The Hindu Business Line : `Pakistan is on strong fundamentals' — Mr Altaf M. Saleem, CEO, former Privatisation Minister

When the Pakistan President, Gen. Pervez Musharraf, was forming his Cabinet in 1999-end, one of the men he zeroed in for the post of Privatisation Minister was the CEO of Crescent Industries, Mr Altaf M. Saleem. "I had never met him and took on the post as public service," Mr Saleem told Business Line in an interview in Karachi. He found the General a great boss to work with and one who worked hard to understand economics. "During three years, not once did he call with a sifarish," says the man who worked gratis, taking even his laundry back home to Lahore from Islamabad each weekend. With an impeccable reputation for integrity, he has taken a six months moratorium between leaving the Government and rejoining his business.

Excerpts from the interview:

How do you read the Indo-Pak initiative? Are you hopeful?

I am very hopeful that something will happen. But, again, the vision has to be such that there is more trust between the two countries. This timearound we have had vibes from the Indian side which are...

Positive?

Not only positive... in the last several years, our President had sent many positive signals, but unfortunately there was negative responses. We in Pakistan feel there are two schools of thought in India; the Prime Minister who wants peace, and an invisible entity who feels totally different. So, naturally, there is a little bit of dampening of hopes. It is always good to be upfront and have one viewpoint. My view is that when Gen. Musharraf went to Agra, he was very upfront and open. During his meet with the editors, he openly said there is no reason to say there is no core issue. He said do not ask me; go to any Indian city and ask what is the core issue and you will be get the answer. And without addressing that issue it is very difficult to resolve our differences. It could be a matter of timing, sequences and the like but the fundamental issue is Kashmir. There may be two points of view on it, but there should be an agreement that there is an issue which has to be addressed.

Do you see any significance in the timing? Why now?

I feel that Mr. Vajpayee always had an inclination. Going by what we read and hear, our assessment is that he is a person who wants peace. Naturally when you are in a political set-up...

You are positive. But, ultimately, what can be the solution? How do you see a solution?

The solution, I am very positive, will be found if we agree there is an issue and we have to talk about it, without saying who is right and who is wrong. But if you say there is no issue...

But both sides are sticking to their stated positions...

Both sides should talk with an open mind and decide that the issue should be resolved on the basis of justice and fair play and not one's ego or any stated position. One has to get into any negotiation with an open mind and address the issue. We have to look at the two populations and their future. Are they doomed forever to live below the poverty line? One in every three person in India, Pakistan, Bangladesh — in fact, it is more in Bangladesh — lives below the poverty line. Are they to live like that forever? It is our duty to do everything to help them.

I see a huge admiration for President Musharraf; everybody says he saved the nation. You were a minister in his Cabinet. How did you find him and how did he select you?

In our countries, either you are a politician in a party and get elected or you have some kind of pull to get into the government. President Musharraf did not know me at all... or our Finance or Commerce Ministers (Messrs Shaukat Aziz and Razak Dawood). We were all strangers. Somehow, they did their due diligence, went to people and, according to their own judgment, tried to pick up the right people.

You had no political background at all...

None of the economic ministers had a political background. When he invited us and asked us to work with him, all three of us gave up our jobs and worked gratis. We left our families; the Finance Miniaster's family was living at that time in New York, his children were studying there. The Commerce Minister's family was in Lahore I had a family and young children in Lahore. We left our own homes, went to Islamabad, lived as bachelors for three years in our own accommodation and tried to do whatever we thought was good for Pakistan. And, initially, Gen. Musharraf spent over one-third of his time with the economic ministries to set things right.

So he understood economics...

He spent so much time to understand economics. And now he has all the figures on his fingertips. He knows what questions to ask. It is amazing how he has transformed... Normally a soldier and economics are poles apart... But now he understands. In the first 18 months he made a lot of effort.

And how was he as a boss or team leader?

I found him to be a very straight-forward person... He never minced words, never spoke something which might be politically correct, but otherwise incorrect. He always said what he thought was right, irrespective of what others might think. I admired him for his straightforwardness. Throughout my life I have never had a boss, I have always been my boss most of the time. So he was my first boss and I think he was an ideal boss.

So he gave you freedom to work...

Total freedom and no sifarish (recommendation), no phone calls to do this or that.

Really? That is difficult in the economic ministries.

Not a single phone call...

And it was a mess that you people inherited in 1999.

It was and Gen. Musharraf always said, `I will not take popular decisions; I will take correct decisions'. So for taking 'correct' decisions we had to increase the price of gas, we had a lot of subsidies which were not going to the poor but the rich, and the rich were always saying that if you withdraw these subsidies, the poor would be hurt. Gen. Musharraf understood this, agreed with us and we embarked on a plan. Every six months we were increasing prices and bringing them closer to the market. It was the same with electricity and petroleum products and after three years you are seeing the results. Our lending rates, which were between 18 per cent and 20 per cent for businesses, are now down.

