Shaukat Aziz: Government and Bussiness should not mix

Shaukat Aziz: Government and Bussiness should not mix

Former Prime Minister of Pakistan, Shaukat Aziz is known as one of the rare politicians to not mix ‘Government and business’ together. During his leadership, Mr. Aziz oversaw the successful privatization plan of Pakistan’s state assets. He led Pakistan when it was in near financial ruin but managed to steer the country towards unprecedented economic growth. He shares his views on the success of Pakistan during his tenure as Prime Minister from 2004 to 2007 with Interview of the Day host, Bilqis Bahari. Read the full interview here.

BILQIS: Hi, I’m Bilqis Bahari and you are watching Interview of the Day. My speaker in today’s episode is the former Prime Minister of Pakistan, Shaukat Aziz. During his leadership, Pakistan has seen tremendous economic progress including reduction of poverty and inflation rates.

BILQIS: It is great to have you in the program, Mr. Shaukat.

SHAUKAT: Thank you ma’am.

BILQIS: Let’s start with Pakistan-Kazakhstan relations. How would you describe the relationship between Pakistan and Kazakhstan?

SHAUKAT: The Pakistan relationship with Kazakhstan is a very important one. And it’s a very healthy and positive one. The reason is we share a lot of heritage. People came from Central Asia and to the southern parts of this continent and Pakistan obviously was a gateway. Secondly, we have a common faith, Islam which bonds the two countries together. Thirdly, we are both countries looking for economic growth and for improving the quality of the life of our people. And in Kazakhstan, for example, President Nazarbayev has been working on this objective and you can see the growth and development in this country under his leadership. Similarly in Pakistan too, we have come a long way in reducing poverty. We have improved our infrastructure. The growth rates are six to eight per cent a year and that for a country of 200 million plus people. You have to have growth to create a bigger economy and create jobs for them because when you have population growth in a large population like we do, job creation is a major responsibility of the Government. Also in history, if you go back between Kazakhstan and Pakistan, before Pakistan was even formed, people from this part of the world used to go down south towards Pakistan for trade, for other reasons. There was flow of goods and that was in some ways part of the Silk Route also. That Silk Route now manifests itself in the project called One Belt One Road, which China and Pakistan and many other countries are participating in. This will be a true game changer for the region and the world because connectivity gets societies together. Connectivity increases trade. Connectivity increases understanding and trust between countries. One Belt One Road is a great enabler for all these matters happening. It’s a win-win for all participants. Those who participate they’ll benefit. Their trade could go up, their connectivity would go up and it’s not just a road. One Belt One Road, while it’s called that, it could be a road, it could be air links, it could be sea links, it could be railway links. Most importantly in today’s world, digital links. The Internet is everywhere. You can see that once you get Internet connections, how people, societies, markets, businessmen, leaders communicate with each other.  It’s changed completely. So I think all these major changes in the world are relevant to the Pakistan Kazakhstan relationship and our own internal growth policies. Kazakhstan has a lot of potential. It has natural resources including hydrocarbons, oil etc. Pakistan has human resource, which is second to none. All these things can be put together to get more new ideas for growth between the two countries.

BILQIS: Speaking about the Belt and Road Initiative, that would also increase the trade between Kazakhstan and Pakistan?

SHAUKAT: Absolutely. You know anything anywhere where connectivity improves, trade starts. And traders going back and forth, seeing what product can we sell, where do we have profit margin, where we don’t. So I think the One Belt One Road is really an enabler for growth. It is up to us, the countries in the region, to exploit it and develop it. It’ll be creating a new opportunity for the people.

BILQIS: During your tenure as the Prime Minister of Pakistan, you oversaw the successful privatization of state-owned companies in the country. As you know Kazakhstan is also going through the same thing. How could Kazakhstan learn from Pakistan in this area?

