ISLAMABAD, 23 August 2004 — Is Pakistan entering a new financial and business world?
The answer is: Yes. The air is thick with this ambience and huge business expectations, both domestically and internationally. Never in the 57-history of Pakistan such high hopes were pinned on a single person. He is Shaukat Aziz, Pakistan’s internationally acknowledged and dynamic finance minister who takes over as prime minister this week.
Aziz, 54, a former Citibanker who was going to be its global head, survived an alleged Al-Qaeda suicide bomb attack during his recent election campaign. As a highly pro-business prime minister, he now will have to face the political sharks, mainly feudal landlords, standing always just for their own narrow interests. It may not be a classical business-versus-agriculture sector fight that can be in store, but Aziz vows to preserve business, industry, banking, financial markets and all the elements necessary to hasten the nation’s growth into a modern state quickly.
The business already has pledged to stand by him. The day he was elected to the National Assembly to constitutionally qualify him to be the prime minister, the business shot up all over. The day of the vote, Karachi Stock Exchange’s benchmark KSE-100 gained 40 points, breached the psychological barrier of 5,400 and raced up to 5,418 points. The day’s turnover rose to 274.184 million shares, up from 225.802 million, the previous day. The aggregate market capitalization rose to Rs.1,459.92 billion — up from the previous day’s Rs.1,450.19 billion. Banks, cement, oil exploration and oil marketing shares were active.
The second pro-business development that helped this thrust was that the central bank, State Bank of Pakistan (SBP) raised benchmark six-month Treasury Bills (TBs) yield by nine basis points to 2.6164 percent on the election day. It boosted hopes that excess liquidity will move into the stock market.
Aziz’s election will bring in greater political and economic stability, improve the investment climate and generate larger job opportunities. This is the common reaction, both by politicians and businessmen, over his success. KSE Chairman Arif Habib extended Aziz “full support of the bourse “in achieving his aim of securing a place for Pakistan among the developed nations of the world.” Riaz Tata, president of Federation of Pakistan Chambers of Commerce & Industry (FPCC&I) said under Aziz’s premiership “Pakistan now is all set to join the list of economically developed countries of Asia.”
Soon after his election, Aziz pledged what will please the hearts of business, industry, the country’s foreign trade partners, international financial institutions and FDI fund managers. As prime minister, he said, he will further “accelerate efforts toward the ongoing economic agenda, for the socio- economic development, that has led to the stability of the economy. All out efforts will be made to change the life of the common man and put the country’s economy on the right track.”
In spite of his capacity to swing the economy around further, as his credentials for the last four years as finance minister confirm, the new premier has to work harder still for the sake of this nation of 159.2 million people. He has to check the growing number of those living on a dollar-a-day, and create more jobs. The economy generated 1.5 million jobs in 2004. There are plans to create another one million in fiscal 2005. He hopes, it is achievable through a faster GDP growth. The growth target for 2005 is 6.6 percent, up from 6.4 percent in the just-ended 2004. He is fine-tuning his plans to gear up growth to 8.0 percent within two years.
Other business, industry and financial indicators are healthy, too. The growth of industrial production, for instance, between 1989 and 2004, rose from 2.4 to 17.1 percent, FDA from $210 million to $1.0 billion, exports from $4.7 to $12.3 billion, and imports from $7 billion to $15.5 billion.
The Karachi Stock Market KSE-100 index rose from a low of 1,257 points on Oct. 12, 1999 to 5,418 after Aziz’s election.
The biggest plum goes, once again, to overseas Pakistanis whose remittances from the Gulf and North America, rose from $1.9 billion in 1989 to $3.9 billion in 2004.