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Dr. Salman Shah |
| Advisor to the Prime Minister Shaukat Aziz on Finance, Economic Affairs, Statistics and Revenues |
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| Q: Do you think that the UK-Pakistani Business Directory will prove to be helpful for the business community? |
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A. This UK Pakistani Business Directory is very informative regarding business in UK. Also the joint ventures with Pakistani entrepreneurs and trade relations will boost between the two countries. This is a welcome measure and I highly appreciate this effort. This directory will be helpful to develop collaboration and good relation between Pakistani and UK business communities. There are huge investment opportunities in Pakistan.
The Pakistanis living in UK are technically, professionally and economically very sound. They must invest in their homeland for the betterment and development of Pakistan. I really appreciate the effort put in by the organizers of this directory. |
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Q: What are the economic policies of Pakistan? |
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A. Our main strategic directions are privatization, liberalization and deregulation of the economy so that we prepare it for global world and Pakistani businessmen can compete globally. We have very huge population base in Pakistan, a hundred and sixty million people. Hundred million are under 25 years which means Pakistan’s domestic markets are going to grow very rapidly. Therefore we need to have very good investment climate in which the private sector can lead the growth engine. In this respect , foreign investment is also most welcome and we have had outstanding contribution from overseas Pakistanis. We have investments from banking sector, real estate, retail, industry and from UK based Pakistanis.
Our economic strategy is to continue this growth between 6 to 8 percent to maintain a very good macro economic environment to create a good investment. |
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Q: Can we say that the graph of Pakistani economy has grown up within last five or six years? |
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A. The Pakistani economy has become more than double. When President Musharraf came over, the GDP was 63 billion dollars. Today it is close to 150 billion dollars.
So the economy has sharply grown with an average rate of 7 % in the last five years and this is the growth which we will maintain in future and I think if we will continue to maintain macro stability, our economy should double within six, seven years. Our reserves are 16 billion dollars. Foreign investment was 8 billion dollars last year. |
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Q: If according to you, the economic growth occurred in past six years, please explain its reasons? |
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A. Well because we were able to privatize our banking system and for the first time in Pakistan the financial sector is driven by the private sector and when the resource allocation of any country becomes that dynamic , the resources are invested in the right places in the economy and you see the results of that. Also we have deregulated the economy. We have industrial deregulation, Agricultural deregulation and we have deregulated the services also. We have reduced the Fiscal deficit. Debt burden has more than halved from 1999 when it was 100 % of GDP, now it is 52% of the GDP. So, the over all macro economic conditions are very good. The global demand is very good, the domestic demand is very good, The investors are investing. This year the foreign investment of Pakistan is over 8 million dollars which was a record for Pakistan. And we think that this will continue in the future. |
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Q: What steps have been taken by the Pakistani Government for the betterment of the Overseas Pakistanis? |
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A. The overseas Pakistanis have their own ministry dedicated to the overseas Pakistanis, where they provide them services and counselor services abroad. When they come over here they have place where they can visit, they have special colonies, housing colonies. They can invest over here. We, very recently had an overseas Pakistani Investment Conference in Pakistan. So there are lots of facilities which are available to the overseas Pakistanis and they have the overseas Pakistanis card which also entitles them to get many other facilities and facilitation in Pakistan |
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Q: How do you meet challenges which are being faced by the Pakistani Govt. in different fields? |
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A. I think the main hallmark of President Musharraf and Shaukat Aziz govt. is “Good Governance” . We have introduced deregulation system to a large extent. Also, in our decision making we are quick, and we don’t complicate things for the businessmen and I think this is great approach so that things are sought in the first instance and they don’t turn it into hurdles. |
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Q: What is the balance of trade in your regime? |
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A. If we look at the past seven years, we have had Current Accounts Surplus for three years; and now for the last three years, we have a Current Accounts Deficit. This is because we are getting a very sharp increase in our growth rate and along with the growth, the import bid is going up. The import bid is related primarily to two major items. One is the oil bid and the other is the import of machinery and raw material for industry. Both of these are very essential for the economy. So, I think the current account deficit is running at 4 .5 percent to 4.8 percent. This is something which is under our kind of regime, we are able to finance it very easily and our balance of Payment Surplus is contributing to the increase in reserves of the country. |
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Q: What steps are being taken by the Pakistani Government to increase trade and exports with the U.K. and other European countries? |
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A. We have got trade relationship with the U.K. and also negotiating with the European Union to increase our access to European market. In this respect, we would like to have a free trade agreement with the European Union and our efforts are towards this area. We are also trying to get better access for our goods and services in U.K. and Europe; and hopefully, we will be successful. |
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Q: Can we say that your Govt. has failed to achieve the trade targets? What is the new strategy? |
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A. I think our exports have more than doubled the last seven years, from around 7 billion dollars to 17 billion dollars in 2006-07. This year the target is about 19.2 billion dollars. You must understand that these are global markets and there are ups and downs in the market, but now I can see that there is a recovery in the exports particularly in the textile sector.
We are putting in a lot of efforts to improve our competitiveness and productivity which will make our exporters competitive in the global market |
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Q: The Pakistani Government is claiming for the reduction of poverty in the country. Is it true? |
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A. When the economy grows very strongly and the GDP has more than doubled, means everybody has affected. From the poorest to the richest, everybody improves and in Pakistan, poverty indicators show that we have brought down the poverty from around 34 % of the poverty line. It is now around 24 %. So there is about 10 % drop in the poverty. But this 25 % is still very high and our objective is to wipe out poverty from Pakistan within our right time set by 2015 under the Millennium Development Goals. We will half the poverty which means taking it down to about 16 %. But if we continue to maintain the high growth rates, I think we will be able to wipe out poverty like in East Asia and other fast developing economies. |
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Q: Your govt. had decided to spend 90% income of privatization on debt retirement and 10% on election. But the whole amount is spent on development. What is the reason? |
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A. The privatization proceeds according to the law as to the use for debt retirement and this is what we precisely do. That’s one of the reasons why Debt to GDP ratio has come down from almost 100% of GDP down to 52% of GDP. So there is a substantial decline in debt burden. Privatization has played a major role in bringing it down. |
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Q: How effective do you think the UK Pakistani Business Directory is, for the improvement of trade relations between Pakistan and U.K.? |
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A. I think it provides the information to the people of U.K. as well as the businessmen in Pakistan for trade, investment and joint ventures. We also enjoy the old historic relationship. We understand the systems of each other. We inherited a lot of systems from the old colonial time. So there is a tradition of cooperation between U.K. and Pakistan. I think we can leverage on that. Pakistan, as I have mentioned earlier, has very large young population and this population can be a very effective labor force for U.K. investment in Pakistan, not only in manufacturing but also in the services sector. So I think opportunities are huge. U.K. has a very good technology base. U.K. also understands Pakistan in terms of availability of manpower, huge market and strategic location in Pakistan. I think this could be a very good place for U.K. industry to setup base and then expand in the region even going right into Central Asia , Middle East and India.
We have a free trade agreement with china. China is a huge market and I think U.K. companies who can setup base in Pakistan will have access to Chinese market which is a huge market and which would be one of the leading economies in the world. So there is an opportunity here for the UK investors to base in Pakistan and be able to access the Chinese market. We have a road link with China. We have got excellent relationships with China. So Pakistan can be a good place for business into China. |
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Q. Any message for the organizers of U.K. Pakistani Business Directory? |
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A. Pakistan is the homeland for Overseas Pakistanis. We can maintain good relations with Pakistan through travel, tourism, investment, joint ventures, businesses and we should take advantages from this relationship.
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