The Blue Sweater: Bridging the Gap Between Rich and Poor in an Interconnected World (38 page)

"I am so happy, too, though I never married. You know, there are so many paths in a life. But the best are the ones where you are living the truth and searching for good and giving to others. Maybe that is what you are finding."

I was stunned. Maybe that is what I was finding. Maybe I just needed someone to remind me.

When our flight was finally called, my new friend walked up to the security woman and lifted her arms to the skies, ready to be patted down in full sight. Her cape lifted to reveal a shirt of green and white gingham-like the uniform of the blue bakery I had started in Kigali so many years ago-tucked into a big green and white skirt gathered at the waist that hit the tops of clunky, black lace-up shoes. Now she really reminded me of a nun, and I found myself grinning a silly, Cheshire-cat smile not unlike hers. It felt as if someone from the heavens had come to me, even if this toothless Bohri woman wasn't exactly whom I'd pictured as my guardian angel.

We'd been working in Pakistan because we felt it was the most geopolitically important nation on earth and because of our assumption that building civil society institutions that enabled people to have greater freedom and choice was critical to the country's long-term success-to any country's success. In 2002, just around the time Wall Street journal reporter Danny Pearl was kidnapped and beheaded, we went to Pakistan and determined that the most compelling opportunities were in two areas in which Acumen had not previously been involved: microfinance and housing.

Roshaneh Zafar, founder and CEO of Kashf, now one of Pakistan's largest microfinance institutions, became our partner in bringing financial services to Pakistan's poor. Roshaneh is an extraordinary, indomitable leader with long, black hair and penetrating eyes, a slender frame, and fingers adorned with oversize rings. She is elegance, beauty, and fierce intelligence personified.

Her father told the story of how Roshaneh had started Kashf despite the odds. With a degree from the University of Pennsylvania's Wharton business school in hand, she'd been working in Washington, DC, at the World Bank when she called to tell him about her idea to start a microfinance organization to lend to women in Pakistan.

"Is this a call for advice?" he asked his daughter, "or just for information?"

He knew the answer to his own question. He also knew there'd be no convincing her not to do it.

She started in 1996 and soon hired her partner, Sadaffe Abid. Over the course of a decade they built an institution serving more than 350,000 women, earning Roshaneh the highest civilian award for service in Pakistan. But the road wasn't without its bumps. In their first year, it cost Kashf $8 to loan $1. The organization needed time to learn, and the funders needed to trust the leadership and have the patience to learn with them. Today it costs the institution less than 8 cents to loan a dollar to the world's poorest.

By 2002, 6 years after its inception, Kashf was serving 12,000 women and moving toward operational self-sufficiency. Acumen Fund supported the organization's growth with a long-term loan priced below marketpatient capital. Recently, Citibank led a $32 million round of financing for Kashf; and Acumen Fund invested $1.5 million in Kashf's holding company as it has now created a commercial bank for the poor. Kashf now lends to more than 320,000 clients, and Pakistan can boast of a model microfinance institution that is setting a standard for the world.

Microfinance's success rests on the ability of low-income women to borrow and pay back small amounts of money in a short period of time. Housing is a more challenging issue. Half the people in Karachi, a city of 15 million people, live as squatters, usually paying rent to slumlords. At the same time, due to the growth of the cities, land speculation is rampant, which leaves little that is affordable for low-income and even middle-class people. Even if a poor person has an opportunity to purchase a home, he or she has no access to a mortgage; in fact, many commercial banks view low-income areas as "no-go zones."

The question was whether you could structure housing finance and development to make it affordable and accessible to all people, not just the very rich. There was also the question of trust: Even when housing schemes were made available, developers too often failed to deliver on promises to bring real housing to low-income areas. And the poor were always hurt the most.

A few rare individuals, such as Tasneem Siddiqui, experimented with different approaches to low-cost housing.

During my first visit in 2002, he explained the philosophy of his organization, Saiban: "We go to the people and live with them, build on what they know, listen to them, and help them do things for themselves."