To 10-12 per cent...

Twelve is the highest! Good clients can borrow from the money market at 3-5 per cent.

I see an economic resurgence and confidence which was not there in the last several years?

The stock market index (KSE) when he came to power was 900 and sliding towards 600. Now it is moving towards 3000, and on strong fundamentals. Our (forex) reserves are very good and have crossed $10 billion. Many people think our reserves are good due to 9/11. But when Gen. Musharraf came to power, they were $600 million and before 9/11, we were already touching $5billion. The credit for the next $5 billion, even if it does not go to us, that for the first 5 billion should! So I think a lot of good things happened. In public sector corporations, Rs 10,000 crore a year was being lost. On the privatisation front, Gen. Musharraf gave me very good support and even fully committed the legal framework. We have now left a pipeline full of transactions for the new government. For the first two years, we were unable to complete the transactions because there was nothing in the pipeline.

So you did not manage to divest much...

No, no, I did. Close to a billion dollars. But, now, there is no stopping. Even when I left and the new minister was not in place, still the (Privatisation) Commission was functioning and transactions taking place.

How come they did not persuade you to stay back?

I never thought of changing my career. This was a public service I did, and that can be only for a limited period. And I had my own businesses to look after. For three years in Islamabad, every week I brought my laundry back to Lahore... I had that kind of set up. I never put my heart into Islamabad in terms of staying on there.

How confident are you that Pakistan is on the road to a healthy economy and will stay on track?

I am very confident because there is nothing superficial. Everything Gen. Musharraf did was on strong fundamentals and basic principles that we are getting out of subsidies, moving away from rent-seekers, and trying to target the development towards poverty alleviation, smaller government, and the like.

But the politicians are back!

Well, whatever we think or say about politicians, when we believe in a democracy, then politicians will have to run the country.

And Gen. Musharraf is keeping a watch.

The best watch is that if we have done something good and the public knows and appreciates that, then they will put pressure on the elected representatives to continue.

So you believe corruption levels have come down...

Corruption levels are definitely down, and even small businesses have started feeling confident, consumer product prices are coming down, funding is available for cars. Today's newspapers carry ads of five AC manufacturers reducing prices drastically. So I am very hopeful.

And once we sort out our differences, better times lie ahead?

Oh yes, both the countries have to see there is a big market for each other. If we can resolve our differences, it would be great for someone to pick up a car on a weekend and drive to Amritsar... like people drive in Europe.

How do you see the future and what role do you see Gen. Musharraf playing in it?

I think he has a role in the future. In the last three years, he has given a lot of stability to the government. In the past, many people came to power on slogans. And they tried to fool the people and anyway slogans have a short life. But Gen. Musharraf had no flashy slogan. And he always said it is very tough, it is a very hard road and a rough ride, but I will put the direction right and, ultimately, we will reach the destination. And I think he needs to be there for some more time as we need continuity. If you talk to people individually, everybody says the policies should continue. They are good but still the real benefits have not yet trickled down to the people. It takes time and people are impatient, but gradually they will see the results. The first step was stabilisation, now it is development and with development money will go to the people; there will be more job opportunities. From the next budget onwards, we will see this. Public sector spending will go up and when this happens, people will benefit. Even though we had the money, we could not spend a lot of it on public sector development because the capacity to absorb that money was not there. We were addressing the corruption issue, we did not want this money to be siphoned off. We have saved the money and have the right system now... Of course, it can be improved. When this money is released to the people, there will be results. For the first time, our exports will be crossing $10 billion. We have never crossed this figure. We had a jinx... and always fell short, sometimes it was $9.5 billion or $9.8 billion. My own estimate is that next year there will be a 20 per cent increase.

Which are the major areas of export?

Predominantly, we are a textile economy and 65 per cent of our exports are always textiles. Our crops have become very market based and the manufacture is confident that if there is a crop shortage in Pakistan, he can import or if there is a surplus he can export. So people are expanding capacity. Previously, we were very unsure. There were lots of ups and downs. But having moved into a market economy, these things have all stabilised. Earlier, oil prices were controlled, always increased but they never came down. But now they are linked to the international prices and are revised every 15 days, upward or downward. The new Government has stood by all this. Unfortunately, for it, three or four times in a row they had to increase prices... A very hard decision for a new government. But I give credit to them that they did it. Now people realise that they have to pay. Gradually, such things will take root and we will see better days ahead.

Response can be sent to rasheeda@thehindu.co.in

Article E-Mail :: Comment :: Syndication

Stories in this Section
Music off air

Pakistan — a US garrison?

Vultures' feast

Indonext: The RSEs' last battle?

Delisting from RSEs and CLA — Why are bourses raising roadblocks?

`Pakistan is on strong fundamentals' — Mr Altaf M. Saleem, CEO, former Privatisation Minister

Fiscal policy commission