AS the state has excluded millions of Pakistanis from the economic mainstream, a new wave of smart entrepreneurs is sweeping the country.

Charmed by the concept of social enterprise and aware of available opportunities to access funds to start a business, young people like to work for social change with a promise of personal benefits outweighing risks. The limited scope in the job market to absorb dynamic young minds nudge them further towards self-employment.

Social enterprises are organisations or start-ups created to further a social purpose in a financially sustainable way. Their surpluses are principally reinvested for the defined purpose rather than being pocketed by the proprietors as profit.

The concept has gained popularity in the elite development circles. Many leading social enterprises like Nest I/O, Daftarkhawan, PlanX, Acumen, Kashf Foundation, Shell Tameer and Akhuwat have been recognised globally for their efforts.

A recent report on the state of social enterprise in Pakistan prepared by the British Council in collaboration with its partners provides some insight into the size and spread of such enterprises across the country. The report highlights the information gaps which exist because the sector for the most part operates in shadows without clear regulatory oversight.

Some 448,000 social enterprises were found to be active in Pakistan in the fields of skill development, microfinance, health, education, water, agriculture and housing sectors, led mostly by young techies and cutting across class and regional divides.

Some 448,000 social enterprises, led mostly by young techies, are active in Pakistan in various fields

The self-involved government oblivious of the new currents has yet to evolve an informed opinion. The question of monitoring, registering or grading will surface only after social enterprises are defined and provided suitable legal framework. The social enterprise cell in the Planning Commission has yet to become functional.

Sartaj Aziz, an economist and PML-N stalwart who serves as the deputy chairman of the Planning Commission, is positive. “Social enterprises are supplementing government efforts to serve the masses and improve their well-being,” he tells Dawn over the phone. He says the mixed model of social enterprise where surplus is divided between profit and reinvestment for a cause has been the most popular in the country.

He highlighted the value of community involvement to deliver on social goals and mentioned a rural outreach project undertaken by the PML-N government in 1991-92. He said the challenge of direct foreign funding to organisations bypassing the government was addressed through a law passed two years ago that obligated government’s clearance for such inflows.

He promised that the official who heads the Centre for Social Enterprise, whose name he did not remember, would get in touch for more information, but the official did not respond until Friday. Asma Hyder, member social policy at the Planning Commission, was approached but she was too busy to respond.

Some economists are, however, not impressed. They challenge the very idea which they say is being pushed by dominant countries to erode the credibility of developing nations. Suspicious of the glorification of social enterprises, they direct their criticism to the government, which they say is ineffective and keen to absolve itself of its basic responsibility — providing its citizens with basic amenities and services.

Dr Nadeemul Haq, an economist and planning minister in the last PPP government, is critical of both the purpose and functioning of social enterprises. “No, they are not filling in for the government for the provision of amenities. They are selling social causes to amass wealth for themselves and families. There are some exceptions but they are few and far between.”

“When so many social enterprises are working with such huge budgets for so long, why has the change not materialised? It is because either they are not as efficient and effective as they like us to believe or they are a complete farce,” he said.

“The answer to development challenges in Pakistan can only be provided by a stronger, clean, efficient and accountable democratic government. We need public debate on economic strategy options to develop a future plan. The last time one heard of a strategy was 35 years back when Dr Mehbubul Haq was active,” he tells Dawn by phone from Lahore.

He is also suspicious of donor countries and agencies. “It is not always easy for donors to sell their agenda to a government mandated to act as a gatekeeper of national interest. Economically distressed credit seekers are easier to manipulate. Look closer at the working of social enterprises to understand the game,” he says.

An independent watcher in the know of affairs says, “Convinced of the superiority of the private over public sector, models are tested to deliver social services using market tools. It suits the government, which withdraws from its role of service giver using the excuse of limited resources. The global development partners prefer to trust everyone but the government to deliver on their behalf.”

He also criticises the role of media in this regard, saying: “The convergence of interests of donors and social enterprises has created an economic environment which is conducive to the expansion of the sector while staying under the radar.”

Asad Amanullah, a former president of the American Business Council who left his corporate career to follow his heart, mailed the following response to questions raised by Dawn.

“Social enterprises are finding their calling due to inability of the government to provide basic facilities like education, health, clean water, vocational training, etc. I don’t see the government responding to social emergency with urgency due to which we will continue to see proliferation of more social enterprises. The key is to make sure these enterprises have strong governance, otherwise they can become as huge a waste as some government schemes.”

Published in Dawn, The Business and Finance Weekly, February 19th, 2018