Zarrar Sehgal – Chairman Pathfinder Group,
Host of the Pakistan Breakfast at Davos 2024 warmly welcomed the participants at the 20th Pakistan Breakfast hosted by Pathfinder and VRG. “We are honoured to have His Excellency Prime Minister Anwar ul Haq Kakar in our midst today. Thank you, sir, for gracing us with your presence. Before we proceed, I’d like to acknowledge the presence of an esteemed individual, Mirek Dusek, whose impressive ascent to the role of Managing Director at the World Economic Forum, overseeing Eurasia, Europe, and other forum engagements, has been nothing short of remarkable. Despite the challenge of keeping up with your ever-evolving titles, Mirek, we eagerly await your insights.”
Mirek Dusek Managing Director, World Economic Forum (WEF)
Thank you for having me here once again, Ikram, Zarrar, and Mr. Prime Minister. It’s a pleasure to be part of the 20th edition of the Pakistan Breakfast at the annual meeting, a truly commendable tradition. Ikram, your longstanding partnership with the World Economic Forum spanning over 30 years reflects significant dedication, and I appreciate your continued engagement.
Mr Prime Minister, your presence is valued, and I commend your eloquence during the recent session on geopolitics. Facing challenges like the aftermath of floods and other natural phenomena, your 4RF plan and initiatives like the Recharge Pakistan Initiative launched at COP 28 are crucial for garnering international support. The overarching theme of this year, ‘Rebuilding Trust,’ directly addresses the evident erosion of trust in societies and among nations. It responds to the profound transformations in geo-economics, technology, society, and climate. Our response involves reinforcing the Forum’s core DNA as a platform for dialogue, emphasizing inclusivity across generations and nations on critical issues.
Additionally, we are prioritizing solutions, and steering discussions toward new models, policies, and strategies. I’d like to highlight ‘The Edison Alliance,’ an initiative focusing on global digital inclusion, where Pathfinder Group, through the Assan Mobile Account (AMA), has played a pivotal role. With your support, we are making significant strides towards our goal of connecting 1 billion people by 2025. As of January 2024, we’ve reached 784 million. Thank you to Pathfinder Group and Prime Minister Kakar for contributing to this initiative and for your presence at the annual meeting.
Zarrar Sehgal Chairman Pathfinder
The Assan Mobile Account has already been a great success, with millions of accounts opened and billions of transactions recorded. I think the theme of Davos this year, ‘Rebuilding Trust,’ probably applies to Pakistan as well in many ways. The current government inherited a very difficult situation – a falling GDP, floods not due to Pakistan’s fault but a result of climate change caused by other industrialized countries, rising inflation, and a stock market in turmoil. In your brief tenure so far, you’ve started to rebuild trust in Pakistan. You can see that from the response we’ve had at Davos and the World Economic Forum. Just this breakfast is a good example.
Despite our difficulties, there’s a deep interest in investing in Pakistan. We must be honest about ourselves and face up to the challenges we’ve had. We shouldn’t tell investors an incorrect story about who we are; instead, we should tell them about the pitfalls. But then we should also explain how we are overcoming these challenges and why Pakistan remains a wonderful place to invest as a developing nation. We are in the right place, connected to the Middle East, Central Asia, and various parts of the world. What your government has done is admirable – raising GDP, a Pakistan Stock Exchange on an upward trend for the last five months, and inflation coming under control. Some of it has to do with the oil shocks and the war in Ukraine which has caused supply-side problems. It’s not Pakistan’s fault, but we remain the victims of it.
It’s a privilege to host not just you but also the members of your government at a forum like this. It allows you to tell Pakistan’s story effectively and help people understand why we remain a great place to invest. We should take on our challenges, like our geopolitical placement in a region surrounded by problems. We can turn that around and emphasize that we remain the focal point for various old roads leading to different parts of the world. We are part of that connectivity and part of the solution. Despite concerns about unemployment, a population under 30 years old is a market for goods and services, an investment in education reform, and a focus on digital financial inclusion. These are the things that will take Pakistan well ahead in the 21st century and overcome some of our problems. With that brief introduction, I would like to now welcome the Prime Minister to say a few words.
Anwaar-ul-Haq Kakar Prime Minister of Pakistan
I’m humbled and grateful to Ikram Sehgal for his involvement and for introducing me to the World Economic Forum a few years back when I was relatively less known. Here I was in this breakfast audience a few years back, reflecting on the transformation that has happened. Ikram Sahab has been very generous to me in a personal capacity, introducing me to different forums, and I’ve always benefited from his advice and suggestions. So, thank you so much, Sir.
