JEDDAH, 29 June 2004 — Pakistan Finance Minister Shaukat Aziz’s elevation as the country’s prime minister will have a “positive impact on the economy,” according to a visiting Pakistani financial expert.

“Shaukat Aziz commands a lot of respect from the business community in the country. He has been the person responsible for the turnaround in economy. So once he becomes the prime minister investment will get a boost, Karachi Stock Exchange Chairman Arif Habib told Arab News.

Arif, who during his current visit gave a presentation at the Islamic Development Bank and is conducting a roadshow on the Pakistan Strategic Allocation Fund on Thursday, said: “This is a very good development for Pakistan and its economy, particularly for promoting investment. Shaukat is, in fact, a technocrat and the business community in general desires that some technocrat should be the country’s prime minister.”

Arif asserted that the country’s financial policies would not change with the change of prime minister. “This is because policies have been framed under the rule of President General Pervez Musharraf and Shaukat has been a part of his team. Zafarullah Khan Jamali, who resigned as prime minister on Saturday pursued Musharraf’s policies. So there will be no change in the policies but their implementation may improve substantially.”

The national budget just announced by Shaukat shows “bold steps” that have been taken to promote investment, generate employment and reduce poverty. Duties on machineries have been reduced, sales tax on import of machineries has been withdrawn, and the rates of sales tax have been reduced. “All these will augur well for sales and exports,” Arif said.

“Yes, there were rumors before the latest development (Jamali’s resignation) that they were detrimental to the stock market. The market was down by 45 points in the afternoon session on Friday. It was because of the rumors that Jamali resigned,” Habib said, adding that nobody expected that Shaukat would be the ultimate choice for the post of prime minister, as he is not a member of the National Assembly.

Chaudhry Shujaat Hussain, the head of the ruling PML-Q Party, who was nominated to succeed Jamali, will remain the prime minister until Shaukat is elected.

Arif, who is also the chairman and chief executive of Arif Habib Securities Ltd., a corporate member of the Karachi, Lahore and Islamabad stock exchanges, strongly recommended to the IDB to help enhance the cooperation of financial markets among its member countries. “IDB should launch an Islamic mutual fund,” he said in his presentation at the IDB on the opening day of its two-day meeting on Sunday. The meeting focused on enhancing capacity of financial markets to promote intra-investment among IDB member countries. Arif’s presentation related to “Pakistan stock markets: recent performance and prospects for their integration with IDB member countries.

Arif, who was first elected as chairman of the KSE in 1992 and for five more terms, also recommended that the IDB should encourage a series of market development forums of its member countries to explore the scope and nature of development of member capital markets.

This should involve interest groups like representatives of sovereign government and agencies such as the finance ministry, Central Bank and Securities and Exchange Commission. It should also involve the stock exchange and securities markets, major listed companies with commercial interests in member countries, institutional investor groups with a focus on investment within IDB member countries, private sector representative groups such as local, national and regional chamber of commerce, and the legal and accounting professions.

He explained that Pakistan had been enabling the environment for international integration. Among the measures taken are that three companies have been listed on international stock exchanges and Pakistani law and listing regulations allow listing of foreign companies and investment in them by residents. Also, foreigners are allowed to own up to 100 percent of Pakistani companies. “Pakistan’s Finance Ministry, Central Bank and SEC are among the agencies that have the policy to encourage cross-border listing and investment,” he said.