Ex-PM 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.

"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 happened.  When 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.

...... 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.