About Pakistan’s story – it’s a great place, and I’m not just boosting it in a hyper-nationalistic tone. Pakistan has a population of 240 million people. In its backyard, the whole of Central Asia lies, landlocked and looking for connectivity through Pakistan. Midway, Afghanistan is there, and as Iqbal has said, it is the heart of Asia. The stability there has a spillover effect in the rest of Asia, along with the North Caucasus and Iran on one side, and then there is a Confucian civilization of 1.5 billion people. Pakistan is a member of the Economic Cooperation Organization (ECO) with a 500 million population of 10 member countries compared to India which is considered the biggest in terms of population.
Around 336 trillion dollars in trade are happening next door in China, and on the right, the Gulf Cooperation Council (GCC) with all its hydrocarbon exports has transformed its economy, diversified it, and is looking forward to entering the manufacturing area. So, what do they lack? They have capital; their banks are filled with money, but they don’t know where to put it due to a demographic disadvantage. They have two options – either import the population to their countries or take the capital to a framework where the right environment, technology, and so on are available. Either they import a population from India, Bangladesh, or Pakistan, which has political implications for the Arabian Peninsula. So the preference probably would be that the capital flows to those countries. We have to be more competitive, and more attractive to facilitate industrialization there. The journey of Chinese transformation, post-1979, and modernization, where they are relocating some of their industry, includes Pakistan as one destination along with Southeast Asia. Pakistan, with its diversified cultures, ethnic groups, and geography – from the highest peaks in the north to the deserts in Balochistan – offers a unique landscape in one territory.
Pakistan’s biggest asset is its human resources – 240 million people, 60 per cent under the age of 30. That means a lot of energy that needs direction. We have around 1.5 million workers in just the IT sector, working on international accreditation. In a year, we aim to produce about 50,000 graduates that will be internationally accredited. Pakistan’s governance structure is improving despite challenges. If we can respond to those challenges, I’m quite sure that within five months, any mandated government in place by the end of February would have a blueprint for how we respond. People are feeling a deep sense of positivity. We brought improvement, revamped the taxation structure, and are making structural changes in tax collection.
So, there are two lessons to take home – spend less on the government and earn more. It is an effective, smart, and less government. We are partners in the business in the private sector, encouraging them to make more money, and we’ll tax them, taking our share and spending it on the social sector. This model has worked in many parts of the world, and I’m quite sure it would work here as well. Pakistan is a story of identity. Our journey started on August 14, 1947, or for those who have studied Pakistan Studies at school, with the entry of Muhammad Bin Qasim from the Arabian Peninsula, considered the starting point of that identity. I would take it a bit further. I come from Balochistan, where the Mehrgarh Civilization initiated and provided the early inhabitants to the Indus Civilization.
So, Pakistan’s identity and its story started more or less about 9000 to 10,000 years ago. The collective memory of Pakistan has many languages as part of its identity, from Sanskrit to Persian, English, local languages like Saraki, Pashto, Brahui, Sindhi, and Punjabi, inspired by Central Asian languages like Turkic Mongol origin languages, crafting a new Lingua franca of Urdu. It expresses itself in poetic terms, producing drama and art. Pakistan is not just a story of a specific religion; it’s way broader than that. There is a lot of interest, and Urdu is one of the biggest languages spoken. Its poetry is classic, with people like Ghalib leaving a deep mystic impact. We have not been able to showcase him much, but in my humble opinion, the themes, of course, Rumi is a mentor, we’re not creating competition, but they were the wine of the same bottle, more or less, with the same sort of taste, the artistic taste.
Pakistan is not just a land where trade activity would be happening and all dry. It has its ambience, colour, different cultures, languages, and cuisine, from Baloch Sajji to Shinwari Tikka and Karhais, favourite cuisines experienced from one end of the country to the other.
Pakistan is a beautiful story, a great story. We need more storytellers like yourself, Ikram Sahab. Thank you so much for inviting me again, and I hope we will continue this partnership with the World Economic Forum and Pathfinder Group, contributing in the future.
Zarrar Sehgal Chairman Pathfinder Group
Maybe purely from a foreign investor perspective, many concerns persist about Pakistan and its bureaucracy. What do we need to focus on, so we can streamline the process for incoming investments? It’s not just about addressing concerns related to taxation, subsidies, or government support, but more about the protections. What we can offer to the investors when they choose to invest in Pakistan?
Anwaar-ul-Haq Kakar Prime Minister of Pakistan
First of all, let’s agree that we need to eliminate certain bureaucratic habits. You can’t live with them, you can’t live without them; that’s the situation in the long run. I believe the Special Investment Facilitation Council (SIFC) is a commendable initiative because the challenges and Red-tapism faced by foreign investors were significant.
