"Promise in Pakistan": Newsweek
Interview: Shaukat Aziz—Riding 'A Tidal Wave'
Pakistan's P.M. is bullish on his country, and why not? Per capita income has doubled in only two years.
March 27, 2006 issue - Shaukat Aziz, a suave and savvy 30-year veteran of international banking, has been the architect of Pakistan's remarkable economic recovery ever since he joined President Pervez Musharraf's government in 1999. Last week the 57-year-old prime minister talked to NEWSWEEK's Zahid Hussain and Ron Moreau about the difficulty of restoring the country to economic health. Excerpts:
What prompted you to start an aggressive reform agenda six years ago?
The financial situation of Pakistan was precarious. We had high fiscal deficits and debt levels and our ability to pay was suspect. We didn't have enough money to pay the next month's oil-import bill. So we started ensuring fiscal discipline, containing expenditures and increasing income. We focused on investment and growth. We bit many bullets to restore credibility. The fundamentals of reform were deregulation, liberalization and privatization.
How far will you take the privatization process?
It is not the business of government to be in business. We decided to open everything up. We just sold 26 percent of Pakistan Telecom—which was overstaffed and inefficient—for $2.6 billion. We eventually want nothing in the public sector.
What's been the reaction of foreign investors?
Foreign-investor interest in Pakistan today is very strong. This year foreign investment will be the highest in Pakistan's history, at close to $3 billion. There are opportunities in agribusiness, IT, telecom, software, hotels, engineering goods and infrastructure. We see Pakistan as a hub for many multinationals.
What's your reaction to the criticism that GDP growth is not trickling down to the poor?
Income is spreading. In the past three years we have seen the emergence of a middle class that is creating demand and driving a lot of the growth. Our per capita income has gone up to $800. Two years ago it was $400. The highest incidence of poverty is in the rural areas where 60 percent of our population lives.
What is Pakistan's biggest economic challenge?
The challenge is to continue the reforms. It's a continuous process. Globalization is like a tidal wave. If you ride it, you will go far. If you try to stop it, you will be blown away. We decided to ride it.
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