Akhuwat began to phase out its rotating group lending program in favor of lending to individuals. In 2010, Akhuwat began to shift to lending to families.11 Some Islamic scholars hold that a charge to borrowers for operating costs of loans and collection is not interest [riba].12 At the outset, Akhuwat charged 8 author’s conversation with Mr. Mohammad Saleem Ahmad Ranjha, December 18, 2010 9 Friends of Akhuwat, Akhuwat: Microfinance with a Difference, (Lahore: Mahmood Kamboh Press, 2007) 5 10 Mohammad Yunus, “The Grameen Bank Story: Rural Credit in Bangladesh” in Krishna, Anirudh, Norman Uphoff, and Milton Esman, eds., Reasons for Hope: Instructive Experiences in Rural Development, (West Hartford: Kumarian Press, 1997), 9‐24 11 Friends of Akhuwat, Akhuwat: Taruf, Falsafa, Usul, Tariqkar, aur Kuch Aare, [Akhuwat: Introduction, Philosophy, Principles, Method, and Some Opinions], (Lahore: Friends of Akhuwat, 2010), 35 12 That is the position, for example, of Muhammad Taqi Usmani. Others, including Javed Ghamdi and the Jamia Ashrafia, hold that charging for operating costs is a kind of riba. author’s conversation with Dr. Kamran Shams, December 20, 2010

borrowers a membership fee of 5.5 % of loans over Rs. 4,000, which covered about half of Akhuwat’s operating costs. Akhuwat abolished that fee in 2008. Presently, the only charge to borrowers is a Rs. 100 application fee, to ensure that applicants are serious about taking the loan if approved and an optional insurance fee, of 1% of the loan, which, if purchased, pays for the outstanding loan and provides monthly benefits in the case of death or disability during the repayment period of the loan. Akhuwat runs along four principles. Dr. Saqib explained these principles to a group of 70 potential borrowers at the Shah Jamal Mosque in Lahore, where I first met him last December. The first principle is that interest should be avoided, as it is inherently unjust to make money from lending money. Akhuwat does not charge interest. The second principle is that “indigenous” venue should be the base for outreach and lending activities. Akhuwat meets in mosques. The third principle is volunteerism. Akhuwat’s operational staff is paid. But Akhuwat also relies on volunteers, who are paid for expenses, largely transportation related, and may apply for loans, but who are not provided a salary. The senior management is all volunteers. Voluntary social service is a major force in Akhuwat effectiveness. Even the paid staff is motivated by a calling to do social service. The fourth principle is reciprocity. It is not required but strongly encouraged that all borrowers themselves become donors. There was an enthusiastic response to this notion from the potential lenders assembled at the Shah Jamal Mosque.13 Akhuwat has lent more than Rs. 1.1 billion (US $ 12.4 million) and has a return rate of more than 99%. Former borrowers themselves have become donors.14 In 2010, former borrowers provided Rs. 15 million in donations to Akhuwat’s central fund. The third case that I’d like to discuss represents the work of political party affiliated, or partisan, welfare associations. The Sun Academy is a welfare association established by the MQM. In the interest of time, I will not go into any detail. The Sun Academy leases government primary schools and operates private schools in these facilities. My concern with this form of public‐private partnership is that it undermines the responsibility of government to provide essential services to all citizens – including primary education – and allows for increased political factionalism in already factionalized environment. 13 author’s observation December 18, 2010 14 author’s interview with Fayyaz Baqir, Islamabad, December 2, 2010

The major findings are as follows. First, successive governments have failed to provide basic health and basic education to the urban and rural poor. Given the cultural and economic gulf that separates the senior managers of the state, that is, the government, and the ordinary Pakistani, this is not surprising. But given the requirements for building and maintaining a modern state, this is astounding, and directly related to the country’s inability to raise domestic revenue for the operations of the state. Second, the activities performed in the name of improving national security are undermining everyday human security. The erection of a garrison state has made it more difficult for philanthropists to raise funds and for humanitarian workers to reach the needy. The garrison state has also promoted the sentiment among opponents of the government that violence is the only way to make inroads into state power. The coercive dimensions of the state are overdeveloped and the welfare dimensions of the state are anemic. For government, national security always trumps human security. As a result, the state has little legitimacy and there is intense competition between political parties to provide desperately needed social welfare. Third, private philanthropists have provided the bulk of the country’s basic health and education. This is also an astounding reality. Civic engagement by Pakistanis of all classes is very high. Fourth, the comparative study of Islamic social welfare services in several countries strongly suggests that private social welfare services are not more prevalent and more effective in countries where government neglects social welfare services. Some scholars have argued that where government social welfare services are absent, private social welfare services, including those of religious organizations, will fill the void. That is not the finding of the research that was conducted for this work. But if governments consistently fail to provide essential social welfare services – including basic education, basic health care, and disaster assistance – as they have in Pakistan, then nongovernmental associations, including religious groups, will attempt to step in to provide the needed social welfare services. In doing so, and this is the fifth major finding, they are challenging the legitimacy of the state. Under conditions of pervasive government neglect of the social welfare of its citizenry, private associations, partisan and non11 partisan, will challenge and undermine the right of the government to run the state. The sixth, and final major finding, is that in a country where the government claims to be running an Islamic welfare state, the manipulation of religious sentiments for political ends has had a profound impact on the spirituality of the philanthropists who have devoted their lives to the welfare of the masses. Abdul Sattar Edhi is the best‐known philanthropist in Pakistan. His foundation attracts thousands of volunteers and receives tens of millions of US$ dollars annually in zakat contributions. He is referred to as Maulana out of respect for his selfless service to the poor. But when I asked Edhi in January about his faith, he told me that he detests being called Maulana because most religious figures are “crooks” [chor] and that he left religious observance [ibadat] years ago. Edhi told me that his greatest inspiration is Hazrat Abu Zar Ghafarri, a companion of the Prophet Mohammad who was exiled from the Mecca to Damascus for criticizing the Prophet’s successor’s use of public funds for private enrichment. Adib Rivzi is a Karachi based kidney transplant surgeon. He does two transplants every day of the week and has been doing so for decades. His hospital, the Sindh Institute for Urology and Transplantation, performs more kidney transplantations than any other facility in South or Southeast Asia and is funded almost entirely by private zakat donations. When I asked him, between transplants, in what sense his hospital is an Islamic hospital, he responded: [quote] “There is no such thing as an Islamic hospital and there is no such thing as an un‐Islamic hospital. My Prophet treated human beings as human beings. And I do the same.” [close quote] Foreign researchers who work in Pakistan are very fortunate to encounter high degrees of hospitality and great generosity toward scholars and their questions. I am grateful to each of you for listening to me. I would be pleased to hear any comments that you have and to try to answer any questions.