tag:blogger.com,1999:blog-5848640164815342479.post5283642167010178702..comments2024-03-18T16:01:13.871-07:00Comments on Haq's Musings: Shaukat Aziz's Economic LegacyRiaz Haqhttp://www.blogger.com/profile/00522781692886598586noreply@blogger.comBlogger45125tag:blogger.com,1999:blog-5848640164815342479.post-3712132492870173182022-09-18T08:21:14.862-07:002022-09-18T08:21:14.862-07:00Dear Riaz Haq Sahab after reading your article in ...Dear Riaz Haq Sahab after reading your article in Sep 2022 I have a question that how come you stole my thoughts and words from my mind and heart you wrote this article in year 2008 many years ago. No doubt Riaz sahab you are gem. Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-5848640164815342479.post-83691291088054040162016-05-18T07:43:38.315-07:002016-05-18T07:43:38.315-07:00#China-#Pakistan railroad will help curb extremism...#China-#Pakistan railroad will help curb extremism: Ex-Pakistan PM Shaukat Aziz. #CPEC<br /><br />http://www.cnbc.com/2016/05/18/china-pakistan-railroad-will-help-curb-extremism-ex-pakistan-pm.html<br /><br />The China Pakistan Economic Corridor (CPEC), a railroad which will traverse western China through Pakistan, will help job creation as well as help to curb terrorism as people grow more prosperous, Pakistan's former prime minister told CNBC on Wednesday.<br /><br />The $46B deal agreed upon between China and Pakistan will allow China to avoid its current maritime sea routes to bring products into the Middle East and Europe.<br /><br />It will develop connectivity and create economic activity in Pakistan, former Pakistani Prime Minister Shaukat Aziz said.<br /><br />"When you build a road or a highway through an area where there is none, you create economic activity, you create jobs, secondly new cities come up along that route , thirdly you have industrial estates coming so a lot of job creation takes place," said Aziz.<br /><br />Despite a warning from the Pentagon that China is looking to set up a naval base in the country, the Pakistani army chief visited Beijing earlier this week to further discuss the project and the Pakistani army's involvement. <br /><br />The Pakistani army will provide 15,000 special security forces to protect the investment in Pakistan, which has suffered greatly over the years due to security and terrorism issue.<br /><br />"Whenever you have empty bellies, people get more vulnerable and subject to extreme behavior. If you create economic activity and give them a reason to live, if you give them a better tomorrow than yesterday, people tend to be more peaceful," said Aziz. <br /><br />"We have seen over the years that in areas that have grown fast and where economic growth is strong, extremism and terrorism reduces," Aziz told CNBC. <br /><br />"This is a serious initiative and we will do all what it takes to provide security and leverage this linkage between the warm waters of the Arabian sea all the way up to China." <br />Riaz Haqhttps://www.blogger.com/profile/00522781692886598586noreply@blogger.comtag:blogger.com,1999:blog-5848640164815342479.post-49903550005592913672013-03-30T19:49:25.821-07:002013-03-30T19:49:25.821-07:00Here's an ET report on social sector developme...Here's an <a href="http://tribune.com.pk/story/527474/human-development-report-2013-the-rise-of-the-south-as-others-rise-pakistan-parks-the-bus/" rel="nofollow">ET report</a> on social sector development during Musharraf years:<br /><br /><i>According to the report’s HDI list, between 2000 and 2007, which roughly corresponds with General Pervez Musharraf’s regime, the Human Development Index rose 18.9 per cent — an annual average of 2.7 per cent.<br /><br />From 2007 to 2012 it only went up by 3.4 per cent, just under 0.7 per cent per annum. Somehow, things got even worse in the last three years of that time frame, with HDI increases crashing down as low as 0.59% — a negligible average annual increase of under 0.20 per cent.<br /><br />The 2013 Human Development Report “The Rise of the South: Human Progress in a Diverse World” is instrumental in the context of Pakistan, especially given the challenges faced today due to poor policy choices that have been confronted in the report.<br /><br />Meeting a small group of journalists here, Marc André Franche, UNDP Pakistan’s Country Director launched the report and said it is important for what it says and there are lessons to be learnt from countries with preconditions similar to Pakistan.</i><br /><br />http://tribune.com.pk/story/527474/human-development-report-2013-the-rise-of-the-south-as-others-rise-pakistan-parks-the-bus/Riaz Haqhttps://www.blogger.com/profile/00522781692886598586noreply@blogger.comtag:blogger.com,1999:blog-5848640164815342479.post-85517615677253318302012-05-19T18:56:28.462-07:002012-05-19T18:56:28.462-07:00Here's a Daily Times story on higher education...Here's a <a href="http://www.dailytimes.com.pk/default.asp?page=2012%5C05%5C20%5Cstory_20-5-2012_pg5_1" rel="nofollow">Daily Times</a> story on higher education growth in Pakistan:<br /><br /><i>Shaikh also highlighted the performance and achievements of government during last 10 years. He said that there are 71 universities in Pakistan in 2002, but in last 10 years, 66 new universities have been added in Pakistan. Previously, female enrolment was 37 percent, now it is 45 percent. Previously, numbers of PhDs were 1,500, now 10,000 new students have been enrolled in PhD, added the minister. He also mentioned that federal government has spent Rs 160 billion on promotion of higher education in the country. The federal minister said that federal government has transferred additional Rs 800 billion to provinces during the last four years to enable the provinces to provide their population best social services like health education. He also advised students to be proud and loyal Pakistanis. Shaikh said that it is a great day for the degree holding students, so they must thank their parents and teachers. He also assured that the government is doing every effort for the promotion of education sector in Pakistan.