July 9, 2007


Do Business and Islam Mix? Ask Him (G. PASCAL ZACHARY, 7/08/07, NY Times)

HE is a moderate Muslim religious leader and a descendant of the Prophet Muhammad. He is also a twice-married jet-setter, and he owns hundreds of racehorses, valuable stud farms, an exclusive yacht club on Sardinia and a lavish estate near Paris.

He has poured money into poorer, neglected parts of the world, often into businesses as basic as making fish nets, plastic bags and matches, while also teaming up with private-equity powerhouses like the Blackstone Group on a huge $750 million hydroelectric system in Uganda.

And as he tries to present a less threatening face of Islam on the global business stage during a time of war, the Aga Khan — one of the world’s wealthiest Muslim investors — preaches the ethical acquisition and use of wealth and financial aid that promotes economic self-reliance among developing countries and their poorest people.

In a rare interview, the Aga Khan, who is chairman of the Aga Khan Fund for Economic Development, a for-profit company based in Geneva, says he is more concerned with the long-term outcomes of his investments than with short-term profits. Rather than fretting daily over the bottom line, he says, he tries to ensure that his businesses become self-sustaining and achieve stability, which he defines as “operational break-even,” within a “logical time frame.”

“If you travel the developing world, you see poverty is the driver of tragic despair, and there is the possibility that any means out will be taken,” he says in a telephone interview from Paris. By assisting the poor through business, he says, “we are developing protection against extremism.”

The company’s main purpose “is to contribute to development,” he adds. “It is not a capitalist enterprise that aims at declaring dividends to its shareholders.” Central to his ethos is the notion that his investments can prompt other forms of economic growth within a country or region that results in greater employment and hope for the poor.

Economic developments experts say the Aga Khan’s activities offer a useful template for others — including philanthropists like Bill Gates and George Soros — who are trying to assist the world’s poorest by marrying business practices to social goals, but whose foundation work usually stops short of owning businesses outright in poor countries.

Paul Collier, an economist at Oxford University who specializes in the problems of poor countries, says he believes that aid agencies could benefit from operating more like venture capitalists — and more like the Aga Khan. [...]

THE Aga Khan was born Prince Karim in 1936 in Geneva. He grew up in Nairobi during World War II, and he attended a Swiss boarding school before he was named imam at age 20.

There have been 49 Ismaili imams over the centuries, but only three previous Aga Khans, a title the King of Persia bestowed on the family in the 1830s. The third — the current Aga Khan’s grandfather — was Sir Sultan Mahomed Shah Aga Khan, a legendary figure in colonial India who later moved to Britain and served as a president of the League of Nations.

Upon his death in 1957, Shah Aga Khan’s will instructed that his son (the current Aga Khan’s father), Aly Khan, be passed over in favor of his grandson, Prince Karim, who was studying Islamic history at Harvard at the time.

That the Aga Khan attended secular universities, wore Western dress and espoused Western values reflected his sect’s historical need to adapt to varying cultures. The Ismailis are a minority within the minority Shia branch of Islam and have experienced frequent persecution through the centuries; as recently as the 1990s, the Taliban in Afghanistan persecuted Ismailis.

Over the centuries, as the Ismailis dispersed across Asia and Africa and later Europe and North America, they often adopted Western ways. This invited criticism from other Muslims, who questioned how someone could wear a suit and still call himself an imam. But Ismailis say they see no conflict between Westernization and their faith.

“The central trait of their long history is a remarkable tendency to acculturate to different contexts,” says Ali S. Asani, a professor of Indo-Muslim languages and culture at Harvard and an Ismaili.

Posted by Orrin Judd at July 9, 2007 11:08 PM

Any relation to A.Q. Khan? Selling nukes requires entrepreneurship.

Posted by: Gideon at July 10, 2007 1:27 AM