SHAUKAT: I think each country is different, first of all. Kazakhstan today under President Nazarbayev has excellent leadership. So I’m sure if they do a privatization program, they will look at all the new answers and the details to do it in a way which is best interest of the country. When I came into Government, there was no privatization. There were some – one or two but not in a massive way. I strongly felt that it is not the business of Government to be in business. Government should be the enabler. Government should prepare the ecosystem for the economy to grow. Government should introduce structural reforms to improve and enhance and develop its operating ability of the economy. But they don’t have to manufacture everything. They don’t have to control every market. Let the market forces work. They should be having supervision. They should be having their eye on the ball so that things are under control. Any country which has done structural reforms of the economy in a good way has got the dividend from it. Pakistan is an example. We had for example all the banks in the state sector. We sold every bank except one. One we kept, which we listed. Even if you are not selling, although I prefer everything being sold and then you have a strong regulator whose watching it, but you can have one bank in the public sector, one or two. But they too, list them in the stock market. 50% can be Government, 50% can be private enterprise. The corporate culture must come into the public sector enterprises. The privatization has to be transparent. There should be no restriction. The asset still remains your asset. Your country’s asset. Even if foreigners own it, it doesn’t take away your control. Banking is a very controlled sector. The Central Bank is always looking at them no matter who owns the bank. So we shouldn’t worry. We got independent financial advisors and banks to handle the transaction. No control auctions, public. All the main auctions, we showed live on TV to the whole country. For example, I sold our state telephone company. Again, public open bidding. So I said let’s all this on the TV and everybody has to be prequalified before their bid. Why? Because you’re giving a major state asset to a private party. Local or foreign, we didn’t differentiate. And they have to be prequalified, prejudged by independent advisors. It has to be transparent. That being the case, we got the whole nation watching the sale of the telephone company. There were a lot of criticisms before it happenedWhen you privatized, you must have an independent regulatory authority overseeing that activity. We created Pakistan Telecommunications Authority, which was a Government entity, which was overseeing the industry, not operating the company. And then we opened it to private sector, more competition to it. So now we have five or six mobile providers and the connectivity, the increase in subscribers went through the roof because we introduce mobile phones. Private sector came in. They put in new exchanges, new numbers, competition, special packages. It’s a totally different environment. More jobs created for the people. We had one phone company, Pakistan Telecom. Now we have 10 and its been in hindsight a very good experience. But it has to be transparent, the sale of the assets. That’s why we got in the end no criticism. Even the unions were quiet.

BILQIS: When Government wants to do the privatization of state assets, do you think that it is probably a must for them to broadcast it nationwide?

SHAUKAT: Of course, they should. It has to be public. It has to be done through professional, international advisors. It has to be transparent. As I said, our telephone auction was on TV. Everybody then said ‘oh, we saw it. It was okay, you know,’ rather than rumors starting and all that. I think there is a way. Each country is different. I’m not saying what we did is the best way to do. There are maybe better ways. But I am a great believer in the value of privatization and I’m a great believer in opening it up. There’s no difference between local and foreign. That is also a myth. Nobody can put a telephone exchange in his briefcase and take it away to a foreign country. You know, it’s a system. It can’t leave. It has to be in the country to be operated. All these taboos will have to be broken and then you do what is in the best interest of the country. This is the way to go in my humble opinion.

BILQIS: Let’s talk about your experience as the former Prime Minister of Pakistan, what was your approach governing Pakistan?

SHAUKAT: Pakistan is a large country, 200 million plus people and surrounded by very many countries. We have Iran, we have Afghanistan, we have India, we have China and we have the Arabian Sea so we connect with the Middle East. If you come beyond Afghanistan, we have all our friendly countries here like where we are sitting today, Kazakhstan and all the other Stans. So Pakistan is a unique situation. I believe that for Pakistan, the future lies in continued reform. No country can ever say we have reformed totally. Reform has to go in every part of life. Not just privatization. How you run your Government, how you operate, the world is changing. Latest is digital age. You know, now you can sit in your home and send money transfer to anybody you want from your terminal. With all these influx of technology and the biggest revolution in the world in my view is the telephone. It’s no longer a phone only. It’s your data bank. It’s your message receiver, message giver, etc. I think we need to always see how science, technology, connectivity, digitization, how we can take advantage of it to help our people. That’s really what it’s all about.

BILQIS: You were a corporate professional working with Citibank in many countries before you return to Pakistan and entered politics. Do you think a leader of a country should be someone with a professional corporate experience?

SHAUKAT: It’s not essential, no. I think a leader for a country can be anybody, what the people elect. But it certainly helped me a lot because when I took over, the economy was in very serious state, not doing well. So I immediately focused on that. It took me a couple of years to revive the whole economy and we got growth as I said six to eight per cent a year in GDP. And poverty has reduced, jobs were created, people were feeling happier but there is also a change in reform. But no country is immune from reform whether it’s the United States, whether it’s Pakistan, whether it’s China, whether it’s any other. Everybody has to continue reforming, changing with the times. That’s what we have to do.

BILQIS: We’ve come to the end of our program. It’s a pleasure to have you in the program, Mr. Shaukat.

SHAUKAT: Thank you very much ma’am for this opportunity. It’s a pleasure to be in Kazakhstan and see the growth and development taking place here and President Nazarbayev and his team have obviously done a marvelous job in taking the country forward. I’m delighted to be here and I’m proud to be a friend of Kazakhstan.