</i><br /><br />http://www.dailytimes.com.pk/default.asp?page=2012\05\20\story_20-5-2012_pg5_1Riaz Haqhttps://www.blogger.com/profile/00522781692886598586noreply@blogger.comtag:blogger.com,1999:blog-5848640164815342479.post-62282136217524206642012-04-11T19:21:24.019-07:002012-04-11T19:21:24.019-07:00Here's a News report of losses at sta6e-owned ...Here's a <a href="http://www.thenews.com.pk/Todays-News-3-102456-Pakistan-Steel-Mills-denied-Rs9bn-bailout-package" rel="nofollow">News report</a> of losses at sta6e-owned Pakistan Steel Mills:<br /><br /><i>The Federal Cabinet that met here on Wednesday with Prime Minister Yousaf Raza Gilani in the chair turned down the loss making Pakistan Steel Mills’ (PSM) request for Rs9 billion to bail it out of financial crisis.<br /><br /> <br /><br />PSM, a few days ago, had moved a summary to the federal cabinet through the Ministry of Production to seek a Rs9 billion bailout package from the government as it was in severe financial crisis; and the Mills was running below 20 percent of its capacity. The cabinet deferred the Mills request until the next meeting of the cabinet.<br /><br /> <br /><br />It is worth mentioning that PSM remained a profit-making entity for seven years, from 2000 to 2007, but as the PPP-led coalition government came into office, the entity started accumulating billions of rupees losses and continues to nosedive. The Mills is spending about Rs1.2 billion a month under different heads, whether it is making profit or raking up losses. The giant holds a constant burden of 21,000 employees despite suffering from low productivity.<br /><br /> <br /><br />The Ministry of Production is also now distancing itself from this politically sensitive entity and believes that the Mills is more in control of the Cabinet Committee on Restructuring of State-Owned Enterprises, headed by the Finance Minister Dr Hafeez Sheikh, well-placed sources told The News.<br /><br /> <br /><br />Interestingly, last year in November, the federal minister for production Chaudhry Anwar Ali Cheema also gave a blatant statement by calling the Mills “nothing but a burden on the economy of the country” and had advised the government that it is better to get rid of it rather than feeding it with billions of rupees every year.<br /><br /> <br /><br />Official sources, while giving a blue print of the Mills performance, said that during 2007-08, PSM production attainment stood at 82 percent of its capacity utilisation and after that, it took a declining course to 64 percent in 2008-09, 40 percent in 2009-10 and 35 percent in 2010-11.<br /><br /> <br /><br />This year too, due to shortage of raw material including iron ore and coal, the Mills is running on less than 20 percent of its capacity.<br /><br /> <br /><br />As far as the sale of PSM products is concerned, it was recorded at Rs42.938 billion in 2007-08 and has been on the decline since then, with Rs34.340 billion in 2008-09, Rs23.832 billion in 2009-10 and Rs27.379 billion in 2010-11.<br /><br /> <br /><br />The last time PSM had fetched Rs2.38 billion in profit was in 2007-08, while after that it continuously racked up losses. In 2008-09, its losses were 26.53 billion in 2009-10 it was Rs11.52 billion and in 2010-11 it was Rs11.49 billion.<br /><br /> <br /><br />According to PSM data, during the first quarter (July-September 2011-12) it accumulated losses of about Rs4.3 billion.</i><br /><br />http://www.thenews.com.pk/Todays-News-3-102456-Pakistan-Steel-Mills-denied-Rs9bn-bailout-packageRiaz Haqhttps://www.blogger.com/profile/00522781692886598586noreply@blogger.comtag:blogger.com,1999:blog-5848640164815342479.post-51083566804111251212012-01-09T19:14:44.866-08:002012-01-09T19:14:44.866-08:00Here's a report on Fortune magazine's inte...Here's a report on <a href="http://finance.fortune.cnn.com/2012/01/09/pakistan-shaukat-aziz/?section=magazines_fortune" rel="nofollow">Fortune magazine's interview</a> with Pakistan's former leader Shaukat Aziz Part II:<br /><br /><i>You mentioned the need for good management. How would you assess the current management of the economy? I ask that in light of the lapsing of the stabilization plan with the IMF.<br /><br />Being out of the IMF -- obviously this reflects the desire of the government to have more flexibility to pursue its reforms. The IMF program does bring with it certain macroeconomic discipline and that's beneficial, but I also believe in economic sovereignty. You need good governance and good management, but abdicating the economy to the IMF is not the way to succeed. What we need is growth and job creation, like every other country in the world.<br /><br />The disagreement with the IMF is at least in part related to tax collection, which has been notoriously weak in Pakistan. There is a lot of concern whether Pakistan can muster the political will to make tough reforms, partly because of self-serving elites among the political class that have brought the country to the point of being nearly a failed state. <br /><br />No, I think that's not true. The country is large -- roughly 180 million people -- and it's functioning. It has many challenges -- governance issues, transparency and management issues -- on top of the security issues that have cost us dearly. But the country is functioning. Obviously it could function better, but it's not come to a grinding halt. Life is going on.<br /><br />Don't expect an Iranian oil crisis<br /><br />Clearly, the country is facing a challenging situation financially, and tax reform has been an issue. It's true there is low tax compliance, but you have to look at the political impact -- not just the economic impact -- of taxes. The tax system has been around for a long time. Trade-offs have to be made; indirect taxes -- sales tax and customs duties -- have grown because of that, quite handsomely. Income tax is also up, but that is mostly out of big corporations' profits.