Funds diverted: USAID backs off from earlier commitment to provide IBA with $5 million

Pioneer entrepreneurial institution suffers monetary setback.

KARACHI: The Centre for Entrepreneurial Development being established at the Institute of Business Administration (IBA) has suffered a major setback, as the United States Agency for International Development (USAID) backed off from its earlier commitment to provide IBA with $5 million, The Express Tribune learned on Friday.

After contributing $250,000 to the proposed centre, USAID diverted the rest of the pledged amount to its flood relief operations, leaving IBA in the lurch, according to Dr Ishrat Husain, Dean and Director of IBA.

Husain said JE Austin Associates, an international consulting company, was commissioned to carry out a comprehensive survey to determine the need for the proposed centre.

“With the feedback from the private sector, the government and the academia, a business plan was prepared, which was reviewed by an independent expert and finally approved by IBA’s Board of Governors,” he said.

When contacted, a USAID official confirmed that funds had been diverted from other projects to flood relief activities.

According to the business plan, IBA sought the help of a donor for the construction of the centre on its main campus at the University of Karachi. Husain said the construction phase, which cost Rs250 million, would be over by the end of the first quarter of 2012.

He said IBA collaborated with the Babson College, Massachusetts, United States, for the curriculum development of its bachelor’s programme in entrepreneurship. Three permanent faculty members of IBA have recently taken courses at Babson College, while another two will leave for the United States this year as part of the ongoing collaboration between the two business schools.

“IBA is already a part of the Global Entrepreneurship Programme and follows the best teaching practices,” Husain said. The Centre for Entrepreneurial Development is the first initiative of its kind in Pakistan. According to the programme outline, a number of courses on entrepreneurship that will be taught at the centre have never been a part of curricula at Pakistan’s business schools.

Along with the Centre for Entrepreneurial Development, IBA also plans to set up a Centre for Access to Finance, which will focus on transforming business ideas of IBA students into “bankable business plans,” Husain said.

“So far, business students in Pakistan have been obsessed with nine-to-five jobs that multinational companies offer,” he said. He added that now it was time to encourage venture capitalists to come forward and help start-ups.

Husain said it was important for business students to have academic training to identify new business opportunities because established enterprises often failed to pay due attention to changing market situations.

“Capitalism is creative destruction. New opportunities must be ceased. But multinational companies are too bureaucratic and inflexible to cease new opportunities,” Husain said.

“IBA faculty members, along with students, have recently done case studies on Barbeque Tonight, National Foods and Student Biryani,” he said, adding that IBA graduates have consistently set up successful businesses over the years.

Published in The Express Tribune, December 19^th, 2011.