Pakistan and Free Market Objectives
A Course of Action for the 21st Century
Address before the D-Group - London
April 15, 1999

Ladies and Gentlemen:

Good evening. I am honoured to be invited to speak here before this distinguished group of business executives, and I would like to thank the D-Group and all assembled here for extending me such warm hospitality.

I am sure that all of you gathered here today are no strangers to either the business realities of present Asia, or the explosive growth in global economic integration we have experienced during this decade.

All companies — and countries — are racing to keep pace with the revolutionary power that the new technologies of communications and transportation afford us. We are, in every sense of the word, entering a century to be dominated by the rules of a global market.

And as we enter this new and exciting era, this new century, I am convinced that the new rules of the game are simple and concrete:

In the 21st Century, nations must uphold the principles of democracy and the rule of law.

In the 21st century, governments must guarantee basic freedoms and liberties to their citizens.

In the 21st Century, regions must promote free trade with minimal state intervention, and with a policy of non-intervention and mutual respect in inter-state relations.

In the new century, the concerns of the state will be driven more by considerations of trade and commerce, rather than by our traditional military - territorial considerations. And the success of a Nation shall be based upon its level of exports, hard currency reserves, its per capita GNP, and the creative genius of its citizens.

It is becoming very clear, as we enter the coming century, that the distinguishing feature between those nations that achieve success, and those that continue to fall behind, will be the degree to which they adopt the principles of free market economics.

And it is the free market economies that are now most open to and positioned to fully participate in the increasingly competitive but interconnected global economy.

PAKISTAN'S CURRENT ECONOMIC CRISIS

Pakistan, as with the other nations of South Asia, is desperate to be a more active participant in the emerging global economy. Thus far, our economic capacity to do so has been weakened, principally due to the conflicts that plague our region, and the resources these conflicts take away from our infrastructure, our education, our human and technical development, and our creative capacities.

However, while South Asia's conflicts, in particular the seemingly intractable animosity between Pakistan and India, have had a large role to play in hindering our region's economic growth, most devastating of late has been the domestic economic and political actions taken by the Nawaz Sharif regime.

Of most pressing concern has been the Sharif regime's attack on the Independent Power Producers in Pakistan.

My previous Administration’s creation of this investment mechanism, whereby the global investment world would underwrite power projects for Pakistan was a bold and decisive move, one that brought Pakistan finally into the 20th Century.

And, I know that there are many in the United Kingdom who have been watching these developments with an uneasy eye. The current regime's refusal to abide by legal contracts and normal codes of business conduct has done more to harm Pakistan's economic prospects than any economic sanctions might hope to achieve.

Let me give you an example: During my last administration, we sought and accomplished an economic agenda with foreign investment and privatization as our chief goals. By 1996, direct foreign investment into Pakistan was up to $3 billion per year.

Since the Sharif regime took power, attacked the IPPs and froze foreign currency accounts, direct foreign investment into Pakistan has fallen to zero.

We had a choice then and continue to have one now: either continue down the path of living off of aid and hand-outs from the global economy, or open our doors, our policies and our practices so that we, too, may participate in the benefits and competition of this new era.

But, Ladies and Gentlemen, before I continue down this path of criticizing the Sharif regime -- a topic some would say is too near my heart -- let me turn to how Pakistan can reopen to the world, and the steps that are needed to revitalize our economy.

THE PATH TO ECONOMIC RECOVERY

First and foremost, it is critical for Pakistan to again establish the trust and confidence of the international investor community. As we have seen in Mexico, Thailand and other nations of late, receiving and retaining the confidence of fickle investors is no easy task. However, as sovereign governments the world over become less able and have less resources for hand-outs, there is no other road for Pakistan to pursue.

To achieve this confidence and trust, Pakistan must ease the economic constraints imposed upon it, and here I lay out the programs of my party, the Pakistan Peoples Party:

Privatization: We must increase the pace of privatization, but do so with a human face, and within this theme, we must reduce and eventually eliminate subsidies to bloated industries.

Reducing public debt: The government is borrowing too much, leaving the private sector starved for loans for growth, inventory, education or infrasturure. To reduce the public debt, it is paramount that our tax base be widened to include even the current Prime Minister and his cabinet. We can achieve a higher total tax return by increasing attention to vigilant collection rather than higher rates. Too much of our economy is now in the 'black market', and our next government will take active steps to bring this back into the mainstream.

Education, health and Human Development: As many of you know, Pakistan remains burdened by a high rate of population growth, as well as high illiteracy. Channeling our scarce resources from military expenditures at or above 7,000 meters into education and family planning is the first step.

Reduce tariffs: We can increase trade by reducing tariffs. As it stands now, too much of the goods and services entering Pakistan are done so illegally. Thus, by reducing tariffs, we feel we can actually increase revenue to federal programs, as well as stimulate more economic exchange.

Lastly and perhaps most difficult, is a radical restructuring of our ingrained business habits. These less tangible but perhaps most critical notions include fostering sound business practices, transparency, promoting efficient and good governance, eradicating corruption, and most important of all, fostering an unshakeable faith in the rule of law, not the rule of graft.

Ladies and Gentlemen, Pakistan is facing one of its hardest and most pressing economic crises in our history.

But there is hope.

We have in the past and can in the future, with the right policies, the right direction and the right intention, turn our crisis into opportunity.

And I hope, when the people of Pakistan make those decisions, that this group and your colleagues will again be there to grow with us.

I thank you for your time, and I look forward to hearing any comments or questions.

Go Back

Biography - Speeches - Articles/Interviews - Kashmir Policy - Letters - Audios/Videos - Poems - Photographs