Article
PART II
Pakistan is an agricultural country. Textile is traditionally its main industry, but in recent years, Pakistan has seen rapid development in energy and telecommunication sectors. Its GDP growth was steady at 7% under Musharraf’s reign. In 2005, Pakistan was ranked the third fastest growing economy in Asia after China and Singapore.
Q: Although you said you are not an expert in economy, when you were the President of Pakistan, you were able to grow the country’s economy at a steady rate, and only from a military background, how are you able to achieve that?
R: Yes. I realized that the economists sometimes use jargon to confuse others, when I used to ask them what is the problem? At the beginning I didn’t know anything about economics, I never bothered to learn. But then I realized that it is your expenditure verses your earning. This is it.
Q: This is that simple?
R: You just find out, make sure that your earnings are very close to your expenditures, don’t match them, because your have to borrow to develop fast. If it just match you will only, own that much and spend that much, you will develop very slowly. So you have to borrow money. So your expenditures will always remain higher than your earnings and that is no problem and there is the formula for that, this is the debt to GDP ratio which should not exceed 60%, that is the common rule. If you have 100 in your pocket, you owe 110, it is not good. But if you have 100 and you owe only 30, 40, 50, that’s okay. So it is just a matter of expenditure, in local currency and in foreign currency. I went into more details, the revenue you earn in local currency, you generate and we will spend. We spend the earnings on the government establishment, that is the maximum, and then we will run on the Defense and also the subsidies to the various government departments which we run at a loss. So I tried to improve the expenditure and increase the earning to revenue, so revenue got increased by 300% in 6 years, and the expenditures were brought down, so we were happy and we could devote much more money, we could devote about 6 times, 600% more on development, because of this change. On the foreign currency side, I asked where is the expenditure? Where did you spend on? We were spending on the services, because our taxes were high, we were spending on imports, you can’t reduce imports, your factories are running, and mainly these were the two areas in which we were spending and where we earned from increasing exports and investment. So we multiplied the input about 5 times I think, more than 5 times, 500% increase in these years, and we checked the expenditure through doing away with heavy interest rates, and also reduce the debt liability. So we managed it again, from 5 billion dollars deficit, we went to 2 billion dollars surplus in 2004. So anyway it was a long answer, to control expenditure and earnings and that will bring about all the changes in the macro-economic picture.
Q: That is General Musharraf’s simple philosophy on economics.
R: Yes.
The South Asian Association for Regional Cooperation (SAARC) is an economic and political organization comprised of eight countries in South Asia. SAARC has made significant progress in integrating with the rest of the world; however, intra-regional trade remains very low due to the continued conflict between India and Pakistan.
Q: There are people saying that the free trade zone in South Asia would have little meaning if Pakistan and India do not participate in or get involved in it whole-heatedly? Do you agree?
R: Yes, I agree. I agree because SAARC is the only organization representing South Asia from the beginning. It was quite important as an organization only because of the Indian-Pakistan conflicts because these are two big countries in the region. As one leader in South Asia remarked, when two elephants fight, the grass gets stampeded, so that was the problem and it still remains the problem. Unless Pakistan and India resolve their disputes, and the part of the whole economic activity in this South Asian region, nothing much can be done.
Q: you also mentioned the well being of the people in the region is the biggest challenge faced all these countries in South Asia. How will Pakistan be benefited it if he participates more actively in the free trade zone?
R: Pakistan will benefit certainly, but at the same time I would say that there are certain areas in Pakistan industry was fledgling, it would be then coming up. In the past seven years, we industrialized and we were encouraging local industries coming up into Pakistan. One has to guard its own interest. We can not allow that kind of free economic activities, a free trade zone, where your own industry starts suffering, that I am sure no other country will allow that.
Q: But is that still the main concern, the fledgling domestic industries?
R: Yes. It always remains the concern. You don’t want to get this country to just an agricultural country. I think it is the goal for any country to develop and for the well-being progress of the people, you need jobs, and where do the good jobs come from? You have an industry functioning but get unemployed. If it is not the case, certainly, we will suffer, we will go back. If the industries are only importing goods, we are only basing on agriculture whatever we have. That is not a wise thing to do. So I said it shouldn’t be taken in any agreement. We will support, obviously, we will be a part of that. But we will make sure that our interests are guarded. India also does that. They are giving us more MFN status, most-favored-nation status, but impose such heavy duties on our textiles. Why? They are guarding their own textile. So this happens with everyone.
PART III
China and Pakistan have had a lasting and comprehensive relationship. In 1950 Pakistan was the first Muslim country to recognize China. One year later, Beijing and Karachi established diplomatic relations. In the 1960s, the two countries reached their first formal trade agreement. In 1971, a Pakistani flight taking off from Islamabad brought US National Security Adviser Henry Kissinger to China starting his secret but historical visit in China. Chinese President Hu Jintao described Pakistan as a“good neighbour, good friend and good brother”. Pakistan’s President Asif Ali Zardari countered during his visit to China this year saying the Pakistan-China friendship is higher than the peaks of Himalayas.
Q: What is your outlook for Sino/Pakistan relationship?
R: My outlook has always been very positive.
Q: We are neighbors.
R: Yes. We are neighbors and I always believed that we should get more integrated. I have always proposed that we are linked by a road along the mountains, the KKH, which is a symbol which people say it is the eighth wonder of the world. But I used to tell to President Hu Jintao that we needed to create the ninth or the tenth wonder of the world. Let’s put a railway line through, and let’s put an oil and gas pipeline through coming from the Gulf, from ports or from anywhere, going on to China. That will be the integration of the two countries really.
Q: You have told us some of the projects that your vision for Sino-Pakistan collaborating in the future. How many of those are really feasible at this moment?
R: They are feasible. If it was not feasible, somebody said me you can’t take a railway through such a high place but you took it to Tibet. I am really admirable about that, which goes on this thermal frost region, and more than half of that area is thermal frost. And nothing was blocked on this route. So I am very sure that it is possible. When we talk of the oil and gas pipeline, I also spoke to some experts and they said yes, taking it upwards but when you enter our border, it is downward, this is all the advantage.
Q: You have all these wonderful projects in mind. If you are asked to prioritize them, how would you say? Which project? It is the railway or is it the gas pipeline?
R: I would say the railway because I think the railway will integrate the whole region. Because if it takes a railway from Pakistan to Northern China, then Kazakhstan, Kyrgyzstan, Tajikistan, all can link up with this. They are all land locked. They are looking for reaching the sea. Even China, look at the route to the Gulf, you go from the Gulf, link Gulf, you go all around India, and then go to the Malacca strait and then come to your eastern coast. Here look at the distance, I have never measured this, but I think it is very less, from Guada port which we built together. Let’s realize the full potential of this port, then for this whole region to be integrated. It would be a win-win for everyone. When I said this in Central Asian Republic and to its President, they were excited that we must to it! So I think China is the main country which can make it reality and I still believe that it can be done and that it should be done.
Q: Last question, you said when you were leader that you felt lonely. What about life now? What is your life now? How do you feel now?
M: Oh, I feel very easy. I have a lot of time. I never came to China for more than 3 or 4 days because it was just job and then back. Now I come here for eleven days. I’m relaxed.
Q: Are you happy?
R: Yes, I am happy.
Q: Thank you very much for staying with us.
R: Thank you.
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