During our analysis, we identified challenges related to obtaining NOC from various departments, whether at the provincial or federal level, and the involvement of multiple agencies in issuing such authorizations. Now, with statutory support, the SIFC is backed by law, transcending its status from a mere administrative initiative or a product of administrative notification. This legal foundation fortifies it, offering foreign investors a streamlined process through a one-window opportunity to approach the executive committee and accomplish everything in a short span, sometimes even within a week. This expedites the process, enabling them to be on the ground swiftly and commence their essential work. While there may be further improvements for this forum, it undoubtedly serves as an excellent starting point.
Question I’m Khushbakht, a lawyer from Karachi, Pakistan, with six years of experience, focusing on gender-based violence. As a representative of the Global Shapers Community, the World Economic Forum’s initiative for young people under 30, I’m the sole female delegate from Pakistan among 10,000 members. While discussions on investment and trade are crucial, my concern is the absence of dialogue on the future of women in Pakistan.
Given the alarming rates of violence against women, I seek insights into your vision for the future of women in the country. Additionally, considering the significant emigration due to economic challenges, especially among the youth, what measures do you propose to address this issue and create better opportunities domestically?
Prime Minister I’ve been trying to explain this movement of people from point A to point B, and in this specific case, from Pakistan to the rest of the world. I do not view it as a negative happening. For me, this movement is what makes up the economy. We keep telling people, or we keep hearing, that it is about goods and services. So, the movement of these people, I take them as a supply chain in terms of services. They’re not vanishing from the planet; they’re going from one point to another. The study case was classic during the 60s in India. People were saying in those days that there was a brain drain in India.
They went towards the Western hemisphere, got settled there, and in the next 30-40 years, they transformed into brain assets. Then they returned with their expertise and capital acquired in the Western Hemisphere, contributing back to their economy.
So, if this transformation is viewed with a political connotation, I think that is skewed, and distorted. It’s a very natural phenomenon; people were always coming and going to other parts of the country. In Pakistan, this is not unique; it has been happening for years. What about the 1.67 million Pakistanis residing in the UK? They left during the last month. It means that there has always been a pattern. People from Algeria settled in France, and people from Turkey settled in Germany, and in a sizable manner.
So, we should not view legal migration from our country to the rest of the world negatively; instead, it should be encouraged. It grows, contributes to your overall economic structure, and increases your contribution in remittances. So, they are eventually our assets, no matter where they go.
We should not be disconnected from them; we should not disown them. There should be a dialogue and conversation with the diaspora. That aspect, I think, is more important than showing concern about why people are leaving. People should remain connected. There are three generations in India still connected, in the case of Bangladesh, Pakistan, India, and a few other countries. So, that sense of nationalism when you are a foreign resident in another area is part of the challenge that should be a point of concern.
We should have a dialogue and conversation on those topics to keep them engaged constructively and positively, which is a win-win situation, and a beneficial situation for both parties.
Now in response to the first question, I would say:
وجود زن سے ہے تصویر کائنات میں رنگ
Wajood-e-zan se hai kainat main rang. This is what our mentor, our founding father (ideologic), Allama Iqbal, who envisioned this entire reality of Pakistan, believed. Can any decent soul, coming from any faith, any culture, any background, any ethnicity, deny the role of proper placement of women in society? He or she can be just insane. No sane individual can deny that. The challenge is, and yes, we have to reiterate our commitment towards gender balance and the issues related to that.
But the central placement of a woman in your social life, in your political life, in your economic life, in your personal life – I would again say, I haven’t seen a saner person who has not agreed to women’s role. Yes, there are issues of attitudes, psychological, at personal level, at a societal level, sometimes even at a cultural level, at a legal level, and they are being responded to.
During Pharaoh’s Egyptian time, the most influential people in that society were its women, and this was one of the reasons that Moses was guided towards Asiya because, in that social framework, she could influence the Pharaoh to change his mind. Human history has seen different things, sometimes very promising for women and sometimes not that promising. When did the same Switzerland, in which we are having this dialogue, get its right to vote for women? Probably somewhere in the ’70s. So, you’re not doing that bad. We’ve been voting probably before the Western Hemisphere when it comes to political rights.
Violence is a very serious issue against women, as you know. We do not have a Parliament at the moment, so if there are lacunae in the law, we won’t be able to cater to that. But, as far as the administrative response is concerned, I can assure you that until my last hour, if we receive any sort of report, it will be responded to firmly because we don’t just believe in it, we hate it. My inspiration in my life is my sister. I haven’t seen a more honest individual than her. I always take her as a role model. She died at the age of 35, and I keep referring to her in public conversations. I’m proud of her. She’s my pride. She’s in the grave, but I’m still remembering her. I’m not talking about my father; I’m talking about my sister. She was the one who gave me the real inspiration to know and appreciate ethos, and values.
