Posted by: Administrator | 6 October, 2006

Dinner hosted by President in Davos for Participants of World Economic Forum

10 February 2006, Davos

President’s Address to the Participants of World Economic Forum in a dinner hosted by President Musharraf in Davos

First of all let me express my gratitude for doing me the honor and for doing Pakistan the honor for attending this dinner. Thank you very much for joining me at this dinner. In the opening remarks I would just like to tell you what we have achieved in Pakistan and what is the Pakistani environment from an investment point of view basically.

I know this forum this time is concentrating on India and China; yes indeed they are both neighbors. Let me tell you that I think Pakistan has a lot to offer and we have a resolve may I say to compete strongly in the region and internationally and tell the world that we have a lot to offer, we may have started very late but we can catch up we have the determination and the resolve to catch up and do well in the future.

Now I would like to give you some insight into what we have achieved and what direction we have taken. First of all we have followed a broad policy of liberalization, deregulation and privatization and we are going very strongly in that policy not only in words but in actions, we have created a very investor friendly environment in Pakistan through rules and regulations, through changes and regulations, through managing the bureaucracy better, this process is ongoing which we are improving with every passing day.

Now I am just wondering that what are the ingredients for business to flourish in Pakistan, obviously anyone would like to have an economically stable country to invest in. Let me say that Pakistan has come a long way in the last six years from 1999 onwards. This country is economically vibrant now and the economy is on a fast rate of growth.

There is an upsurge in the economy in fact if you see all the macro economic indicators; out GDP growth was 8.4 % which is no mean achievement. Last year it was 6.5%, this year we assure to attain 7% in sprite of the oil prices and in spite of the earthquake. If you all the indicators whether the broad indicators, lets see the debt to GDP ratio, we have reduced our debt but at the same time our GDP has grown so over all the debt to GDP ratio which was very unhealthy in the past is very health now, its 59% and I believe that European Union has a bench mark of 60% which they think is quite all right, so maybe we are doing better than EU and we are going to keep on improving. Other issue is our debt service liability which was a burden on the economy, we have reduced out debt service liability from being 64% of the budget to under 30% of the budget and we will keep improving it by reducing the debt and all we did in the Paris club, the debt rescheduling, the debt write-offs, this is what we have achieved then if we also look at other areas of what we have achieved within our budget locally, out revenue generation ahs gone up by 140% in last five years, out exports have risen by 110% in the last five years because of this our trade rating has gone up and the confidence of the international market has improved in Pakistan’s economy, manifestation of that is we floated Euro bonds and the Islamic bonds, the maximum involvement in these were these over subscribed to a large extent that shows the confidence of the International market in the economy of Pakistan so we are growing we are developing while previously we had a development budget of certain amount only 100 billion we have gone up by 300%, our development budget is now 300% more than what it was before in 1999 so mega development projects are going on and we are on the path of fast growth so this is what we have achieved, further manifestation in the Karachi Stock Exchange, today is the best performing stock exchange of the world where only today we reached the highest ever in the history of Pakistan.

When we took over in 1999 I remember the KSE index stood at about 940 or 950, today we have crossed 10,400 and indicators of financial experts say that it going to go above 12,000 so this is the economy of Pakistan and the macro indicators and we are now going down transferring this gain to the people of Pakistan through poverty alleviation, job creation etc.

Now the other thing which any investor will look at is the law and order, our perceptions are very poor abroad. Let me assure this honest gathering that the reality is not what you perceive from the media or from the travel advisories that you here and this is my very sincere view and not because I am trying to show your interest in Pakistan. We are unfortunate victims of poor perceptions, the reality is very different, law and order is quite stable, terrorism is controlled and it has never affected business in Pakistan in any case and it is not affecting it now also. Now I thought what an investor would look at in Pakistan, you look at the security of your capital as any investor would not like to invest in a country where his capital is not secure, we have about 600-700 2 foreign companies there in Pakistan and

I am very glad that some are sitting here, never had they been harmed even during the period where we were nationalizing in the seventies. No foreign company was touched and also when I came in and saw that there were some unfair deals but we are still maintain our commitment to every foreign investor so therefore security of capital is very much there.

The other issue is profitability, I see that there is a lot of profitability in Pakistan I think maybe more than most countries of the world. Most of the foreign investors are making profit of over 20%, maybe even up to 50% this is no mean achievement for them but we don’t grudge them for that. We do not them for it is a win-win situation for all and there is a reason why they are doing that and there is a reason that investors now coming in have the best opportunity because of the economic upsurge, there is a purchasing power of the individuals have been improved, the per capital income has increased from 460 to 465 dollars to 790 dollars, we are now in the middle income group.