<br /><br />The key question is: How do we get growth? The pie has to get bigger for you to collect more taxes. You can't squeeze the lemon if there's no juice in it.<br /><br />Moving on to Afghanistan, the U.S. is being more realistic about its transformative agenda and the Obama administration seems to be determined to wind things down. How do you see this playing out?<br /><br />I think this is the right way to go. The presence of foreign troops generates ill effects and the sooner they are gone, the better. But the exit strategy has to be very carefully choreographed.<br /><br />We need a Marshall Plan-like approach, a massive program for reconstruction. The World Bank, the Asian Development Bank, the sovereign banks, and many individual countries, have to be involved. There was a very successful meeting recently of Turkey, Pakistan, Afghanistan and others in Istanbul. People need to see a future, that tomorrow will be better than yesterday. The people of Afghanistan will have to work hard themselves to leverage this opportunity. It's a good thing that the U.S. and the Taliban are talking -- all stakeholders have to be included. I'm cautiously optimistic that adversity can be changed into an opportunity if it is funded well.<br /><br />U.S.-Pakistan relations are generally refracted through the prism of Afghanistan but also through the fact that Pakistan is a nuclear power.<br /><br />I think certainly the relationship is opportunistic on both sides. But I think the U.S. is pursuing a policy of both engagement and containment of Pakistan at the same time. We are both a friend and an adversary. Therein lies the conflict in the relationship. There is a trust deficit and when it comes to the nuclear issue there is a fundamental problem.....</i><br /><br />http://finance.fortune.cnn.com/2012/01/09/pakistan-shaukat-aziz/?section=magazines_fortuneRiaz Haqhttps://www.blogger.com/profile/00522781692886598586noreply@blogger.comtag:blogger.com,1999:blog-5848640164815342479.post-12575956420189413002012-01-09T18:32:38.725-08:002012-01-09T18:32:38.725-08:00Here's a report on Fortune magazine's inte...Here's a report on <a href="http://finance.fortune.cnn.com/2012/01/09/pakistan-shaukat-aziz/?section=magazines_fortune" rel="nofollow">Fortune magazine's interview</a> with Pakistan's former leader Shaukat Aziz:<br /><br /><i>Despite the regular eruptions of bad news from Pakistan, Shaukat Aziz, a former finance and prime minister there, remains cautiously bullish about his country's prospects, including the peace dividend that could come with the orderly exit of U.S. troops from Afghanistan. But that depends, he says, on a Marshall Plan-like reconstruction of Afghanistan -- and the U.S. delivering on tribal economic development plans.<br /><br />That might seem overly ambitious for distracted Western capitals with tapped out coffers. But the 'mostly-sunny' technocratic vision is not unusual for Aziz, a former Citibank (C) executive who presided over strong growth as finance minister after General Pervez Musharraf staged a coup in 1999. (Musharraf just announced he would shortly be returning to Pakistan -- and risking arrest -- from Dubai where he has been since leaving office.)<br /><br />Aziz, 64, was elected prime minister in 2004 (surviving an assassination attempt while campaigning) and was the first of 23 predecessors to serve out a full term, until 2007. He took up residence in London soon after and now serves on the board of the British hotel chain Millennium and Copthorne Hotels, and as an advisor to the Blackstone Group (BX).<br /><br />Aziz recently spoke with Fortune about the state of Pakistan's economy, how to rebuild Afghanistan, and why Pakistan deserves a free trade agreement with the U.S. Below is an edited transcript of that discussion.<br /><br />It's been more than six years since Goldman Sachs (GS) recognized Pakistan among the Next Eleven newly industrialized countries -- inflation is up, investment is at a 40-year low, and infrastructure is deteriorating, particularly in the power sector. By just about any measure things are not particularly good, so what is the source of your optimism about the Pakistani economy?<br /><br />The problems of the world economy have obviously leaked to Pakistan. Yes, investment is down, trade also, but in Pakistan's case a lot of this is due to the security situation, the war on terror. We have to pay a huge price in terms of damaging our investor confidence -- both domestic and foreign.<br /><br />On the other hand, we should bear in mind that more than two-thirds of the population lives in rural areas and agriculture has done well, especially in cotton -- prices and exports are up and the farmer is relatively more comfortable.<br /><br />The country's human capital is a strong suit, the Pakistani people are very talented, their skills levels are impressive and they are hard-working. There's a huge number of Pakistanis working overseas and we can export a few more million and there won't be an iota of difference because there is a whole pipeline of trained – and untrained - people coming.<br />-------------</i><br /><br />http://finance.fortune.cnn.com/2012/01/09/pakistan-shaukat-aziz/?section=magazines_fortuneRiaz Haqhttps://www.blogger.com/profile/00522781692886598586noreply@blogger.comtag:blogger.com,1999:blog-5848640164815342479.post-19065867055687588572010-03-04T20:41:21.310-08:002010-03-04T20:41:21.310-08:00Dr. Ashfaque H. Khan, Dean of NUST Business School...Dr. Ashfaque H. Khan, Dean of NUST Business School, has written a <a href="http://www.riazhaq.com/2010/03/pakistans-economy-review-2008-2010.html" rel="nofollow">guest post</a> on this blog. Here are some excerpts from it:<br /><br />" Pakistan positioned itself as one of the four fastest growing economies in the Asian region during 2000-07 with its growth averaging 7.0 per cent per year for most of this period. As a result of strong economic growth, Pakistan succeeded in reducing poverty by one-half, creating almost 13 million jobs, halving the country's debt burden, raising foreign exchange reserves to a comfortable position and propping the country's exchange rate, restoring investors' confidence and most importantly, taking Pakistan out of the IMF Program.