In his tiny office in his first development, Khuda-Ki-Busti, or City of God, about 18 kilometers outside Karachi, the air was sweltering, but Tasneem didn't seem to notice. Balding at the crown, with longish white hair, Tasneem, in his wrinkled pants with oversize glasses framing intelligent eyes, reminded me of an absent-minded professor.

But this man was a true activist: "I learned incremental housing through 30 years of trial and error," he said, "first in East Pakistan (now Bangladesh) until the war in 1971, and then back in Pakistan."

The concept of incremental housing was based on Tasneem's knowledge about the buying decisions of very low-income individuals. "People in the slums are market oriented, but they usually can't afford to construct the entire house at once. The people gain dignity by doing things for themselves, and our job is to make it possible."

Saiban encourages people to start small with what they can afford. Over time they can expand their houses.

"When we started, we knew the biggest challenge would be to confront people's fear that we might swindle them. All of the rules for Saiban are written on the exterior walls of our offices. Everything is transparent so that everyone, buyer or not, knows our rules. There are no surprises."

He walked me outside in the blazing heat and pointed to the blue writing on the wall of the office building. The Urdu script was large and beautiful, easy to read, and apparently easy to understand.

"But how does it all work?" I asked.

He chuckled and gently shook his head. "It wasn't easy in the beginning. We had to work hard to find our first buyers. We were asking people to live in a new place with no services, a fair distance from their jobs and communities. But there were brave souls willing to take a risk. They would pay $170 up front for the land, and then we required them to live in the courtyard for 10 days. Usually, they would come with some basic covering to protect themselves, but their willingness to sacrifice helped us differentiate the real prospective home owners from the speculators who wanted to buy and then flip the houses. You see, you can't just ask a person if they are poor enough to qualify for a house, but we could learn a lot about their commitment."

"And the hardest part?" I asked.

"Trust. In addition to being transparent with the rules, our manager has lived here among the people since the beginning. He helps resolve disputes 24 hours a day. We listen to the people and let them choose the kind of house they want to build. The poor want a roof over their head, a feeling of safety, services they can rely on. We didn't bring it overnight-it is why we call this incremental housing. In time, this has become a beautiful community."

Today, more than 20,000 live in Khuda-Ki-Busti, and dozens of viable businesses have sprung up to serve it. Churches coexist with mosques and a Hindu temple. A bus service runs into town regularly at an affordable price. Saiban is a model for change.

Tasneem next focused on experimenting with the model in a different place, this time using private land because free public land had become almost completely unavailable by 2003. His starting point: a large plot of land about a 40-minute drive outside Lahore, in the Punjab region of Pakistan. If Karachi is like New York City, Lahore is more like Boston, an intellectual center, just a bit slower, and lovely to behold, where community ties are stronger than in the more urban, individualistic city of Karachi.

Acumen Fund agreed to lend $300,000 to Saiban to purchase land and register it for development. Tasneem was lucky to find Jawad Aslam, a young 30-something Pakistani American businessman with an entrepreneurial streak who had grown up in Baltimore and worked in commercial real estate development until the events of 9/11 convinced him to move to Pakistan and contribute as best he could. Of medium build, Jawad typically dressed in traditional clothing, wore a neatly trimmed beard, comported himself with humility, and worked hard at making things happen for very little money. In his first year at Saiban, this successful US-born businessman earned about $450 a month.

"I want purpose in my work," he told me. "I wouldn't trade it despite the headaches and sacrifices."

Acumen Fund's country director, Aun Rahman, and I flew to Lahore to meet with Jawad about a year after he arrived. Aun was also in his early thirties, more than 6 feet 2 inches tall, with light eyes and a shock of black hair. He grew up in Karachi and attended private school there. After graduating from the University of Chicago, he worked for several years at a prestigious consulting firm. Still, he understood the challenges of low-income markets. He'd spent a year as our first Acumen fellow working with Saiban in the slums outside Karachi. The experience opened his eyes to the realities of the poor and reinforced his commitment to doing things differently, which made him the right person to lead our efforts in Pakistan.