So with all this purchasing power and with all this economic boom the demand has increased and the demand supply gap has increased manifold and therefore I say that investor today has a lot of profitability and availability of an environment to gain good profit. Now what does Pakistan has to offer in all this, first of all of our own market of 150 million rather 156 million and growing very fast.

They say that by 2020 we are going to pass 20o million, this is the kind of market available. More than that I say that look at Pakistan’s location, we have never sold our location, our location gives us strength, with the end of the Cold War and with the emergence of so many new countries, central Asian republics, Afghanistan all land locked, they are all looking for trade and commerce with the world because at the moment they are tagged down with Russia only.

The only way they can access to the world is through Pakistan which is the best way as they can go through Iran also but I think you know what is happening there so therefore Pakistan is the only logical choice for them which is the shortest and the best. Then look at the development in China, in the Western region of China, they are pumping in 120 billion dollars today to develop the west to access the world, from here if you compare if they go over land to east coast of China and reach no where in the world then they have to travel by sea is four times the distance from this area to the coast line of Pakistan and then the Gulf in our west and South Asia on our east including India and with the SAAFTA agreement coming up, Pakistan is sitting in the centre of all this so therefore all I call Pakistan as the trade and energy corridor of this whole region. No interaction is possible without Pakistan whether somebody wants oil and gas, it has to go through Pakistan. Whether India wants to trade with central Asia, China wants to trade with India it is only through Pakistan so therefore Pakistan’s significance geographically, Pakistan must be treated as a hub of this whole region. I haven’t spoken of Africa of course, Africa is also close to Pakistan’s coast, it should be taken as a stand alone country.

The other issue is of cheap labor, labor costs are very low in Pakistan and I am told that they are lower than in India and China, we have qualified manpower and one would say that literacy level is low irrespective of that we have one million people so maybe literacy level maybe low but the educated people who are intelligent, I can say that I can boost that our nation is intelligent, those who are educated are highly intelligent so therefore we have qualified manpower available in Pakistan for people to come in.

Lastly I said investor friendly environment, I think we have created such an investor friendly environment so I won’t go into much details but I will just enumerate a few like we have opened out all sectors for foreign investment and we are allowing 100% equity to everyone, the cost of business as I said is low and we are trying to bring it further low, there is a consistency of policies, out exchange rate is very stable for the last six years it is very stable so there is a predictability in your investment and then we are also facilitating creation of export promotion zones, we have created industrial zones, we have made a new port at Gwadar and we are giving special facilitation for investment in Gwadar and Gwadar sits at the mouth of the Gulf outside the strait of Hormos so anybody who is worried of the choking of the Hormos, well Gwadar offers an ideal opportunity to have refineries to have oil storage facilities, why should the oil tankers go into the Gulf why not collect from here, why is there a container terminal anywhere in the Gulf when this one is shorter. I was talking to shippers and I was told merely by the distance of Gwadar and going inside the Gulf, it means about 4- 500,000 dollars a trip for a ship which goes in and saving of that amount just because of the distance so this is what Gwadar port offers. S

So having said all this ladies and Gentlemen, the areas to invest which I would like to focus, mainly telecommunication is doing exceptionally well in Pakistan, Information technology is doing well and we need to do better because we have created an infrastructure which is comparable to any other country in the world.

As far 3 as internet connectivity, fiber optics connectivity, bandwidth cost which we have reduced from 86,000 dollars for 2 megabytes to 2400 dollars that is the kind of resources and kind of facilitation we have done and then agro based industry, we are an agrarian society and we say that we have the best fruit and the best vegetables of the world. We have the best mangoes of the world and we have the best citrus fruit of the world but we are not value adding. There is no food processing and fruit processing, we are the fifth largest milk producers in the world and that is our best kept secret I think, as no body knows that. I went to NewZeland and the people did not know that we produce any dairy, I am very grateful to Nestle which has come up and I know that they are establishing chiller plants and we want to go forward, we are not producing cheese, milk, butter, milk powder or yogurt we are only doing that but doing it only in a very small scale. There is a tremendous capacity to expand on this fisheries of course, building and construction infrastructure.

We have decided that by 2016 we are going to make five dams, three large dams and two are a little smaller but from an international point of view, those two dams are also large dams and then we are because of this rapid growth we are energy short, we want gas though we have gas so we are looking for energy whether is from Hydro which is the best and that is why we are going to these large dam because we want to produce hydro electricity in a big way because we have tremendous capacity, we are only producing 14% of our electricity from water whereas the capacity is at the moment about 2 and a half times of our total requirement of electricity today is available through water. We have biggest coal reserves; we want to generate electricity from coal and also gas and from alternate sources. In the end we are ideally located for refineries at Gwadar and elsewhere so these are broadly the areas where I thought I must highlight.

