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In Pakistan, Fight Terror with Outsourcing

President Barack Obama's Dec. 3 jobs summit was a good idea to brainstorm ways to create employment, amid unprecedented levels of U.S. unemployment. The summit drew on the views of economists, executives, and labor unions. This is precisely what is needed in Pakistan. The specific focus of this summit, however, should be ways to create jobs in rural Pakistan, using a portion of the $7.5 billion in aid approved by the U.S. Congress. Putting these funds to work to reduce unemployment in Pakistan will also reduce the lure of militancy.

In my previous column, I recounted the story of 21-year-old Pakistani Ajmal Amir Kasab—an unemployed laborer from the village of Faridkot in southern Punjab and the sole surviving terrorist of the Nov. 26, 2008, Mumbai attacks. I proposed a three-step strategy to prevent militant recruitment among the chronically unemployed, which included interviewing, public communication, and vocational training to create jobs in rural Pakistan. Let's assume the first two steps are successfully taken in one village like Faridkot, confirming the link between unemployment and militant recruitment. The question is then how exactly to proceed with Step Three—job creation.

It would be worthwhile for a local university like Lahore University of Management Sciences or Karachi's Institute of Business Administration to organize a Pakistani jobs summit, drawing on the perspectives of local businessmen, entrepreneurs, academics, NGO workers, villagers, and U.S. aid workers. Participants could generate recommendations focused on how the U.S. aid package (known as the Kerry-Lugar Act for its two sponsors, Senators John Kerry and Richard Lugar) can fulfill its stated goal—"to benefit the people of Pakistan, including projects that promote economic freedom" and "sustainable economic growth … in rural areas."

Vocational Microfinance

The first job-creation strategy that the summit should evaluate is vocational options in villages. Government initiatives such as the Punjab Vocational Training Council and the Technical Education & Vocational Training Authority, and NGOs like the Hamdard Foundation and SOS Children's Village, already offer vocational training in Pakistan. But such programs are often focused on women and children, and are usually conducted in towns and cities. Summit participants must establish whether they can tailor such programs specifically for chronically unemployed men like Kasab and indigent villages like Faridkot.

The logical question to then consider is whether there will be jobs available for these newly trained men. If not, perhaps a U.S.-funded program in vocational microfinance would be a viable alternative. Last March, for instance, KASHF Microfinance Bank launched a pilot program in vocational training for potential female clients. Participants in my proposed jobs summit would need to evaluate whether the combination of a vocational skill and microfinance loan can motivate the chronically unemployed man in his village to start a business and so generate a steady stream of income.

Perhaps the best way forward is to consider how vocational microfinance might work on a small-scale basis. Journalists have described Faridkot, a village of 10,000 people, as dirt-poor, with semiliterate and low-paid manual workers who till the surrounding fields. What type of U.S.-funded, vocational microfinance program could realistically be offered to young men in this particular village? Could their new businesses necessarily give these men long-term "economic freedom"?

Rural Outsourcing

The summit should also consider the potential for rural outsourcing as a job creation strategy—perhaps a more lucrative alternative to vocational microfinance that can contribute to sustainable economic growth. Across the border from Pakistan in India, for instance, rural outsourcing has worked to create permanent jobs in some impoverished villages.

RuralShores, a BPO (business process outsourcing) company founded by several Indian entrepreneurs, is the quintessential example of this strategy of bringing the jobs to the people rather than bringing the people to the jobs. According to its Web site, RuralShores seeks to "assimilate rural India into the knowledge economy by introducing rural youth to BPO opportunities and providing employment to them in their own villages." Its vision is "social and economic inclusion of rural India in the nation's growth through creation of employment and entrepreneurial opportunities." Villagers have been trained to do everything from processing of utility bills to financial bookkeeping, using workstations created by RuralShores.

Participants in the jobs summit should consider if this type of approach is feasible in Pakistan, where economic growth has not always trickled down to rural areas. It is obvious how the villager might benefit from this approach but the question is, can local businessmen benefit from rural outsourcing? Summit participants need to determine how there could be local synergy between the urban businessman and the rural worker for a win-win situation that could be facilitated by U.S. economic aid.

U.S. Aid as Seed Funding

Let's say the summit establishes that a particular businessman needs a specific service and that outsourcing it to a village is cost-effective. U.S. aid can go toward teaching this service to villagers within the framework of a local microfinance bank, school, or a newly created center in the RuralShores mold. An equally important step would be to identify local entrepreneurs who would be willing to replicate the business model of RuralShores in the Pakistani context, with the help of U.S. economic aid as seed funding. These U.S.-funded, local entrepreneurs could then act as the catalyst for rural outsourcing, connecting the businessman with the villager.

In theory, rural outsourcing sounds like a viable option. But, of course, in practice, there is potential for problems. How do we ensure such a program is carried out with minimal waste, corruption, and even violence? In impoverished villages like Faridkot where militant recruitment clearly occurs, how would such efforts be received by locals? Is it conceivable to create workstations in a village with limited connectivity, electricity, etc.? Are there any entrepreneurs who would want to take the lead on this, using U.S. aid?

It is so easy to be discouraged by such complications, especially given how controversial U.S. aid is in Pakistan. But one should not forget that there are individuals who already do effective work to help those with little or no opportunity in Pakistan. Clearly, independent of local government, there is potential to use U.S. economic aid to help rural Pakistan and so prevent militant recruitment.

A jobs summit specifically targeting rural employment could yield significant results. It could help us determine the best way to approach rural outsourcing and so bridge the gap between at least one village and a major city, between one semiliterate, poor laborer and the educated, rich businessman. This could be yet another significant way to apply the Kerry-Lugar aid package and reduce militant recruitment among the chronically unemployed in Pakistan, one village at a time.

Dr Maha Hosain Aziz is a professor of politics in the MA Program at New York University, a senior analyst at geopolitical consultancy Wikistrat and a research associate at the University of London (SOAS)

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