WASHINGTON, Oct 6: Whoever comes to power after Oct 10 will continue the economic policies of the present government, says Finance Minister Shaukat Aziz. “Because it’s in the national interest to do so.”

In a wide-ranging interview to Dawn on three years of military rule in Pakistan, the finance minister insisted that “consistency and continuity” were key to economic success while fickle-mindedness would bring disaster.

He spoke of the challenges the military government faced when it took over in October 1999, explained how it overcame these challenges and praised its success but refused to acknowledge its failures.

“You may call them failures, I do not. I would say there’s need to do more,” said Shaukat Aziz when asked what were the major failures of the military government.

He acknowledged that price hike, unemployment and an unprecedented increase in power tariffs had made life difficult for the ordinary people. But these were “pains the nation has to endure to make more substantial gains,” he said.

“All we need is consistency and continuity,” said the finance minister, who consistently used the two words in his speeches, press briefings and the interviews he gave during his stay in Washington last week. It seemed as if he feared that the new government may not want to carry forward the task he is leaving incomplete.

Shaukat Aziz was interviewed on the 13th floor — yes there’s a 13th floor — of the World Bank building where the Pakistani delegation had an office. Entering the World Bank building — past the hollering protesters and police fences — felt like crossing the divide between “us” and “them.”

Outside there were people who had ordinary dreams and fears, like us. People who could love and hate. People who cared. Inside, it was the corporate world where emotions did not matter, capital did. Shaukat Aziz’s temporary office, which belongs to Tanwir Ali Agha, alternate executive director of the World Bank, looked like the war-room of Pakistani financial elite. Almost the entire finance ministry, including Secretary-General Moin Afzal, was there. Ambassador Ashraf Jehangir Qazi was the only outsider.

Shaukat Aziz was reading Dawn when we entered, a coincidence or another fine touch from a master of the corporate world?

“Let’s talk about the challenges first,” said the finance minister when asked to explain the successes of the current government. Throughout the interview, he was careful with words. He never used the word takeover or coup for the change of regime in October 1999. “Inherited,” was his word of choice. “We inherited a very challenging situation. Reserves were low. There’s talk of default. We were mired with sanctions, restricting the ability of donors even to help us,” said the finance minister while explaining the pre-coup situation.

And when he spoke of the achievements of the current regime, he was careful not to take all the credits. Gen Musharraf’s takeover speech and the Dec 15 address, in which he outlined his economic plans, were the benchmarks he kept referring to whenever he spoke of his gains.

Another point he emphasized was that the economic reforms were “homegrown” and not dictated by the World Bank or the International Monetary Fund, as the opposition alleges.

“In his first address to the nation, President Pervez Musharraf said his key priority was reforming the economy. We went into intensive dialogue with private and public sectors and with various other relevant groups, to come with a homegrown economic reform agenda,” said the finance minister.

Á high debt burden, he said, was one of the key problems the military government faced when it removed Sharif. “Perennial fiscal deficits, lack of investment and unemployment,” were other major problems.

But he saved his most alarming words for the Sharif family’s “habit of keep digging into the national funds” for their big and small projects. “One of the most serious threats to our sovereignty was inadequate foreign exchange resource. It made any long-term economic planning difficult. And resulted in a permanent air of uncertainty about Pakistan’s ability to service its obligations,” said Shaukat Aziz, while referring to the empty kitty the military government inherited from the Sharifs.

“As we reflect over the last three years,” he said, “we feel that we have largely achieved the objective we had set out. We have provided Pakistan a foundation to build on.”

“The government’s spending on development projects and economic growth are moving upwards. Growth, due to the drought, was 2.6 per cent in the first year of the government. It improved to 3.6 per cent in the last financial year and is on track for a 4.5 per cent growth rate in the current financial year, and leading to five per cent next year,” he declared.

Pakistan, he said, needs sustainable growth of five per cent and more over time to make a dent in the levels of poverty and improve standard of living for the people.

Some of the indicators of the success of the reforms, he said, are the low inflation rate, high foreign reserves, reduction in debt service cost, increase in GDP growth, high tax collections and exports. “In 30 years, inflation has never been so low,” he added.

The finance minister admitted that increase in electricity rates has hurt the people but warned: “If we borrow to reduce the rates, we will be trapped in the vicious death trap again that we have just come out. Your debt service will be 70-80 per cent of the total budget. And it will impact the social services and the national budget.”

Drought, he said, further complicated the situation by reducing the water level in dams. “Hydel power did not grow. So we relied on expensive furnace oil. Gas for generation was also slower in delivery. So the electricity produced by independent power producers had a negative impact on the consumers,” he explained.

He predicted that better days were coming. “In two years Ghazi-Barotha will be on stream, producing cheap hydel electricity. IPPs will reduce their rates because their debt will come down. Reliance on furnace oil be reduced and more natural gas, which is cheaper than oil, will be available.”

To control high line losses, he said, the government planned to privatize electricity distribution because “it will be difficult to steal from a private owner.”

The finance minister also predicted that economic growth will create jobs but the country needs a consistent growth — five percent plus — to absorb the workforce.

“But there’s no magic wand. It needs a lot of hard work, a sense of direction, consistency and continuity. China took 15 years, Fareast 10 years. It takes times. Gimmicks do not produce sustainable results,” he warned.

Asked to give a substantial example instead of making predictions, he said that in two years, the country imported a billion dollars worth of machinery for the textile sector, which means the investment is higher. “So new jobs will be created in the textile industry,” he added.

For private sectors, he said, exports will be a major engine of job creation. “There will soon be an increasing opportunity to sell garments in the US markets. We already have the market in Europe.”