We army going in a big way for privatization, we privatized our banks, we privatized our telecommunications like PTCL, we privatized our refineries, we are now going on for selling Pakistan State Oil, Oil and Gas Development Cooperation, Steel Mill so this is all what we are doing so therefore I will end by saying that Pakistan has tremendous scope for investment for all points of view. I would urge you to come to Pakistan and see for your self and those who are there maybe will stand witness to whatever I am saying.

Thank you very much for the patient hearing everyone

Comment: When talking of South Asia particularly yes we have turned to this agreement referred as SAAFTA but may I admit here that because of the conflict tension between India and Pakistan, we haven’t been able to push the region up. Intra regional economic activity, commercial activity, trade activity is low because of the conflict between the two giant elephants in the region which we realize that so therefore we took deliberate action, I took deliberate actions to resolve everything and go for peace in a very strong way with sincerity, with flexibility and with courage because there are people who are against all this, one has to face this. Now how are we doing in that, we are going well on the CBMs, there is a two track approach but I don’t think we are doing to well on the conflict or dispute resolution. I am urging the leadership on the Indian side please lets move forward on dispute resolution specially the Kashmir dispute because I personally think that unless we resolve the Kashmir dispute, permanent peace cannot be guaranteed. I guarantee peace but what about permanent peace as no body here is permanent. leaderships will change new people will come, now what will be the attitude of these new people I don’t know so therefore we have to strive for peace. I only hope that India does realize that we need to establish permanent peace so that we can move forward. Having said that as far as we are concerned we are going in a big way with all countries with Bangladesh, with Sri lanka to reach free trade agreements and enhance our trade with them. Even with India we have moved forward on our trade and that’s what we are doing but I only hope that we resolve these disputes so that we go in a very open and bigger way to have this region developed and mutually economic rise.

Comment: I quote “the courage needed to confront is much lesser than the courage needed to compromise and reconcile” the courage needed to reconcile and compromise hurts egos and doesn’t come easy to a person, you need a much bigger courage and a much bigger heart to reconcile and We are prepared to show that.

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Responses

  1. You all are presenting the general as though he is some sorta Messiah. fact is that he wasnt even a brave general. When Bush tricked him that it would the the US ONLY three days to capture laden, he caved in instead of using his brain that even I, with no political background, can figure that out. Its HIS wrong doings that people have and continue to suffer. Over 8000 people have lost theirs lives so far in drone attacks, target killings, millions displaced. What does the General want now. To hand over Islamabad and the nukes. Is that why he is trying to come back.

    By the way why does he carry two poodles. Does he not know that there is no namaz and angel where there are dogs. But then again he wouldnt know what wazoo is would he. For that matter he wouldnt what namaz is. Ask him to read ayatalkursi, surah ikhlas, kaferron, falaq, etc.

  2. Dear Gazoo Martin,
    Sorry to point out, however, it is pretty evident from your anaylsis that you don’t understand military strategic planning nor could calculate National Interest and its protection. He was never tricked by Bush and no one ever talked about three days. Had Pakistan not stationed their armed forces on the NWFP border, god forbid these international agencies and their espionage missionaries would have succeeded in totally destabilizing PAK. He was visionary who did NOT allow the USA forces or blackwater to come inside PAK. Now under PPP you have no guarantees. Drone attacks increased by 1000 times under PPP regime. If you read President’s book or several of his interviews, you would know that he joined WoT in Pakistan’s interest and to counter the extremism that had grown since 1980s.

    “When you are talking about fighting terrorism or extremism, I’m not doing that for the US or Britain. I’m doing it for Pakistan,” he said. “It’s not a question of being a poodle. I’m nobody’s poodle. I have enough strength of my own to lead – President Musharraf”
    https://presidentmusharraf.wordpress.com/2007/03/15/im-not-george-bushs-poodle/

    “The United States seems to think that what our army cannot do, they can do. This is a very wrong perception. I challenge anybody to come into our mountains. They would regret that day,” President Musharraf said in an interview to Straits Times of Singapore in what seems to be an open dare by him.
    https://presidentmusharraf.wordpress.com/2007/03/10/musharraf-warns-usa/

    Read about the violence of 1990s, a sectarian menace growing in our society unchecked. Musharraf was th eone who banned several militant outfits.
    http://www.karachipage.com/news/sectDAWN.html

    PML-N Rana Sanaullah with banned militants. These are their supporters and funders. See the picture.

    Why he’s coming back, you ask????
    View grass root developments & deliverance that transformed the ordinary public’s life.
    https://presidentmusharraf.wordpress.com/2010/03/17/cherish-musharraf/


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