Text of Prime Minister's speech at OICCI dinner

Following is the text of Prime Minister's speech at OICCI dinner on December 4."Bismillah-e-Rehman-ir-Rahim "Honourable Governor, Sindh, Dr Ishrat-ul-Ibad, Honourable Chief Minister, Sindh, Dr Arbab Ghulam Rahim, Mr Farooq Rahmatullah, President, Overseas Investors Chamber of Commerce and Industry. "Excellencies, Distinguished Guests Ladies and Gentlemen.
"It gives me immense pleasure to be in the midst of such august gathering of businessmen, both domestic and overseas. Let me, at the very outset, congratulate the Overseas Investors Chamber of Commerce and Industry for organising this event that provides an opportunity for interaction between the government and business community. The Overseas Chamber certainly plays an important role in promoting a positive and investor-friendly image of the country.
"LADIES AND GENTLEMEN: "We are all aware that a few years ago, when President Musharraf took charge, while many nations were making substantial progress, Pakistan lurched from one crisis to another, mainly of our own making. Weak macroeconomic management, lack of commitment, and courage to undertake difficult structural reform were typical of the quality of governance in Pakistan. Five years earlier, a host of threats were facing the nation, two of them being the most notable.
Firstly, there was economic stagnation, coupled by visible threats to the declining economy in the form of low growth, paltry investment, stagnant exports, shrinking volume of trade, dwindling revenues and rising public debt.
Resultantly, the incidence of poverty was on the rise and our credibility with our development partners had badly eroded. Secondly, the institutions of governance had lost their relevance in the context of providing justice, maintenance of law and order, and the provisioning of social services.
"LADIES AND GENTLEMEN: "It has always been my conviction that with Allah's blessings, the implementation of appropriate policies, unity of purpose, clarity of vision, and a dynamic leadership hand-in-hand with a people galvanised by self-belief and self-esteem, marching towards greatness in unison and harmony, Pakistan too can grow.
My vision for Pakistan is to see a highly developed, prosperous, modern and enlightened Islamic state--a Pakistan where poverty has been minimised, where our children attend outstanding schools as a matter of routine, where the genius of our people is fully harnessed because it finds the proper opportunities and channels for our advancement, where we have modern, thriving businesses and markets, a Pakistan which is populated with modern urban centres and dynamic rural communities, where Pakistanis can lead peaceful, productive, and fulfilling lives, free of harassment and hassle; a Pakistan that becomes a model for others to follow.
"I am grateful to Allah with whose blessings that dream is gradually becoming true. We are fast moving on that track. Pakistan is witnessing an extraordinary buoyancy in its economy. A higher-than-targeted growth in real GDP (6.4 percent) supported by stellar growth in large-scale manufacturing (18.1 percent) and a robust performance in services; a strong rebound in investment, particularly in private sector investment; relatively low inflation and an investment-friendly interest rate environment; an unprecedented increase in credit to the private sector; sharp increases in the consumption of electricity and gas, reflecting rising levels of economic activity; a reduction in the fiscal deficit (2.4 percent of GDP) above target collection of taxes; a buoyant stock market; a double-digit growth in exports and imports; workers' remittances maintaining their momentum with current account balance remaining in surplus for the third year in a row; FDI continues to exhibit rising trend; comfortable foreign exchange reserves position; a stable exchange rate environment; and a sharp decline in the public and external debt burden were some of the salient features of the economy in 2003-04.
Pre-payment of expensive external loan as well as a successful return to the international capital markets through the floatation of a Eurobond were other features of the economy in 2003-04.
"Fiscal year 2004-05 not only envisages to consolidate the gains made over the last five years but to further strengthen the foundation which will take the economy on a higher growth path in the medium-term.
Accordingly, the real GDP is targeted to grow by 6.6 percent with agriculture and large-scale manufacturing growing by 4.0 percent and 12 percent, respectively.
Inflation is targeted at 5.0 percent; budget deficit is projected to be 3.2 percent of GDP; exports and imports are targeted to grow by 9.1 percent and 20.7 percent, respectively.
"The current fiscal year has started on a strong note. Large-scale manufacturing grew by 14 percent in the first three months (July-September) of the current fiscal year; tax collection has surpassed the target for the first four months (July-October); both exports and imports are showing a higher double-digit growth; remittances and FDI are exhibiting rising trend; budget deficit is remaining below the target and both public and external debt burden is declining; and Standard & Poor's raising Pakistan's long-term sovereign credit ratings by one notch, to B+; inflation is, however, relatively high (9.1 percent) owing to demand side pressure on the one hand and supply side shock (rising food and fuel prices) on the other.
The Government is taking various anti-inflationary measures such as improving the supply situation of essential commodities (wheat, wheat flour etc) and tightening of monetary policy by the central bank.
These measures are beginning to show the results as rate of acceleration of prices has slowed. On the whole, the economy is progressing on sound footing and all the key targets for 2004-05 are likely to be achieved with a few exceptions.