<br /><br />The present government inherited a relatively sound economy on March 31, 2008. It inherited foreign exchange reserves of $13.3 billion, exchange rate at Rs62.76 per US dollar, the KSE index at 15,125 with market capitalization at $74 billion, inflation at 20.6 per cent and the country's debt burden on a declining path. The government itself acknowledged in the same document that "the macroeconomic situation deteriorated significantly in 2007/08 and the first four months of 2008/09 owing to adverse security developments, large exogenous price shocks (oil and food), global financial turmoil, and policy inaction during the political transition to the new government". (Para 3 of the MEFP, November 20, 2008)"Riaz Haqhttps://www.blogger.com/profile/00522781692886598586noreply@blogger.comtag:blogger.com,1999:blog-5848640164815342479.post-74119976514176990412010-01-15T20:52:38.000-08:002010-01-15T20:52:38.000-08:00The economic results of the decade of 1999-2009 sp...The economic results of the decade of 1999-2009 speak much louder than any denials of the reality by the naysayers and Mush bashers, who are highly politicized but mostly clueless about good governance, economy, investing and business.<br /><br />They are unaware of the best kept secret that Pakistani markets significantly outperformed those in the much hyped BRIC nations by a wide margin.<br /><br />Pakistan's key share index KSE-100 was just over 1000 points at the end of 1999, and it closed at over 9727.40 on Dec 31, 2009. Pakistan rupee remained quite stable at 60 rupees to a US dollar until 2008, slipping only recently to about 80 rupees to a dollar. In spite of the currency decline, Pakistan's KSE-100 stock index surged 55% in 2009 in US dollar terms and 65% in rupee terms, after the IMF bailout that forced the current government to acknowledge the good policies and achievements during Musharaf years.<br /><br />During the same period of 1999-2009, Mumbai Sensex index moved from just over 5000 points to close at 17,464.81. If you had invested $100 in KSE-100 stocks on Dec. 31, 1999, you'd have over $900 today, while $100 invested in the Mumbai's Sensex stocks would be worth $274. Investment of $100 in emerging-market stocks in general on Dec. 31, 1999, would get you about $262 today, while $100 invested in the S&P500 would be worth $91.<br /><br />Pakistan's KSE-100 stock index surged 55% in 2009 in US dollar terms and 65% in rupee terms, in a year that also saw the South Asian nation wracked by increased violence and its state institutions described by various media talking heads as being on the verge of collapse. Even more surprising is the whopping 825% increase in KSE-100 from 1999 to 2009, which makes it a significantly better performer than the BRIC nations. BRIC darling China has actually underperformed its peers, rising only 150 percent compared with energy-rich Brazil (520 percent) and Russia (326 percent) or well-regulated India (274 percent), which some investors see as a safer and more diverse bet compared with the Chinese equity market, which is dominated by bank stocks. This is the kind of performance that has got the attention of some of the top investors and investment firms around the world.<br /><br />While such obviously breath-taking results may not mean much to those determined to deny the achievements of a "dictator", they are not lost on smart investors, like those at Goldman Sachs and Franklin Templeton, both of whom are bullish on Pakistan, in spite of its current difficulties. Musharraf's legacy will live on with the investors' faith in Pakistan.<br /><br />http://www.riazhaq.com/2010/01/karachi-tops-mumbai-in-stock.htmlRiaz Haqhttps://www.blogger.com/profile/00522781692886598586noreply@blogger.comtag:blogger.com,1999:blog-5848640164815342479.post-19421533800840440502009-06-09T00:09:10.944-07:002009-06-09T00:09:10.944-07:00Sir
i visted your blog and like it respect fully s...Sir<br />i visted your blog and like it respect fully say that the blogger navigation bar is not giving professional look<br /><br />so if you want to hide that bar please visit<br /><br />http://www.crunchitech.com/2009/06/08/remove-navbar-in-blogger-blogs/<br /><br />hope you will understand this post<br /><br />regards<br /><br />m.HaroonAnonymoushttps://www.blogger.com/profile/09461533277638394626noreply@blogger.comtag:blogger.com,1999:blog-5848640164815342479.post-56787510296506642712009-03-12T11:48:00.000-07:002009-03-12T11:48:00.000-07:00Thanks to Shaukat Aziz's efforts, Pakistan has bee...Thanks to Shaukat Aziz's efforts, Pakistan has been ranked 34 out of 52 countries in the World Economic Forum's first Financial Development Report, which was released in Pakistan through the Competitiveness Support Fund (CSF) Thursday.<BR/><BR/>The report is a comprehensive analysis of financial systems and capital markets in 52 countries that explores key drivers of financial system development and economic growth in developing and developed countries and serves as a tool by which countries can benchmark themselves and establish priorities for financial system improvement.<BR/><BR/>Arthur Bayhan, Chief Executive of the Competitiveness Support, said: "I am very happy to see that financial system in Pakistan is well reformed and competitive vis-à-vis Asia and Europe. Pakistan is ranked ahead of the Russian Federation (35), Indonesia (38), Turkey (39), Poland (41), Brazil (40), Philippines (48) and Kazakhstan (45)."<BR/><BR/>The United States narrowly edged the United Kingdom to take the top position in the Financial Development Index. The United Kingdom was second while China ranked 24 and India 31.