Aga Khan University adds $1 billion per year to Pakistani economy

24 January 2018 Authored by Consultancy.asia

The Aga Khan University contributes $1 billion worth of activity to the Pakistani economy in a typical year, according to an analysis from consulting firm Centennial Group. Yet, the public benefits to the nation are said to surpass the economic ones alone.

Founded in Karachi in 1983 by Prince Shah Karim Al Hussaini (Aga Khan IV), the Aga Khan University (AKU) is the country’s leading medical school and independent research centre, with additional campuses in Kenya, Tanzania, Uganda, Afghanistan and the UK.

In a first study of its kind, the US-based consulting firm Centennial Group, which focuses on emerging economies and counts numerous former IMF and World Bank leaders among its senior directorate, set out to determine AKU’s impact on the socioeconomic fabric of Pakistan. The study found that the university generates an estimated $1 billion (Rs 103 billion) worth of indirect and direct economic activity in Pakistan annually, as well as supporting nearly 42,000 local jobs.Getting to Rs 103 BillionThe study arrived at its final evaluation through a breakdown of three specific areas of AKU activity; Alumni, Operations, and Hospital Care. In relation to alumni, the university can claim 11,000 graduates with an estimated 60% continuing to reside in the nation. The alumni also earn higher incomes due to the vocational skills they gained while students of AKU, in turn generating auxiliary employment through their entrepreneurial endeavours. The total estimate given for the category was $84 million per annum and the support of 5,260 jobs.

As for operations, AKU has 10,700 employees, and, in addition to its direct payroll ($139 million), spends approximately $72 million on services and supplies from local companies. Together, this creates a trickle-down effect in the economy with an estimated total of $294 million in spending underpinned by the 36,609 citizens in direct and indirect employment as a result of AKU’s operational activities.

Lastly, the medical care which AKU provides through its network of 251 outreach centres – treating 1.3 million patients per year – creates lifetime income gains for the country at an estimated worth of $632 million through the greater workforce participation and productivity of recuperated inpatients. In addition, the study points to the multiplier effect, whereby every rupee of gross value added generates over seven in total economic value.Making Health Care AffordableThe authors of the report, however, are at pains to highlight the less quantifiable aspects of AKU’s contribution to the nation, specifically with regard to the social benefits accrued from a number of specific factors. Among these are its efforts to provide affordable health care to the community, with nearly half a million low-income earners (one tenth of whom earn less than $2 per day) receiving reduced-cost treatments in the year of the study – up from 76,000 supported patients just the four years prior. This amounts to nearly $14.5 million worth of financial support.

Adding to the public dividends from its medical practice and research investments, are the untold benefits for society stemming from the university’s commitment to female empowerment together with a meritocratic ethos. The figures given: 60% of its students receive assistance in the form of  grants, waived fees or interest-free loans, with, on average, 73% of total tuition costs covered, while; two thirds of  its graduates, one half of the senior faculty, and 40% of the university’s employees are women.

AKU’s president, Firoz Razul, quotes the report’s authors in stating that the institute is a “nationwide role model for high quality tertiary education and medical care” as well as “a national innovator and powerhouse for quality.” He adds; “AKU has sought to be an innovator and exemplar throughout its existence. But we do not forge ahead because we wish to stand alone. Rather, we do so in order to encourage others to join us in raising standards, generating knowledge, contributing to the economy and creating opportunities for all Pakistanis.” 

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