Dealing with Pakistan's distorted housing markets - Acumen

Dealing with Pakistan’s distorted housing markets

By Acumen on December 10, 2005

Acumen Fund CEO Jacqueline Novogratz has been visiting earthquake-affected areas of Pakistan, and documenting her travels in a journal. Excerpts of each day’s entry will be posted.

December 6-8 – Islamabad to Karachi

Tent 1.jpgOver my last two days in Pakistan, we meet with many individuals and organizations, including a potential pipeline deal to create a new housing development company for the poor. We speak with other organizations doing relief and reconstruction work, like the large Poverty Alleviation Fund and the umbrella organization for all of the National Rural Support Program groups. In short, we meet a number of potential partners.

On our last day, we reconnect with Tasneem Siddiqui, the entrepreneur behind our low-cost housing investment and overall expert in the field. Like our other partners, Tasneem believes there is potential in an organization that manages supplies and delivers needed design and management assistance for longer-term housing. People will take care of themselves, he cautions, but we need to look at where and how to add value as we start thinking a bit differently about the delivery of critical goods to the poor. This is especially true of housing after disasters and is also especially difficult in such highly distorted situations.

What does Acumen Fund do from here? There is a very high probability that the majority of people affected by the earthquake will not be served and will be in positions where they continue to live in substandard housing as they slowly try to rebuild their lives, Alternatively, there is the possibility they could work with an organization or enterprise that could facilitate the rebuilding process in a way that is efficient, effective and fair. In any case, this world will look very different after the snows come and go, after much of the aid machine disappears and people start making decisions about their futures.

What have we learned on this exploration? First and foremost, we saw the tremendous spirit, capacity and goodwill of the Pakistani people themselves, whether or not they were directly affected by the earthquake. This is a critical moment in the country’s history and a real opportunity for leadership to present a united, powerful vision of what the future could be if people continue to pull together, create greater opportunities for the poor and build a society of wholeness that encompasses the diversity that is Pakistan.

Second, the markets are so highly distorted for permanent housing in the earthquake areas that it is difficult, if not impossible, to know at this time whether there is a role for a more market-driven approach to delivering affordable long-term housing to the poor. At the same time (and at the very least), there is and will increasingly be a critical need to have more accountable systems whereby we can know the cost of materials, delivery and implementation in order to plan and execute better solutions in the future.

Third, the biggest constraint to success is not money but management. Whether people are being given materials free or asked to pay for all or part of the materials and tools needed for housing reconstruction, results will be mixed at best if there are not solid and consistent management systems in place. Management is also an area that requires the most work and most creativity. This is an area where Acumen Fund could add significant value, provided we find the right opportunity.

We have also reaffirmed the potential for private initiative and solutions to public problems through building a global community of investors, investees, advisors, friends. The people with whom we work in Pakistan are committed, focused, creative and generous. We have a powerful opportunity to help facilitate innovative thinking and effect real and far-reaching change on the ground. I am leaving Pakistan feeling that it is a country where we have good friends, a growing community and a clearer vision as to what can be done.

There is much to be done but we have the means to do it.

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