<BR/><BR/>The rankings are based on over 120 variables spanning institutional and business environments, financial stability, and size and depth of capital markets, among other factors, in assessing the complex financial systems of the 52 countries studied.<BR/><BR/>An important and unique measure captured by the Index includes the degree to which businesses feel they can easily access capital. The Financial Development Index is based on three main pillars - Factors, Policies and Institutions, Financial Intermediation and Capital Availability and Access. These are further divided into sub - pillars.<BR/><BR/>Pakistan ranks 49th in institutional environment, 50th in business environment and 37th in Financial Stability. In the Financial Intermediation Pillar Pakistan ranks 25th in banks, 42nd in non-banks and 17th in financial markets. Under Capital Availability and Access, Pakistan ranks 33.<BR/><BR/>Indicators showed that in business environment Pakistan had development advantage in cost to export, ranking 6th. In Financial Stability Change in Real Effective Exchange rate Pakistan is at 20th, External debt to GDP 10th, Frequency of banking crises 1st, stability index 15th. In corporate governance Pakistan ranked at the very top in shareholder rights index, 14th in strength of investor protection. In the Non-banks pillar, Pakistan ranked 9th in the real growth of direct insurance premiums. In equity market movement Pakistan ranked at the top again.Riaz Haqhttps://www.blogger.com/profile/00522781692886598586noreply@blogger.comtag:blogger.com,1999:blog-5848640164815342479.post-78926852559621995582008-12-30T05:44:00.000-08:002008-12-30T05:44:00.000-08:00Foreign reserves Phenomenon: Shaukat Aziz versus P...Foreign reserves Phenomenon: Shaukat Aziz versus PPP<BR/><BR/>By October 2007, at the end of Prime Minister Shaukat Aziz’s tenure, Pakistan raised back its Foreign Reserves to a handsome $16.4 billion. His exceptional policies kept our trade deficit controlled at $13 billion, exports boomed to $18 billion, revenue generation increased to become $13 billion and attracted foreign investment of $8.4 billion.<BR/><BR/>http://presidentmusharraf.wordpress.com/2008/08/21/foreign-reserves-phenomenon-shaukat-aziz-versus-ppp/Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-5848640164815342479.post-35177090941104744412008-11-23T22:03:00.000-08:002008-11-23T22:03:00.000-08:00The growth in manufacturing sector, which you now ...The growth in manufacturing sector, which you now accept, was not entirely due to the automobile sector which would not be bad either. In fact, there was manufacturing and export growth all around. Motorcycles were manufactured with almost 100% of the parts indigenously, and the sales grew rapidly, creating lots of jobs. The massive roll out of the wireless and Internet infrastructure required the manufacturing and installation of basic stuff like metal cabinets, routers/switches and cell towers. It also boosted the skills of young engineers and technicians. Leather and Textile sector flourished and exports grew to more than 200% between 2003 and 2007. Revenue collection doubled to over 1 trillion rupees. <BR/><BR/>The fundamental change in the last year is one of massive loss of confidence that has driven away businesses and investors. This change is reflected in Pakistan's sovereign debt major downgrade and rapidly rising cost of default swaps.<BR/><BR/>Again, you and I disagree very fundamentally on how to revive and stimulate a moribund economy. It can not be done without a strong consumer sector. Consumer sector accounts for more than 2/3rds of the US economy. And curreently, that's the sector that US government is trying to stimulate with interest rate cuts and easing of lending and money supply. Unless the consumer is willing to spend, no one wants to manufacture products, build real estate or invest. <BR/><BR/>The government's primary job is to pursue policies that create confidence in the country and the economy for investors to invest, businesses to produce (and create jobs) and consumers to find jobs and spend what they earn.<BR/><BR/>I don't think I can convince you that Aziz and Musharraf did a good job because you are so determined to believe otherwise.Riaz Haqhttps://www.blogger.com/profile/00522781692886598586noreply@blogger.comtag:blogger.com,1999:blog-5848640164815342479.post-46286332686739048232008-11-23T21:28:00.000-08:002008-11-23T21:28:00.000-08:00Dear Mr.Haq,Thank you once again for continuing th...Dear Mr.Haq,<BR/>Thank you once again for continuing this discussion. I hope it can help us to gain a better understanding of our economy and aid us in discovering where we are going wrong in deciphering our leaders' economic policies. This debate between us seems to present one thing, either one of us is being biased in our assesment of Mr. Aziz's policies. <BR/><BR/>You had made a valid point when you said that Economists throughout the world have not been given managerial positions, but are mainly used in an advisory capacity by governments. This is also true in the case of Pakistan where Gen. Musharraf, and even the current government have formed an economic advisory council to advise the government on policy matters. But, as I even mentioned earlier, economists who were part of Gen. Musharraf's team like Daniyal Aziz and Nadeem-ul-Haq have openly come out on national television and declared that they completely disagreed with the economic policies during his tenure and had even warned the govt. of that day about these policies' after effects, for which they were strictly admonished and told to keep quiet! Maybe, had the previous govt. taken heed to their advice we would not have been facing this situation today. <BR/><BR/>In the excerpt which you have taken from the UN report, it has been mentioned, and rightly so about the growth in the manufacturing sector, however, it may be mentioned here that this was largely due to the 50% growth in the automobile sector, which in turn grew astronomically due to the policy of the State bank in conjunction with the govt. to introduce consumer car financing loans to the general public, which led to a huge increase in demand for automobiles, and thus the growth in this sector and even the GDP was one-sided.