Will it be a change or will it be more of the same, is the frequent question asked by people with Shaukat Aziz as Prime Minister of Pakistan? He has taken over at a time when critical decisions are to be made in a changing political environment which has thrown up a technocrat as a prime minister.

But the positive side to to picture is that it is economics that is driving politics. Here his track record offers hope for the future. His appointment is a positive signal to local and foreign businesses. The message that economic reforms will continue, is loud and clear.

The business community has rallied round him with renewed confidence. But concerns about political stability and security have still not gone away completely. A big cabinet is a political enigma.

Enormous challenges face Shaukat Aziz. He has to provide guidelines for the next five-year plan, now being formulated and to be launched from next fiscal. He is a banker and not an economist but has rich experience of managing the national economy successfully for past five years.

He has pledged to create a welfare state in an emerging market as distinct from egalitarian role models based traditionally on mixed economies. It is no easy task either. And the sensitive issues related to National Finance Commission and the construction of major water reservoirs which has defied solution for so long, have to be resolved.

With fire-fighting on the external sector over, Pakistan needs a development strategy to sustain a high economic growth with low inflation and job creation. The Prime Minister is also expected to steer the second generation of reforms, the toughest of them all being improved governance, making the bureaucratic machine work far more efficiently.

Shaukat Aziz has taken over at a time when the economic reforms have strengthened the emerging market that is shaping what may loosely be described as market democracy. Democracy is a generic word and has many versions despite universal democratic values.

A corporate citizen and a technocrat has been nominated by President Musharaff and elected by the parliament to become chief executive of " Pakistan Incorporated", two-words that capture the vision of the head of the Planning Commission.

Like the new chief executive of a business corporation, the old cabinet with additions, has a new Prime Minister. A big cabinet would not be so easy to handle, particularly when the members feel that they have moved to the top on the basis of their group strength.

Both India and Pakistan have technocrats as prime ministers. Mr Manmohan Singh is required to work under a mandate (programme and policies) given by the ruling coalition party. Mr Shaukat Aziz would have to build a consensus among stakeholders that he represents through compromises. He would have to be more receptive to the demands of the domestic constituency.

The success of the prime minister will depend on how he tackles the emerging challenges of a growing economy. A sustained growth that generates employment and targets inflation below the running GDP rate.

A trade deficit rising on volatility of the international markets and demands of a fast growing economy that becomes more manageable by increased exports of merchandise and a policy of national self-reliance in areas of domestic advantage.

These problems have to be resolved within an overall strategy to realize the Prime Minister's objective of creation of a welfare state in an emerging market. For all this, a clear vision with set goals and right priorities is needed. There is much confusion in official documents and statements as to which sectors are the key drivers of the economy and how these are prioritized.

An "export-led industrial strategy" is being evolved by the Planning Commission. Official documents like Pakistan Economic Survey 2003-2004 indicate the government's strong commitment to work for "SME-led economic growth " and "SME-led private sector growth."

Talking about consumer financing by banks to meet the needs of middle and low- income groups, State Bank Governor Dr Ishrat Husain recently indicated about a possible consumer-led growth.

As of September 2003, an IMF report says the share of personal loans, primarily auto loans, mortgages and credit cards, which were negligible in mid- 1990s, has risen to 12 per cent of the total bank credit.

Noted economists maintain that a sustainable economic growth is investment-led. So far, domestic investment are of short-term nature and foreign investment levels are pretty low when compared to neighbouring countries.

That leaves another option: Will the growth be triggered by fast rising public sector spending? Or will it be a combination of factors harmonized, prioritized and balanced through strategic thinking.

Many countries have gained by making the right choices suited to their conditions and stage of economic development. Currently, US economic growth is consumer-led and the key drivers of South East Asian economies are exports and consumers.

In case of Pakistan, exports provide 17-18 per cent of the GDP. Bulk of the exports is contributed by large- scale manufacturing which creates very few jobs. Rising merchandise exports ($12 billion) are still outpaced by faster imports ($15 billion) whose contribution to GDP is negative and trade deficit is funded by remittances (close to $4 billion) sent by non-resident Pakistanis.

About $2.5 billion are earned through exports by SMEs whose contribution to the national manufacturing output is just over one-third. According to official figures, the SMEs account for 99 per cent of the non-agricultural jobs. Whereas, the share of agriculture in GDP has declined to 23 per cent, it still provides jobs to 41 per cent of the work force.

The recent focus on SMEs and agriculture may help quicken the pace of growth while, at the same time, creating jobs. Much lesser investment is required to boost agricultural output.

According to IMF, lending to previously unserved markets has risen substantially in the past two years. Financing of agriculture by commercial banks, SMEs and housing now exceeds credits extended by specialized public sector banks like Agricultural Development Bank, SME Bank or HBFC.

In 2003, bank credit reached 15 per cent of all farms. SMEs obtained just seven per cent of their financing from banks and other financial institutions. But the greatest source of finance for both small and large firms was retained earnings.