"I am happy to inform you, Ladies and Gentlemen, that on December 1, 2004, the Executive Board of the IMF has completed the 9th and the final review of the Pakistan's 3-year PRGF arrangement. With the completion of this review, Pakistan was to get about $262 million from the IMF, but we decided not to draw this amount. By doing so, we have demonstrated that Pakistan's balance of payments is in comfortable position. We have also told the IMF that Pakistan does not need any other programme with the IMF.
This is a historic occasion for our country because after a long time and much sacrifice we have reached the stage where we will rely on domestic as well as on international capital markets to meet our financing needs for development projects complemented by continued support from the World Bank, the Asian Development Bank and bilateral donors.
Let me hasten to add, while this successful graduation gives us freedom to operate and make necessary investment for accelerated growth, we will continue to be fiscally and financially disciplined and will demonstrate much more sense of responsibility not to go off-track.
"LADIES AND GENTLEMEN: "We are looking for 7-8 percent growth rate within next three years and a per capita income of $1500 by the year 2015. I am mindful of the fact that achieving this kind of growth will be challenging, but it is eminently attainable. To accomplish this, we will need to excel in and achieve mastery over the entire value chain in our traditional fortes, like the textile industry and agriculture.
At the same time, we will need to graduate into higher value-added and fast growing sectors, like manufacturing, telecommunication, construction, energy, information technology, electronics, engineering, and bio-technology.
We will have to unleash the potential of our urban centres for growth and creativity. We will have to make a quantum leap in value-addition in agriculture and involve every village and hamlet in the development process.
"Our people have to be equipped with the technical and managerial skills to enable them to participate fully in the global economy. It is my firm belief that our people are our biggest resource and investment in their development will pay off many times over.
Our human development strategies, our initiatives in the industrial, agricultural, services, and natural resource sectors have been so designed to make Pakistan a regional economic powerhouse that is recognised as an economic lynchpin of the region.
We are aware that in the new world, trade and economic goals will shape a country's future. Our goal is to become the trade and manufacturing hub that connects North Asia, Central Asia, West Asia, South Asia, and the Middle East. We intend to exploit our unique geo-strategic potential fully for the welfare of our people and use this major economic and competitive advantage as a key driver of our economic growth.
"Pakistan offers a level playing field to all investors, whether domestic or foreign. We want its investors to participate and share in the higher economic growth scenario which is unfolding around us.
Pakistan needs to tap new investors from Far East and Middle East as well as from traditional OECD sources. We need to shift Foreign Direct Investment from catering for local market to FDI for exports.
"Increased exports will ensure our continued growth, job creation, as well as higher inflow of foreign exchange. Exciting opportunities exist for investment in manufacturing, engineering, electronics, IT, telecommunications, real estate development, construction, auto and appliances, tourism, and services.
"Ladies and Gentlemen: Let me now turn to national security. National security, Ladies and Gentlemen, is a complex mission that requires a co-ordinated and focused effort from our entire society--the federal, provincial, and local governments, the private sector, and the people of Pakistan.
It can be accomplished using every instrument of national power--economic, financial, diplomatic, law enforcement, military, information, intelligence, enlightened civil society, well developed human capital, speedy justice, and political stability.
Progress and development will come through persistent accumulation of successes--some seen, some unforeseen--in each of these areas.
"My vision about national security is based on 5C strategy. The tenets of this strategy are:
-- Consistent Economic Sovereignty
-- Credible Defence Capability
-- Continued Smooth Functioning of Political Process
-- Compatible governance structure ensuring speedy justice and improved service delivery
-- Conducive international environment friendlier to Pakistan
"The intent of our national security strategy is to secure Pakistan's national integrity, solidarity, its citizens, its interests, and to ensure accelerated economic growth to raise standards of living so that we can carry ourselves with national pride and dignity in the comity of nations.
Therefore, as we seek to engage globally we must ensure a strong web of national security across the spectrum of engagement to protect our citizens and interests both at home and abroad.
We need to move forward on all tenets of our strategy concurrently. Towards that end, I have already announced far-reaching reform in my address to the nation, especially in the areas of criminal justice and police systems. Before I end, let me congratulate the OICCI members who have provided the community support for health, education, culture and much more. You are important stakeholders for Pakistan and your responsibility includes community support and undertaking projects which create lasting impact and change Pakistan for the better. Keep up the good work and, for those who could or should do more, let me encourage you to do so.
"LADIES AND GENTLEMEN: To conclude, let me reiterate our Government's commitment and resolve to continue to move forward on a path of economic liberalisation that is compatible with our needs, public and private partnership, investment-friendly environment that provides confidence to both domestic and overseas investors, and good governance, both in the public and private sectors.
"In the end, let me thank the Chamber once again for inviting us to this occasion.
"Thank you
"Pakistan Zindabad"