<BR/><BR/>With regards to the agricultural sector growth, I admit the fact that we had a surplus in wheat and cotton, but then if the agri sector registered such growth, then why are we facing a massive shortage of essential items in the country now? Maybe the answer lies in my first post where i mentioned the reason for the wheat shortage.<BR/><BR/>In the UN report, it has been mentioned that exports were sluggish, reinforcing my contention about the massive trade deficit which is so ruthlessly eroding our foreign exchange reserves today. Plus it has also been said in the report that growth was largely due to the high domestic demand, which in my view, is due to the policy of massive govt. borrowing from the state bank, which increased money supply leading to huge demand, which in turn countered by short supply, has led to hyper inflation today.<BR/><BR/>I may again mention here that although the current govts. policies are also not very inspiring, however, it would be unfair to blame them for this mess in its entirety.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-5848640164815342479.post-21316600286522418162008-11-21T21:41:00.000-08:002008-11-21T21:41:00.000-08:00Saad,Please read carefully the following excerpt f...Saad,<BR/>Please read carefully the following excerpt from the UN Economic Survey 2008 report I have cited in my post:<BR/><BR/>"Pakistan’s economy maintained its momentum in 2007, growing by 7%, slightly more than the 6.6% for 2006. Agricultural sector growth recovered sharply, from 1.6% in 2006 to 5% in 2007, while the manufacturing sector growth continued at 8.4% in 2007, slightly more moderate than the 10% for 2006. Services grew at 8% in 2007, down from 9.6% in 2006. But exports were sluggish in 2007, with economic growth largely driven by strong domestic demand. Investment overtook consumption, helped by a surge in domestic private investment and record foreign direct investment (FDI) flows. In 2007, investment in real terms increased by over 20%."<BR/><BR/>There is a difference between portfolio investments and foreign direct investment(FDI). Pakistan attracted both but the FDI far exceeded portfolio investments. FDI was invested in plant and equipment that created jobs in industrial and manufacturing sectors which experienced double digit growth 2004-6 and declined slightly in 2007.<BR/><BR/>As to the economists, they are theoretical/analytical people not considered the best managers of the economy. In the US and Europe, economists are mostly in advisory roles, not management roles in government.Riaz Haqhttps://www.blogger.com/profile/00522781692886598586noreply@blogger.comtag:blogger.com,1999:blog-5848640164815342479.post-86639440426336711172008-11-21T21:05:00.000-08:002008-11-21T21:05:00.000-08:00Dear Mr. Haq, It is true that encouraging a consum...Dear Mr. Haq, <BR/>It is true that encouraging a consumer driven economy attracted business and investor confidence, but an analysis by many eminent economists, whose views which you seem to have so ruthlessly dismissed, suggests that the consumer boom, as mentioned in my earlier posts, led to an attraction of investment in the stock markets and real estate sectors etc. These were really high, and this was also registered in the GDP growth, however, the agricultural and manufacturing sectors in the economy were devoid of any solid investment, and when the global financial crisis came, the investors took out their investments from the economy, leading to a massive forex and stock exchange crisis. The Aziz government also gave a subsidy of as much as Rs.40 on every litre of Oil at a time when the oil prices skyrocketed, but because of this policy, the prices did not increase as fast in Pakistan during his tenure. However, when the new govt. came, they were not left with enough money in their reseves to pay for this subsidy, leading to a massive increase in oil prices in the country, which could not be decreased even when the international oil prices nose dived!! Thus, a look at the new govts. problems and every crisis they are facing can evetually be traced back to Mr. Aziz's policies, be it the massive trade deficit, high prices , forex scandal and even the IMF loan. Therefore I am indeed compelled to believe that Mr. Aziz's policies were certainly flawed depsite my sincere efforts not to do so. <BR/>I must mention here that I am not a fan of the 'current lot' either and i dont think many people are. But i think that we must rise above our personal likes and dislikes and analyse things from a neutral's perspective in order to avoid jumping to unwarranted conclusions, and so far, with whatever i have read about Mr. Aziz's policies, it has failed to convince me to change my opinion about him.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-5848640164815342479.post-66611680250181293252008-11-17T17:59:00.000-08:002008-11-17T17:59:00.000-08:00PS: Sorry I mistyped when I said "Plus, do you thi...PS: Sorry I mistyped when I said "Plus, do you think that his policies of lowering duty on luxury export items," I actually meant import items like luxury vehicles etc not export items.<BR/><BR/>Thank You.