The Key Man: How the Global Elite Was Duped by a Capitalist Fairy Tale 
by Simon Clark and Will Louch.
Penguin, 342 pp., £10.99, February, 978 0 241 98894 7
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Icarus: The Life and Death of the Abraaj Group 
by Brian Brivati.
Biteback, 349 pp., £9.99, January 2022, 978 1 78590 733 3
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Our Lives in Their Portfolios: Why Asset Managers Own the World 
by Brett Christophers.
Verso, 310 pp., £20, April, 978 1 83976 898 9
Show More
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When​ the conspiracy theorists, diehard Trumpers and (white) natalists gathered in London in May for the UK National Conservatism Conference, one fascinating sideshow was the brawl over the carcass of Margaret Thatcher. A few weeks before the event, Ryan Bourne, an economist at the libertarian Cato Institute, had warned those attending the conference against ‘importing the worst American narratives into British politics’ and in the process abandoning Thatcher’s free market legacies. On the opening day, the conference director, Christopher DeMuth, responded that he had ‘communed’ with the ghost of the Iron Lady, who had let him know that she was ‘on board’ with the circus of flag, family and nation. When the proceedings began, the agenda was dominated by wokeness. Woke schools and woke universities, of course, but also the new nemesis: ‘woke capital’.

Woke capital includes all manner of sinners: globalist financiers, gay-friendly lifestyle and entertainment businesses, and ESG (environmental, social and governance) investors, the bugbears of manly megatruck-driving American men. Woke capitalists’ internationalism is suspicious and effete, their cosmopolitanism is a danger to Christian nationalism, and their efforts to wean the world from fossil fuels so that they can make more money from renewables only delay the end times.

The epitome of woke capital is Arif Naqvi, a private equity multimillionaire and ardent global free-marketeer who used to hang out with Bill Clinton and once sat on the stage at Davos with Bill Gates and the head of the World Health Organisation. He was on the board of the Business and Sustainable Development Commission and the United Nations Global Compact, whose motto is ‘business as a force for good’. He is a Pakistani Muslim who can recite long passages of Shakespeare from memory and has been fêted at New York galas.

The son of a minor industrialist in Karachi, Naqvi went to a British-style grammar school and graduated from the London School of Economics. He made his way to Dubai via jobs at the now defunct Arthur Andersen and the giant Saudi investment enterprise Olayan. In Dubai, he wheeled and dealed his way into the takeover of a former imperial trading company called Inchcape, which by the 1990s was involved in shipping, logistics, the automotive trade and other services. A few years later, Naqvi split up the Inchcape subsidiaries he had bought and sold them for a profit of $70 million. He used the cash to launch Abraaj, a private equity firm, in 2002. Private equity is an area of asset management which often targets companies that are in trouble, takes them private and either turns them around or sells them for parts. Private equity firms use the companies they own as collateral for loans, which they pay back with the profit from selling off the companies – a strategy perfected in the 1980s by such outfits as KKR (Kohlberg Kravis Roberts), Carlyle and Blackstone.

Abraaj was soon a major player in parts of the world that are problematically described as ‘emerging’ or ‘frontier’ markets. It bought out Aramex (a Jordanian courier firm), Karachi Electric (a utility company) and Spinneys, which operates supermarkets across the Arab world. Abraaj was unscathed by the global economic crisis of 2008 because, as the magazine Institutional Investor declared, the Middle East was awash in ‘cheap credit for leveraged buyouts’. Naqvi, the ‘Gulf’s Buyout King’, hobnobbed with presidents, prime ministers and business celebrities, and spoke at investment conferences held by the UN, the World Bank and the World Economic Forum. His firm raised billions from investors, including development finance agencies like the United States’s OPIC and Britain’s CDC Group. These public funds allowed Naqvi to shift gear, becoming an ‘impact investor’ – a self-appointed capitalist saviour of the wretched of the earth – and being invited to sit on the boards of various councils and commissions for CEOs interested in sustainable development.

