Five questions with Commerce professor Dr. Nauman Farooqi
2010-08-16 16:05:59

Farooqi is a Commerce professor in the Ron Joyce Centre for Business Studies. His areas of research include Informal Value Transfer Systems and experiential learning.

1- You are originally from Pakistan and established a successful career there. Why did you come to Sackville and Mount Allison?

I had always lived in the same place for school and university and work. I only went to the U.S to do my PhD, and then I went back to Pakistan. I got married and after two years of marriage my wife wanted to know where we were moving. My father-in- law used to work for the airlines, so every three years they used to move to a different country. That got me thinking that maybe it would be fun to explore the world. Once she planted the seed in my head, an opportunity came up in Dubai for a year. Then a friend of mine moved to Canada and suggested we come. I went to Toronto and thought it was great. Summer was coming and we thought we would spend our vacation in Canada touring around and looking for jobs. As soon as I got to the apartment in Toronto that we had rented for the summer and opened up my laptop to check my e-mail, there was a job offer from Mount Allison. It was a one-year contract replacing a sabbatical. Most of my friends and relatives were in Toronto and they couldn’t believe I was coming to New Brunswick. The more they said don’t go, the more curious I became. I took the plunge and it has been 10 years now.

2- You have served in both the corporate world and the academic world. Which is more rewarding for you?

I am an accidental academic. I had never considered academia as a career; it was just sheer fate. I did my MBA in Pakistan, had a job offer from Citibank, and was set to enter the banking industry. I also worked as an Economic Advisor for the American Embassy in Pakistan. Then I found out I had received an all-expenses-paid scholarship to attend a PhD program at any university in the world for having the highest marks in social sciences at Quaid-i-Azam University. I couldn’t pass that up. I finished my PhD at St. Louis University and went back to Pakistan. I started teaching at my old school before taking on a position as Chief Executive Officer at a broad-based investment advisory and money management firm. I went in and out of the corporate world and back into teaching every couple of years until I came to Mount Allison in 2000. I found myself always returning to academia because I really enjoyed teaching and interacting with the students. I have found the corporate experience, however, has allowed me to translate what is in the books to the real world. My students have found it interesting and enriching that I can take the theory and explain how it actually happens. I enjoy doing a mixture of both corporate and academic because, at least in my opinion, it has left me with an understanding of how business is done, so I can give my students that value-added component. Even though I am an accidental academic, I couldn’t have chosen a better profession for myself.

3- You are an expert on Informal Value Transfer Systems (IVTS)? Can you explain this?

Basically it is when you move money from one place to another, typically from one country to another, without using the formal banking system. The IVTS, which is called Hawala, is done through informal channels. It is typically linked to the ethnic communities and is through word of mouth. It is based on trust. Hawala transactions run between $5-6 billion/ year and are undocumented, so the government cannot account for the expansion or contraction. In India and Pakistan almost 50 per cent of the economy is based on Hawala.

I remember being with a friend in Dubai who was setting up a business and was getting a transfer of $100,000 from Pakistan. We walked into a Hawala operator’s living room, we sat down, and he offered us a cup of tea. My friend asks if he has money for him and the operator asks him for the six-digit code. The operator looks up the code in a battered diary, he walks over to the safe and hands him $100,000 in cash. He told him to count the money and that’s it. When we were leaving I asked ‘how do you know the money belongs to him?’ He said well this is his name and he is getting the money from his friend in Pakistan whose name is this, so what is the problem?

There are two consequences to trying to have regulations or strangle this system: (1) Hawala operators will go further underground and we will have no idea who they are or what they are doing, which is dangerous and lends itself to the wrong kinds of business; (2) The banks try to compete on a cost basis by reducing their costs, and that hasn’t worked well. My research has looked at different avenues of IVTS. I recently put out a proposal to look at the network itself (how does it work? who is a part of it? how do you become an operator?).

4- You are a coordinator for exchanges to Norway and The Hague. What changes do you see in students that have gone on exchange?

I think it takes a special kind of person to go on an exchange. I wish that we made it a requirement, there are a couple of universities that do that, and I think we should back it up with money for scholarships and stipends. That would be wonderful. After students return from an exchange their mind is really opened up to a different way of thinking and they have a better understanding of different points of view and perspectives. It broadens their horizons because when they are looking at future opportunities and they are not necessarily looking at Canada or North America — they are looking globally. They think more like a global citizen. It also gives them a lot of confidence because they learn to live in a foreign country on their own.

5- What do you credit as one of your greatest professional accomplishments?

I am still in the stage of learning. The more I explore, the more I find out how little I know. It is an exciting and challenging journey and I am still enjoying discovering things. Being in the world of academia allows me the flexibility to pursue my passion and ideas and I haven’t reached my destination yet.