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-5848640164815342479.post-60617048740297644592008-11-17T17:58:00.000-08:002008-11-17T17:58:00.000-08:00Dear Saad,In spite of your statement to the contra...Dear Saad,<BR/>In spite of your statement to the contrary, it seems from your arguments that you have already concluded the Aziz policy of encouraging consumer spending was wrong and he is responsible for the current economic mess. So, you and I have a fundamental disagreement on how to stimulate a dormant economy and encourage new business investment and spending by creating confidence among businesses, investors and consumers. Aziz brought Pakistan's banking and investment sector and economy from the dark ages into the modern age. <BR/><BR/>As to the IMF, Pakistan did break the bowl as it was considered good risk by commercial lenders and investors as long as Musharraf and Aziz were in charge. In fact, 2006 and 2007 were banner years for FDI in Pakistan. All this capital that flowed had a multiplier effect in creating even more growth and jobs than the FDI itself. <BR/><BR/>It takes a long time to build trust and confidence which can be lost by irresponsible leadership in charge. Within a very short period after Musharraf's departure, credit default swaps on Pakistan's debt have more than quintupled to almost a million dollars per year for $10m loan over 5 years.<BR/><BR/>In spite of whatever flaws Aziz has, I'd rather have him manage Pakistan's economy than the current lot which has brought nothing but disaster.Riaz Haqhttps://www.blogger.com/profile/00522781692886598586noreply@blogger.comtag:blogger.com,1999:blog-5848640164815342479.post-67647628757578757992008-11-17T17:24:00.000-08:002008-11-17T17:24:00.000-08:00Dear Mr.Haq,Thank you for your reply. I still have...Dear Mr.Haq,<BR/>Thank you for your reply. I still have not formed my opinion about Shaukat Aziz yet as I am still researching about his economic legacy. However,with due apologies, I am not fully convinced with your reply, It is true that Economists are often ridiculed for arguing amongst themselves, however they are the experts in this field who know the facts and figures and so it is unfair to criticize them. Shaukat Aziz was a banker, not an economist, and thus I think he pursued the policy of attracting consumer expenditure by fiscal expansion and monetary easing which created high demand, which, compounded with not enough supply, has led to the current inflationary pressure on the economy. Plus, do you think that his policies of lowering duty on luxury export items, which fuelled the consumer boom, was a good move because this is what is perceived responsible, along with the high oil prices, for the current huge balance of trade deficit, which has forced the government to go to the IMF? I clearly remember Shaukat Aziz making emotional statements, whenever he was presenting a budget in the parliament that we have "forever shed the begging bowl" atleast 10 times throughout his tenure. He and Musharraf firther used to claim that Pakistan will never go to the IMF or ask for a loan from anyone because of the reforms they have introduced. You have said that Shaukat Aziz did make some mistakes, but dont you think those few mistakes if they were so small in their magnitude,have led us on the brink of bankruptcy and achieved more bad than good?Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-5848640164815342479.post-63935966722770545692008-11-15T16:33:00.000-08:002008-11-15T16:33:00.000-08:00It's much easier to criticize than to deliver. Cri...It's much easier to criticize than to deliver. Critics and analysts are dime a dozen. Doers and deliverers are few. Especially the economists, the practitioners of dismal science, who never agree among themselves on anything. Aziz and Musharraf delivered the fastest ever growth in Pakistan, regardless of how you analyze it. Their policies created millions of jobs and a large, thriving middle class. A lot of the investments, production and trade are driven by confidence of the business community, the investors and the consumers. All of that confidence has now completely vanished with Zardari in charge. No one trusts him domestically or internationally. Finally, he's had to resort to appointing Shaukat Tarin, a protege of the much-maligned Shaukat Aziz, to help get the world to take them seriously. <BR/><BR/>As far as consumer economy is concerned, I have already explained how consumers form the backbone of any economy, including US, China and India. Without consumption, why would any one invest in an economy or a country? To export? Even exports are driven by consumption in other countries. <BR/><BR/>Shaukat Aziz is not infallible. He made mistakes and I have acknowledged those in my post. But he delivered results. And that's what matters.Riaz Haqhttps://www.blogger.com/profile/00522781692886598586noreply@blogger.comtag:blogger.com,1999:blog-5848640164815342479.post-19988810800015135332008-11-15T16:14:00.000-08:002008-11-15T16:14:00.000-08:00Dear Mr. Riaz,i myself am a student of economics a...Dear Mr. Riaz,<BR/>i myself am a student of economics and keep an eye over our country's economic affairs. Recently i read a book by noted economist shahid javed burki in which he has analysed the economic performance of Musharraf regime. in his book, Mr. Burki points out that GDP grew at an average of 8.5% in Pakistan during shaukat aziz's tenure, however, 1.5% was due to foreign direct inflows in the form of aid for the war on terror and by expats, another 1.5% of it was due to the monetary expansion (printing of notes)etc pursued by Aziz,and 2% was of the 'lost' agricultural output which was recovered after the serious droughts that plagued the country in the years before musharraf took over. Therefore, 5% of this GDP growth was of due to external factors and not as a result of Shaukat Aziz's policies. the actual growth which can be attributed to his efforts is the remaining 3.5% which is equal to those achieved during the Benazir and Nawaz governments in the 90's. So what is your take on that? Plus, Mr. Aziz was also blamed of pursuing a consumer driven consumption economy, encorugaing the real estate boom, and thus speculation, by many sectors, who allege that he did not focus on increasing agricultural output but on increasing consumer demand by printing notes etc. He also is also accused of exporting the surplus wheat we had last year, causing wheat shortage in our country now. Regarding the enrgy crisis, Shaukat Aziz's statements that he could not forecast the current upsurge in demand are ridiculous in my view. I mean then what else was he the finance minister for, for all these years? he had all the data and statistics at his disposal and therefore, he cannot make any excuse. Please correct me if I am wrong in this case. With the current global situation and financial crisis, the foreign investment in Pakistan has decreased, therefore our GDP has declined and less credit is available now. Recently members of Shaukat Aziz's economic team, like Daniyal Aziz for example, have come out and openly criticized his policies, arguing that they were strictly told by the government high upsd to keep quiet when they witnessed this "russian roulette" being played with our economy.