Shaukat Aziz |
Agricultural growth is expected to register a positive swing of four per cent, Aziz said. With agriculture and agro-based industries making up 25 per cent of GDP, this would have enormous impact, he added.
"Had we not started the reform process two years ago and sustained it, we would not have been able to withstand these shocks, or the slump, post September 11," Aziz said yesterday, while speaking to Gulf News. He noted that keeping growth positive was a major achievement for Pakistan's moribund economy, as was reining in inflation.
"Reforms take time, they are painful, and they have a cost, but in the end it's the only way to reverse the damage caused by the short term fixes, and the imprudent financial management of the past. Reforms are doable," he stressed. "Carrying out structural reforms over a long period of time and building a strong base is the only way."
Under his stewardship, Pakistan's foreign exchange reserves are at their highest at $5 billion, while the rescheduling of foreign debt, just under $38 billion was also on schedule.
The World Bank, which has lent Pakistan over $10 billion since 1952, of which $7.2 billion has yet to be repaid, recently praised Pakistan for matching words with action. It announced it would lend Pakistan $500 million, the largest one-off credit in the history of the bank.
"We still have some way to go in tax reform for instance and privatisation, but Pakistan's reforms are aimed at poverty alleviation and social sector development. Unlike a few years ago when there was a question mark over where we were going, today, the economy has stabilised, inflation is under control, there is transparency in governance, and no questions over debt rescheduling," Aziz stressed.
Aziz is returning home after participating in an UN Development Programme conference in Tehran, seeking to open up landlocked Afghanistan to restore its place at the heart of central Asian commerce. "It's good for the region," he said.
Long term investors who now analyse Pakistan saw its trained workforce, its key geographical juxtaposition between Central and South Asia, looking towards the Middle East and Africa, as positive indicators.
He also said Pakistan was committed to the Iran-Pakistan-India gas pipeline. Pakistan was waiting for reports from two feasibility studies, one for the overland route and other for the shallow water route.
"Apart from the Iran pipeline, we are talking to Turkmenistan on a pipeline from Afghanistan to Pakistan to the Arabian Sea and on to India."
He sees the major challenge ahead as financing. Equally, multilateral promoters would be needed to give the kind of security guarantees that countries like India would seek to ensure gas flow would not be held hostage to India-Pakistan tensions.
Aziz, who says the true potential of South Asia lies untapped, said it was time India and Pakistan resolved their differences amicably rather than resort to the kind of brinkmanship that has resulted in the mobilisation of a million troops on their border. The mobilisation costs Pakistan $250 million a year, he said, and would cost India at least five times that.
"We believe that in the 21st century you cannot solve problems by sending troops to the border, our war should be against poverty, we need to build, our resources can be put to much better use," he said.