In 2012, Naqvi paid half a million dollars in sponsorship to a Clinton Global Initiative event in New York and appeared on a panel moderated by the managing editor of Time magazine. He argued, according to Time’s account, that in an ‘increasingly interconnected world, one in which thriving communities become thriving markets’, sustainable development could be highly profitable. Time’s piece about the event appeared under the headline ‘Can Companies Be Good and Do Well?’ A few days later, Bill Clinton acknowledged Naqvi’s largesse by speaking to Abraaj investors behind closed doors. At its peak, Abraaj controlled $14 billion in assets and had plans to build or buy private hospitals and medical care facilities across Africa and Asia: the healthcare sector is a goldmine for investors. Naqvi owned homes in Pakistan, Oxfordshire, London, the Côte d’Azur and Dubai. He travelled in private jets and holidayed on his teak-panelled superyacht. He bought a villa in St Kitts and Nevis and a golden passport to go with it.

But then came the downfall. In late 2017, a fund manager at the Bill and Melinda Gates Foundation started asking questions about where the foundation’s $100 million investment in Abraaj’s health fund had gone: the promised projects had failed to materialise. Insiders leaked emails and financial documents to Simon Clark and Will Louch at the Wall Street Journal, who started to publish evidence of malfeasance. US federal prosecutors brought fraud charges against Naqvi, and in April 2019 he was arrested on disembarking from a plane in London. He paid £15 million in bail and was electronically tagged and placed under house arrest in his flat in a mansion block in South Kensington, where he began fighting extradition to the US. He was forced to sell his estate in Oxfordshire, where between 2010 and 2012 he held cricket tournaments to raise campaign funds for Imran Khan. He was tried in absentia in the UAE and sentenced to three years’ imprisonment for his role in the collapse of Abraaj, and for writing cheques he couldn’t cover. In March this year, the high court ruled that he could be extradited to the US to stand trial for fraud and money laundering.

Clark and Louch’s book is presented as the tale of a rags-to-riches confidence trickster. Their Naqvi is an Orientalist caricature: wily, corrupt and mercurial, given to emotional outbursts, but charming and clever. They find much to admire about him: in particular, his acumen in picking the right time to buy companies, and his ability to cut costs to the bone. For them, Abraaj’s buyout of Karachi Electric and his axing of hundreds of its employees is evidence of efficient management, rather than of a dismantling of the social contract that binds a public utility company to its workers and consumers. Naqvi’s only real crime, as Clark and Louch see it, is that he hoodwinked honest investors – most of them from the US or Europe, places where of course corruption doesn’t exist. They praise Naqvi’s investment in health infrastructure in Africa – they treat healthcare not as a basic right but as a profit-making commodity – but criticise him for inflating the value of Abraaj’s assets and spending the funds on a lavish lifestyle and ego-driven projects.

Others have been more sympathetic to Naqvi, including Brian Brivati, who sees him as a virtuous man brought down by hubris and the machinations of his enemies. Brivati’s previous books include The End of Decline: Blair and Brown in Power, as well as biographies of the Labour Party eminences Lord Goodman and Hugh Gaitskell. He met Naqvi’s family just after his arrest in London. The pivot of the book is Abraaj’s planned sale of Karachi Electric to a Chinese company, which Brivati contends made Naqvi a danger to US national security interests. Brivati thinks that the hard-right media outlets that portrayed Naqvi as an example of the duplicity of ‘woke capital’ are part of a conspiracy against a Pakistani man made good. He suggests that the US legal authorities were doing the bidding of private equity firms that wanted to pick up the remnants of Abraaj’s funds. Brivati, who in a book on Afghanistan fervently endorsed Blair’s liberal military interventionism, defends Naqvi’s so-called impact investments and his version of liberal interventionism: growth-led economic development. Icarus is dedicated to ‘the thousands around the world who did not benefit from impact investment because Abraaj was taken down’.