We were eager to visit the site, though Jawad did his best to lower our expectations. "I know you won't believe that a year has passed and we're still not registered. Just please don't think I've not worked hard enough, for work is all I do. And since the land isn't yet registered since we refused to pay speed money, you realize we will be visiting an open field, yes?"

"What are the registrars like?" I asked, imagining brutes intimidating buyers to pay bribes for the right to own title on something for which they'd paid.

Jawad laughed out loud. "Think instead of a one-armed 31-year-old, as skinny as a broomstick, who used every excuse in the book to avoid me. I can't tell you how many times he canceled meetings because `it was raining.' And there was nothing I could do about it if I were to play by the rules-which I was determined to do. For a year, despite all my running around and begging, I made little headway."

In most countries, there is big corruption at the highest levels, and then there is the often more destabilizing petty corruption that becomes so common that people experience it simply as the way things work. Petty corruption-paying someone to get your child into school or to avoid a speeding ticket-is ultimately deeply corrosive.

"I've learned that a lost year or two is sometimes inevitable with new initiatives, especially," I assured Jawad. "Sometimes the lost year is due to unanticipated bureaucracy and corruption; at other times, it comes from the need to convince people to try something new or from delays in getting materials or finding the right staff."

Jawad nodded gracefully, knowing that it is only when some people refuse to play that the game has any chance of changing.

Finally we arrived near the land for the new development. We parked the car, walked under an archway, climbed across railroad tracks, and found ourselves moving through the dusty, narrow alleyways of an enchanting village. Children carried soaps and other sundries on their heads. Women sat in doorways peering from beneath brightly colored shawls. Little girls held hands and swung their pleated skirts as they skipped along the brick road. As we neared the edge of the village, we could see emerald green fields of rice against a perfectly blue sky. Everything felt beautiful.

The taste in the air was fresh and healthy, something missing from Karachi. For as far as I could see were fields of rice, young boys driving donkey-drawn carts filled with grass to sell at the market, and, mostly, empty space. This was country living-and only a 40-minute drive from the slum. I imagined it would feel like heaven to move here from a lowincome urban neighborhood.

About a quarter mile or so across the field stood another small village, though it wasn't clear how much interaction occurred between the two. Jawad pointed to a newly dug fishpond and to rice fields that would flourish in the wet season. Aun and I nearly danced around, just standing on the place where we could dream together of a community for low-income people.

"It won't be long now!" I said gleefully.

"Not now that there is a fishpond!" Aun added.

Jawad teased us for our optimism, but we wouldn't stop dreaming.

Another 6 or 7 months passed before Jawad's efforts were finally rewarded and the land was officially registered. His next challenges loomed larger: finding the right people and materials to construct houses and battling the monsoons. When I visited Lahore again, Jawad invited us to go out and see the development. This time Aun and I were accompanied by our colleague Misbah, who left a 10-year career at Citigroup Pakistan to work with Acumen Fund.

After meeting for a quick coffee in a hotel in downtown Lahore, the four of us piled into a hired car and headed outside the city. As I stared out the window, I was mesmerized by the soft hue the afternoon light was casting across the world, kissing the romantic silhouettes of minarets and the swollen rooftops of mosques. Before reaching the crowded part of the city, I soaked in the more pastoral parts of Lahore, the treelined roads along the wide river bend, the enchanting gardens outside private schools for boys complete with enormous green fields for cricket matches and polo games. Women walked hand in hand alongside the road, some in modern Pakistani dress, some completely covered in the traditional black hijab. Like Karachi, Lahore is a city of contrasts.

Our car moved to the city center and then slowed to a crawl through the crowded streets, accompanied by horse-drawn carts and donkeys, three-wheelers, vans and trucks, men carrying baskets on their backs and pedaling bicycles with huge boxes attached to the seats. Families atop the funny-looking humps of decorated camels trotted alongside our car. Big painted trucks, true artisanship in action, roared past, all overflowing with waving boys. Bearded men walked slowly in their white kurtas and businessmen rode in the backseats of shiny Mercedes- Benzes. Mangy dogs-part of the scenery in every developing countryrambled along the roads while random shopkeepers put out their wares.