Posted by: Administrator | 22 July, 2006

President at the Chicago Council on Foreign Relations, USA

Address by the President Pervez Musharraf at the Chicago Council on Foreign Relations Chicago, USA, on, Pakistan: Our Security and Economic Environment

September 10, 2002 

Mr. John W. Madigan, Chairman of the Council, Mr. Marshall M. Bouton, President, Chicago Council, Mr. Robert L. Barnett, Executive Vice President of Motorola Inc. Ladies and Gentlemen, it gives me great pleasure to address this distinguished audience. I would like to thank you for arranging this joint event. It brings together political thinkers and the leaders of industry and commerce, who figure increasingly and prominently in relations amongst states.

As a premier institution in the Mid-West, the Chicago Council helps reach out to the heartland of the US. It is a privilege to be in such distinguished company and to share some thoughts on, ‘Pakistan: Our Security and Economic Environment.’

Ladies and Gentlemen;


Peace and stability is essential for South Asia.  For fifty-four long years, Pakistan and India have remained mired in strife, which has denied our people, over one-fifth of humanity, a decent quality of life. This must end.  We must normalize relations. We must live in harmony, not acrimony. We must facilitate creation of synergies amongst our people and our nations. That is our vision. We must work for a South Asia of friendship and amity, cooperation and collaboration. We must forge economic and trade partnerships, which create prosperity and distribute rewards evenly. We believe in this future. We are firmly committed to this future.

I also believe that the path to this future lies inevitably and unavoidably through the resolution of all our differences and disputes through genuine, sustained and purpose-oriented dialogue, in a peaceful manner, on the basis of equality and equity and without any efforts to leverage power disparities.

The key to the normalization of relations between Pakistan and India is the core issue of Kashmir. The resolution of the Kashmir problem will unlock the door to normalization. The principle of self-determination and the means to achieve that goal are enshrined in the Resolutions of the United Nations on the Kashmir dispute. The repression of the Kashmiri people must stop. The solution must accord with the wishes of the Kashmiri people.

A sustained dialogue can propel us in that direction.  We are ready for this dialogue at any time, any place and any level.


Afghanistan and Central Asia

A peaceful and stable Afghanistan engaged in national reconstruction and in reintegration with the world is another imperative. Pakistan supports the Bonn Agreement. We support President Karzai and his Administration. Pakistan has offered full cooperation by opening up its markets to Afghanistan. We have earmarked US $ 100 million for reconstruction purposes over a period of five years of which US $ 18 million has already been disbursed.

In our assessment, the mandate of the International Security Assistance Force (ISAF) should be to promote peace and stability.

Afghanistan is the link to Central Asia.  The restoration of this link could create a whole new matrix of market forces, including trade, transport and communications, utilization of oil and gas reserves.  Economic synergy among the ECO countries could foster a huge zone of peace, partnership and prosperity.



A word on terrorism. Pakistan is against terrorism in all its forms and manifestations, wherever it occurs. We are part of the international coalition in the fight against terrorism. Our role and record speak for themselves. A number of Pakistanis lost their lives in the gruesome attack last year at the WTC. Our soldiers and policemen have given their lives in the fight against terrorism and terrorists.

I have also taken unprecedented and wide-ranging steps to curb extremism and religious intolerance at home.  I need not go into details here.  Our actions have not been without cost.

We are being targeted for the decisions taken by us to combat extremism. Terrorist incidents such as the killings in the Church in Islamabad, killing of foreigners and members of the Christian community in Karachi, Murree and Taxila illustrate this point. As I said we continue to lose precious lives in our efforts against terrorism. More than a dozen Pakistani security personnel sacrificed their lives in supporting the US effort against Al-Qaeda activists. But we are resolute. I shall not allow a fringe minority to hold us to ransom. We need your support and understanding in accomplishing this mission.



I know that scare scenarios of nuclear holocaust in South Asia have been painted of late. I have stated categorically that nuclear war is unthinkable. Nuclear weapons are not weapons of use. They are meant not to commit aggression but to deter aggression. Let me add that we are extremely conscious of the devastating consequences of the use of nuclear weapons for our own people and the people of South Asia in general.