<BR/>So please Mr. Haq let me know what you think and how would you justify and explain all these allegations.<BR/>thank you.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-5848640164815342479.post-28940152055074190252008-11-09T13:28:00.000-08:002008-11-09T13:28:00.000-08:00Dear Raiz Haq ,I thank you for clearing the issue ...Dear Raiz Haq ,<BR/><BR/>I thank you for clearing the issue and actually taking your time out in explaining to the people what work Mr Shakhat Aziz done for the country.<BR/>We know have a government who chose to be enter the elections on the their own accord and are doing nothing to bring the economy in control but instead blame the past leaders. I say to such people if you knew the present government could not steer the country in a better direction then why did they choose to come in power. People Mr Musraff and Shakhat Aziz were people who could explain their plans on the finger tips on who to get the country on its feet. Instead we now have leaders who when asked a question give a general answer not specific or related to the problem. How many times I have seen Mr Zardari when asked a serious question he begins to show his teeth and giggle. trying to divert the question and come up with a humorous answer. These people who are degrading the likes of Mashraff and Aziz actually have no answers infact a lot of the times they do not understand the questions they are asked. What a joke and belive me the joke is on the people of Pakistan who elected them.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-5848640164815342479.post-3498200825056671012008-10-28T15:03:00.000-07:002008-10-28T15:03:00.000-07:00SALAM,Mr Riaz Huq,You have really explained in det...SALAM,<BR/><BR/>Mr Riaz Huq,<BR/><BR/>You have really explained in detail about his achievments.I agree totally shaukat aziz was the brain behind reviving pakistans bankrupt economy and after 8 months of this government people should realise that he was the one which engineered our economic revival, dont understand people how they can just blame shaukat aziz and dont see the situation getting worse in this government, simply becasue they have not bothered to do anything about it.I am a great fan of musharraf and shaukat aziz and i have to say that you dont find many people recognising and admitting what shaukat aziz did for us but riaz huq you truely are a great pakistani and a very intelligent person, theirs not many who really understand what he did for us, but have to say that alot of people are beginning to realise it now that he was the one.......Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-5848640164815342479.post-27845897333501689412008-10-25T20:58:00.000-07:002008-10-25T20:58:00.000-07:00Here's a recent news report regarding Aziz's comme...Here's a recent news report regarding Aziz's comments on current global financial crisis:<BR/><BR/><I>Former prime minister Shau kat Aziz accused the International Monetary Fund on Thursday of failing to show leadership during what he described as a "historic" global financial crisis.<BR/><BR/>As world leaders met to shore up distressed financial institutions, Mr Aziz charged that "this global institution which is supposed to look at everything going on was not even in the room where meetings are going on."<BR/><BR/>Speaking at an international business conference in Manila, the former Citigroup banker said interest rate cuts, recapitalisation of banks and liquidity injections, while helpful, would not solve the problem.<BR/><BR/>"The very fabric of the global financial system is under threat," Aziz said.<BR/><BR/>Mr Aziz said there was a need to boost the IMF's regulatory powers and create a more powerful body.<BR/><BR/>"The world is becoming increasingly specialized," he said, adding that existing systemic threats beyond the agency's traditional monetary policy role must be addressed. "A robust regulatory regime must touch all the stakeholders," he said, with reference to the credit rating agencies that have come in for criticism amid the crisis.</I>Riaz Haqhttps://www.blogger.com/profile/00522781692886598586noreply@blogger.comtag:blogger.com,1999:blog-5848640164815342479.post-75456460014636340332008-09-19T08:17:00.000-07:002008-09-19T08:17:00.000-07:00thank you riaz for the informative and well balanc...thank you riaz for the informative and well balanced blog on shaukat aziz and his economic legacy. i am of the firm opinion, as you are, that shaukat aziz being maligned in our press and media was a result of underlying jealousy and politically motivated because he was part of the musharraf regime. its a shame when pakistanis refuse to actually learn and listen to facts before making their judgements. and unfortunately, we made our judgement on shaukat aziz MUCH to early. i think along with dr. ishrat hussain, salman shah, and ashfaque hassan khan, shaukat aziz managed to turn an almost defaulted economy into something more vibrant. the PPP governments ineptitude in handling daily economic procedures has compounded the problem we are facing. the C/A deficit has skyrocketed, our rupee is now at 77 to the dollar, and the stock market is at levels not seen for 7 years. i feel ashamed we can point fingers at him and musharraf for doing the job they did. the people will soon realize the reality of it all.Anonymousnoreply@blogger.com