PARIS, June 19: Pakistan’s Finance Minister Shaukat Aziz, in an interview to French national daily Le Figaro, published on Thursday, says that although Islamabad “was practically in a state of default in payment following its nuclear tests in 1998, today we have restored our international credibility.”

Mr Aziz, described by Le Figaro’s economic specialist Stephane Marchand as “a banker who seems to have stepped straight out of Wall Street, indeed his previous post was with Citibank,” noted that part of the reason why he was able to reduce Pakistan’s budgetary deficit from 7 per cent in 1999 to 4.6 per cent today, is in part the doing of the International Monetary Fund, “which has obliged us to follow a (strict) adjustment programme,” although, he stresses, “this will be the last time we do so.”

Having also reduced debt service for Pakistan from 60 per cent of export revenues in 1999 to 40 per cent today, Mr Aziz noted that if he were proud of one thing it was having “brought transparency to the financial functioning of the country. Whereas four years ago, the letter of intent of the IMF was a state secret locked up in a safe, today anybody can read it on the Internet website of the finance ministry.”

Also largely responsible for Pakistan’s ability to rebound spectacularly since 1999, says Mr Aziz, is what he characterises as the “September 11 effect,” which saw Islamabad “rewarded” for its participation in the United States war against the Taliban with a loan of $600 million, to which have been added another $300 million from the European Union, Saudi Arabia and Japan. Then too, this has brought about in turn a decision by the Paris Club to authorize the rescheduling of Pakistan’s $12.1 billion debt over a thirty-eight year period.

Another reason for Pakistan’s financial rebound, according to Mr Marchand, is the country’s decision to ban the “hawala,” and this apparently at the behest of the United States which viewed in the traditional means of financial exchange one of the principal methods used by terrorists to finance their activities outside of the international legal system.

With regard to its international exchanges, Pakistan could do even better, notes Mr Marchand, who points to Islamabad’s inability to export more than 15.4 per cent of its GDP, and this largely because of, in his words, “an insufficiently diversified industrial capacity” that results in Pakistan’s depending for 66 per cent of its exports on three categories of products: textiles, leather goods and rice.