The concept​ of economic development as a planned activity is a little more than a hundred years old. In 1920, Sun Yat-Sen published a treatise on The International Development of China. He offered a plan for ‘the vast resources of China to be developed internationally under a socialistic scheme, for the good of the world in general and the Chinese people in particular’. He called for foreign investment in ports, roads, canals, railways, telecommunications infrastructure, steel and cement works, and agricultural and mineral resources. The profits would repay capital investments, increase wages, improve production technology, and reduce the cost of commodities and public services for Chinese consumers. This regulated marriage between local socialism and global capitalism ‘would create an unlimited market for the whole world’.

In 1922, three years after completing his term as the colonial governor of Nigeria, Lord Frederick Lugard published his manual of indirect colonial rule, The Dual Mandate in British Tropical Africa. Lugard included chapters on economic development, approvingly quoting a former secretary of state for the colonies:

In a circular dispatch to colonial governors, Lord Milner observed that ‘it is more than ever necessary that the economic resources of the Empire should be developed to the utmost,’ in view of the depletion of raw materials, and the financial burdens left by the war. Much of the existing deficiency, he adds, could be produced by the tropical colonies if their great potential resources were adequately developed.

For Lugard and other colonial administrators, ‘development’ meant extracting the colonies’ agricultural and mineral resources. British policy prioritised the building of infrastructure – including railways as far afield as Uganda and Palestine – to carry these materials to the metropole in order to supply British industry. Milner’s successor, Winston Churchill, wrote in 1921 that it was a precondition of development aid ‘that any plant or materials required should be ordered’ from Britain itself. The increased demand for British products would ‘develop the markets’ and increase the purchasing power of the colonies, which would buy still more goods from Britain. In other words, the colonies were not only producers of raw materials but markets for British goods and guarantors of jobs in the metropole, at a time when the Russian Revolution was seducing workers in Western Europe.

British businesses saw expanding markets in the colonies as a great source of profit. Among the private interests lobbying the government for better terms of trade with the colonies – i.e. buying cheap and selling dear – were steelworks, engineering firms and producers of consumer goods. In the 1930s, the managing director of Unilever – which had acquired several major British trading companies in West Africa – wrote to the Colonial Office complaining that his firm wasn’t being given preferential access to colonial markets. The government obliged: in 1934 an interdepartmental committee in Westminster decided that, in order to prevent them competing with industry at home, ‘colonial industries should not be “artificially” encouraged.’

The executive committees of the bourgeoisie who created the post-Second World War economic order c0nnected anticolonial struggles for economic sovereignty to the communist threat. In Europe, the declining empires looked to bind their colonies more closely to the metropole by lending them francs and sterling. In 1946, France established the Fonds d’investissement pour le développement économique et social des territoires d’outremer (FIDES), and two years later Britain founded its equivalent, the Colonial Development Corporation (after a series of name changes and mergers, the CDC became British International Investment in 2022). In the US, President Truman’s Point Four Programme of 1949 was designed to challenge the ‘false doctrines’ of communism in the Third World. John F. Kennedy set up the US Agency for International Aid in 1961 and in 1971 USAID was joined by the Overseas Private Investment Corporation (which was absorbed into the Development Finance Corporation in 2019). In the eye of this hurricane of acronyms, two certitudes held fast: economic growth was the holy grail, and foreign investment and international lending were the path to growth.

They tried valiantly, but radical political figures in the newly decolonised states found it difficult to challenge the hegemony of these global institutions and their mantra of growth-as-development. In Worldmaking after Empire (2019), Adom Getachew describes the anticolonial political and economic experiments suggested by eminent thinkers of Africa and the Caribbean, from C.L.R. James, George Padmore and Eric Williams of Trinidad, to Ghana’s Kwame Nkrumah, Julius Nyerere of Tanzania and Michael Manley of Jamaica. The New International Economic Order (NIEO) called for and the 1974 charter of economic rights put forward by the UN General Assembly enshrined economic and political self-reliance, ‘permanent sovereignty of every state over its natural resources’, global redistribution of wealth and the alleviation of domestic inequality.