Pakistan was not first to conduct nuclear explosions, and we shall not be the first to resume testing. Historically, Pakistan has had to react and respond in order to restore equilibrium in regions. We have offered to India a triad of peace, security and progress based on settlement of disputes, a strategic restraint regime for nuclear and conventional weapons and economic cooperation. Unfortunately, India has not responded positively to our proposals and seems intent, instead, on building a triad of nuclear weapon systems. Let me also assure you that Pakistan has established fail-safe safeguards and custodial controls on our nuclear assets. We have an impeccable record. In this context, Pakistan and the US have remained engaged in a high-level dialogue on security issues, particularly regarding restraints in South Asia.



Let me now turn to the key economic challenges we have faced since October 1999 and underline the policies that have been crafted and the economic opportunities they present.

From the very beginning, a core priority of my government has been the rescue and revival of Pakistan’s economy that had gone into a nose-dive following years of mismanagement and unbridled corruption. We, therefore, were determined to re-establish good governance and the rule of law, so as to restore the confidence of our citizens, of foreign investors and our development partners in the credibility of the government and its institutions. We then formulated a broad-based, private sector-led medium term programme to place the economy on the path of reform and growth.  Simultaneously, we have expanded the process of structural reform, de-regulation and privatisation with special focus on poverty alleviation and the social sector.

The country was saddled with a huge debt burden. Our foreign debt had reached US $ 38 billion through profligate borrowing with no income generating projects to show for it. We have been able to re-profile this debt with the support and understanding of the International Financial Institutions (IFIs) and friendly governments. As a result, we now have the resources for projects essential for economic development and the fiscal space to restructure the economy. For the first time, arrangements with the IMF were completed successfully and on schedule. A three-year Poverty Reduction and Growth Facility has been signed and programmes are proceeding apace.

A key feature of the government’s reform programme is that it is based upon consultations with all stake-holders. As a result :

The principal macro-economic indicators are in place.  Inflation is down to 3per cent this year from last years’ figure of 4.7 per cent.  The inflation rate had climbed to 10-13 per cent for most of the 90s.

Foreign exchange reserves have crossed the US $ 7.5 billion mark and are expected to reach US $ 8 billion by October.

The stock market in Pakistan has been amongst the star performers in the region.  During the last 18 months, the Karachi stock market has been the best performing market among the 14 leading markets in Asia, registering a return of 41 per cent.

Direct Foreign Investment has also registered some improvement. It gives me pleasure to state that the USA has emerged as our largest investment partner with a 41 per cent share in total direct foreign investment inflow of US $ 6 billion, over the last decade.

Pakistan is one of the most de-regulated economies in the region and has an impressive success rate for returns on investments. All sectors are open to foreign investment. Foreign investors are allowed to hold 100 per cent ownership. There are no restrictions on remittance of profits, dividends and repatriation of capital. Our investment policy provides a level playing field to foreign and domestic investors.

Large public sector developmental projects have been initiated, notably in the social sector and for infrastructure, with an out lay of 4 billion dollars.  These projects will be completed in the next 4-5 years.

I am also happy to note that OPIC, Exim Bank and TDA have resumed operations in Pakistan. So has the US AID. The Governments of Pakistan and the US have established Bilateral Economic Forums and Trade and Investment Groups. These forums provide further opportunity to the private sectors to forge long-term and mutually beneficial economic relationships.

Pakistan provides attractive opportunities for investment and has a well-qualified English speaking work-force to multiply dividends on such investment. We are taking difficult and far-reaching decisions to improve our law and order situation. We assure you of the Government’s commitment for the security of your investment and personnel in Pakistan. It is through our united efforts during such difficult times that we would be able to fight the scourge of terrorism. An economically strong Pakistan would be a more effective partner in fighting terrorism.



Pakistan and the US enjoy a tradition of close, cordial and cooperative relations. These relations stand renewed and re-invigorated in the post 9/11 environment. Both sides are committed to an enduring and mutually beneficial partnership. I believe that Pakistan-US relations serve the cause of peace and stability in our region.

I thank you


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