ALGIERS, Oct 23 (NNI):
Pakistan Tuesday urged the Muslim Ummah to actively contribute in
rehabilitation and reconstruction of Afghanistan, which includes
improvement in infrastructure, water resources for agriculture, health,
education and poverty reduction to create hope and trust for a peaceful
and prosperous future of the people of Afghanistan.
Addressing the 26th annual meeting of the Board of Governors of
Islamic Development Bank here, Pakistan’s Finance Minister Shaukat Aziz
said that the meeting was being held at a time when the Muslim Ummah was
passing through an unprecedented period. The events of September 11 have
undoubtedly changed the course of the history. They have also confronted
the Islamic world with major challenges for its well-being.
"We must prepare ourselves to face these challenges and come out of our
current predicament more united, stronger and responsible part of the
world community," The Finance Minister said.
Shaukat Aziz said it is too early to judge the shape of the new world, but
as is true of any significant change, challenges and opportunities are
clearly visible. Thus while facing the challenges we must work on the
opportunities brought about the post September 11 world. For this purpose,
he said: "We have to understand our weaknesses, vulnerabilities as much as
identify our strengths and defenses. While improving our strengths, we
must also overcome weaknesses."
Shaukat Aziz urged the Islamic Development Bank to commence reconstruction
planning efforts and mobilize other development institutions and bilateral
donors. He thanked IDB for its major contribution in development
cooperation as a premier financial institution of the Muslim World.
He said in the past its total operations showed an increase of 42% during
1420 H as compared to 1419 H. The enhancement covered both ordinary
operations as well as trade financing operations, including project
financing and technical assistance, which is indeed very commendable.
He said efforts of the IDB to enlarge its scope of activities need a
special mention. The Bank has proposed to enhance its authorized capital
from ID 7 bilion to ID 15 billion. Supporting the proposal, he said it
will long a long way in expanding the scope of Bank’s operations, which is
Turning to the main issue of poverty, the Finance Minister said that it is
a formidable challgne, yet it has to be faced. There are two aspects of
this problem that must be kept in view. First, growth is essential for
poverty recduction, for without an expanded ple, there would not be much
to be shared. As such the primary condition for attacking poverty is to
enable the Islamic countries to exploit their potential to the maximum.
Second, in the presence of high debt burdens presently carried by the
Islamic countries, the growth and a common effort to secure significant
relief from debt burden and redirect the resources so released to poverty
reduction programs. It is only through such efforts that a meaningful
change in the poverty profile can be effected in the developing countries.
He urged the IDB to assume the leadership role in the process of helping
the Muslim countries to acquire economic independence. There are numerous
areas of cooperation that remain unexplored among the Islamic countries.
The level of trade, both visible and invisible, remains low. At a time
where customs unions and trade blocks are a fashion the world over,
Islamic countries have yet to evolve an arrangement that would foster
trade and commerce among them.
"Our common financial resources are largely dissipated, doing little to
expand economic cooperation or encourage economic growth with the Islamic
block. We have a common destiny, and it is our obligation to harness
resources for the common good of the Ummah. We should, therefore, not shy
away from exploring the cooperative arrangement that have proved effective
in increasing the welfare of their members," he added.
To this end, he said apart from expanding the role of the Bank to act as a
catalyst – for which its resources will have to be augmented by the
members countries – we will have to break new grounds in developing
institutions for promoting greater economic cooperation within the Islamic
He urged the Bank authorities and member countries to think about
developing proposals for such cooperative arrangements. At the same time,
and with a view to enabling it to play a more effective role in the
economies of member countries, he strongly urged the bank to examine the
possibility of engaging in policy lending. A reformist stance from the
Bank would greatly facilitate the economies of member countries without
accumulating the kind of debt burdens they have acquired while working
with the IFIs.
The Finance Minister said that there is also a need for cooperation among
the member countries in the areas of financial sector reforms and the
regulatory framework for capital flows. Many of the member countries are
confronted with the problem of capital mobility and the associated loss of
He apprised the meeting on the major efforts that the government of
Pakistan has expended in reviving the economy and establishing its
credibility in the international markets. He said Pakistan’s economic
programme has been integrated with human development and improved
governance, with an overriding objective of poverty reduction.
Although growth was affected due to unprecedented drought, the overall
performance of the economy was quite satisfactory. Exports, revenues,
current account balance and fiscal deficit – the key indicators of a
stable macroeconomic framework – displayed positive trends, he said.
Owing to this performance, for the first time in its history, Pakistan
successfully concluded a fairly tough adjustment programme of the IMF. "We
are buidling on this reform to secure a growth oriented medium term
facility from the Fund and a commensurate support from Paris Club and
other multilateral agencies," he added. –NNI