The development industry quickly armoured itself against NIEO and the threat of nationalisation. Arbitration tribunals and the World Bank’s Convention on the Settlement of Investment Disputes guaranteed the primacy of foreign investors over the newly independent states. International law overrode local legislation. The conditions of IMF and World Bank loans and rating agencies’ country credit ratings disciplined states that didn’t obey austerity measures. Intellectual property regimes extracted and patented local knowledge and products from the Global South, impeding the reciprocal transfer of scientific and technological knowledge. Public-Private Partnerships used state and multilateral subsidies to enrich private firms. While technocrats and economists fought over the details of development plans, security and intelligence agencies sanctioned, deposed or assassinated politicians who stood in the way of capital, and co-opted, rewarded and protected more malleable figures who in turn protected European and US interests. But for every Persian Gulf potentate or Monroe Doctrine satrap on whom the US lavished arms and accolades, there was a Mohammad Mosaddegh or Jacobo Árbenz or Salvador Allende who dared to threaten Euro-American corporations’ god-given right to these countries’ resources.

From the start, the development finance industry resembled the US military: overlapping national, regional and international organisations overseen by fractious bureaucrats, a sprawling domain of operations, ever more elaborate geopolitical and geoeconomic justifications for intervention, and an enthusiasm for impenetrable acronyms. Liberal counterinsurgency doctrine incorporated developmental policies in France’s war in Algeria, Britain’s in Malaya and the US’s in Vietnam. The mantra of every general engaged in guerrilla warfare in Asia and Africa and Latin America became ‘build roads, schools and markets’, not just to civilise and integrate, but to be used for military and intelligence purposes. The term ‘counterinsurgency’ was coined by Kennedy’s national security adviser, Walt Rostow, whose paean to economic development, The Stages of Economic Growth, was subtitled ‘A Non-Communist Manifesto’. Rostow was also instrumental in the creation of USAID. Like the military, the development industry has been irresistibly drawn to private firms that boast efficient solutions which skirt public scrutiny and the plodding work of securing popular consent.

These days, the debate about the balance of private and public investment in the Global South has been settled in favour of private capital. Privately owned mobile and internet networks, potable water and sewerage, utilities companies, mobile payment systems, financial infrastructure, hospitals and clinics all operate alongside, and increasingly replace, decaying public services. Many of these businesses secure state and international subsidies through development finance agencies, and in the rare cases where their profits are not expatriated, they enrich local businessmen with connections to international networks. Many of these businessmen have MBAs from European or North American business schools, and have done stints at management consulting firms or investment banks in the world’s financial and corporate capitals. Where the need is greatest, private capital is invariably most evident: 73 per cent of infrastructure projects in Africa are sponsored by foreign investors. Public-private partnerships have become the magic formula touted by the World Bank, IMF and development finance agencies, even though they involve risk being passed to the public while profits are privatised. Brett Christophers’s Our Lives in Their Portfolios analyses the mechanisms through which private equity firms and asset managers have devoured the public infrastructure on which our lives depend, in service of private profit.

In June​ 2009, President Obama gave a speech at Cairo University supposedly intended ‘to seek a new beginning between the United States and Muslims … one based on mutual interest and mutual respect, and one based upon the truth that America and Islam are not exclusive and need not be in competition’. Obama praised the US’s work to eradicate polio alongside the Organisation of the Islamic Conference (while Obama was speaking, a CIA spy disguised as a vaccinator was tracking Osama bin Laden in Abbottabad. After the news came out, dozens of vaccination workers were killed around the world, and in Pakistan polio vaccination rates plummeted). Obama touted the new US policies in the Muslim world: online learning to connect students with education abroad; a Summit on Entrepreneurship; centres of scientific excellence in Africa, the Middle East and South-East Asia tied to US universities; and ‘a new fund to support technological development in Muslim-majority countries, and to help transfer ideas to the marketplace so they can create more jobs’. Finance and capital would address global inequality, rectify years of US violence, provide a rosier future for Muslim youth and bring peace to the Middle East.

Arif Naqvi was one of the people who saw all this as an opportunity. With help from the World Bank and the development banks of the US and Europe, he set up a $500 million fund, a branch of which, Palestine Growth Capital, operated – with Israeli approval – out of Ramallah. I have only found one SME (yet another development acronym denoting small and medium-sized enterprises) that benefited from Abraaj funds: a farm in Jericho, operated by the well-known and affluent Nusseibeh family, which exported herbs grown by Palestinian women. The Palestine growth fund was the kind of thing development wonks love: an innocuous agricultural programme that was hailed as a ‘bridge-building exercise’ by Israel, and supposedly empowered women.

Naqvi was widely praised for this, even though by 2012 Abraaj had wound down its involvement in the fund. The next year, he was awarded an Oslo Business for Peace prize (Norway takes great pride in its sponsorship of the ‘peace’ accords of 1993-95 between Israel and the PLO). The committee of Nobel laureates who selected Naqvi included Muhammad Yunus, whose much hyped microcredit scheme had mired poor South Asian farmers and especially women in debt. At a 2014 gala dinner in New York, Edgar Bronfman, the heir to the Seagram fortune, introduced Naqvi by saying, ‘Arif is a man who has done very well, but knows that doing well means doing good,’ and compared him to a previous generation’s ‘great philanthropists’.

When Abraaj pulled out of the Palestine fund, the Quartet on the Middle East took over its operation. The Quartet, set up during the Second Intifada in 2002, is composed of representatives from the UN, US, EU and Russia. Its mandate is ‘to increase Palestinian economic and institutional development and empowerment, as a support towards achieving a two-state solution’ and its first envoy was a former head of the World Bank, James Wolfensohn, who stepped down in 2006, after less than a year, frustrated by the Bush administration’s intrigues against him. In 2007 he was succeeded by Blair, who during his time as prime minister had financed more public-private partnerships, at home and abroad, than any other OECD country.

Blair’s tenure as Middle East envoy was memorable for being entirely ineffectual, for his closeness to and passionate defence of successive Israeli governments, and for his varied and extensive Middle East business connections. When he stepped down in 2015, he was replaced by Kito de Boer, a former managing director of McKinsey in the Middle East. De Boer had befriended and mentored Naqvi during his early years in Dubai and in 2002 had encouraged him to start Abraaj with his profits from the sale of Inchcape. De Boer lasted as envoy for two years before becoming a managing partner at Abraaj, just before the firm went up in flames.

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Vol. 45 No. 18 · 21 September 2023

Laleh Khalili gives a misleading characterisation of our book The Key Man (LRB, 7 September). We have no issue with Arif Naqvi’s stated ambition to help end poverty. The problem, which we set out in painstaking detail, is that what Naqvi actually did was very different from what he said he was doing. We do not believe, as Khalili says we do, that Abraaj’s takeover of Karachi Electric is ‘evidence of efficient management’. We reveal that Abraaj’s planned sale of Karachi Electric involved attempted bribery. We report the lengths to which Irfan Ali, a determined Pakistani civil servant, went to ensure that the terms of the proposed sale of the company were properly disclosed to the government, to protect the public interest. We strongly disagree with Khalili’s assertion that ‘Naqvi’s only real crime, as Clark and Louch see it, is that he hoodwinked honest investors.’ We report the criminal charges made against Naqvi.

We do not ‘praise Naqvi’s investment in health infrastructure in Africa’. On the contrary, one of the main themes of The Key Man is the way this investment went so badly wrong for patients in Africa and Asia, and for investors in the fund. One of us submitted a paper about Abraaj to a parliamentary inquiry into the effectiveness of UK aid in combating extreme poverty and recently spoke on an Oxfam podcast about the ways in which private healthcare investments in Africa and Asia hurt the poor. We wrote in The Key Man that it would have been better if Naqvi had ‘never mentioned the plight of the poor, because the loss of trust and sense of betrayal he left as his legacy have damaged the cause he championed.’ For the avoidance of doubt, we believe that access to healthcare is a universal human right. We do not, as Khalili asserts, see healthcare as a ‘profit-making commodity’.

A substantial part of Khalili’s article repeats factual information which we worked hard to gather for The Key Man. We are glad that our efforts to provide accurate, well-sourced information about Abraaj have been helpful to readers, including Khalili.

Simon Clark & Will Louch
Lewes, East Sussex & Nayland Suffolk

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