I would be surprised at the time that how come she, at such a young age, thinks about these things and encourages people, and confronts people, including myself, to stay on the right course in life. That sort of strength of character I haven’t seen in many men in my family. Inspirational characters are everywhere in society. I dedicate your question to my late sister, and I can assure you that there are many people in that country, and there is the majority who believe in a woman’s placement as a nucleus, as a central role in society. Yes, we have cultural nuances, we have shades, and the choice of attire at times becomes a question for women’s liberty. In my humble opinion, it’s about women’s choice rather than their attire.
It’s for her to choose what to wear, sometimes a liberal attire, sometimes not that liberal attire. Why are we being critical in either way?
If we have to genuinely respect the choice of it, let all these queries, these challenges, be mostly responded to, and it should get effective participation by the women themselves. They should be the ones to steer it, to guide us, to navigate and tell us, and we should be patiently listening to them. We should be good listeners rather than telling them what to do. So, tell us, guide us, and you will be one of the important participants in this entire discourse.
Question My name is Asim Yosuf, and I’ve been living in the UK for over 20 years. I run one of the largest businesses in my region. My question to you is about SIFC. In the past, overseas Pakistanis faced losses due to exchange rate fluctuations and policy changes. What guarantees does SIFC offer to ensure that we won’t face similar issues in the future?
Prime Minister Regarding the currency rate, we are not interfering; it’s determined by market forces. We enforced a law to curb illegal currency trade, which positively impacted the currency rate. SIFC, anchored with other institutions, including the entire Federal cabinet and military, ensures organized intervention in various areas, providing confidence to foreign investors, particularly the diaspora.
Question I’m Adil Mansour, a manufacturer of car and tractor parts in Pakistan. Despite challenges like currency shortages and the non-opening of Letter of Credit (LC) by the State Bank, my concern is different. In your tenure, will overseas Pakistanis be granted voting rights?
Prime Minister No, that requires legislation, and with no Parliament, I can’t pursue it.
Question Khawar Memon here, what are the salient features that you put there for the next regime, to continue and assure all of us that the future is brighter? About SIFC, some of the concerns or apprehensions could be that these initiatives are good but it could be a patch on a patch on a patch, how do we ensure that SIFC won’t get weaker with these issues but get stronger with these issues in future?
Mr. Anwaar-ul-Haq Kakar Prime Minister of Pakistan
Thank you. If we convince the next government to continue spending less on the government and the state-owned entities, we need to gradually get rid of those. Privatization is our top priority. We need to privatize institutions like PIA. A government should not do business. Let the business be done by the business people, by the private sector.
So, wherever interventions we are having, and we are trying to subsidize all those non-functional entities, we need to gradually get out of that, for instance, PIA. There is also an opportunity for the Steel Mill. We are encouraging those resources which they already have, to be converted into special economic zones, which would help them do the industrialization. When it comes to industrialization, we do not want a new real estate business, where you just invest in the land as a value. As far as the other part of the manufacturing element is concerned, it is underinvested. You don’t have modern machines; you don’t have the rest of the infrastructure, and you pay 1 billion rupees for an industrial plot. That is one of the wrong models which we have identified, has affected our industrialization process deeply.
Reforming the taxation sector and the culture around it is the utmost priority. If we do not have structural changes in the FBR, I don’t think we can survive with the current practices. For instance, we have a target of 21,000 billion rupees that we should receive as our tax revenue, and our receivables are around 6000 to 7,000 billion rupees. So, there is a gap of 14,000 billion rupees. Who’s going to fill that? We are going to borrow more. And then there is a non-documented economy, which is, by the way, almost 80%. So, 20%, you are having a receivable of 7,000 billion rupees, and then there is a gap of 14,000 billion rupees from there. And still, we are arguing about political rights, which we should, but the political rights are translated by economic contribution.
No taxation with no representation, without taxation; where was that slogan coming from? The initiation of decolonization was based on the economy, about its economic role. So, we should ensure our political rights, but before that, we should fulfill our economic responsibilities. No one is willing to contribute towards the tax network, and everyone watches the services of the Scandinavian countries. It’s hard to achieve. How would you do it?
I keep hearing people saying that we will subsidize this, and we will subsidize that. It’s all about the habit of spending. Where is the earning part? I know it’s quite romantic to tell people that I would be spending on the social sector, I would be subsidizing the Health Services, I would issue this card or that, whatever. But where would I make that money to spend on these things? No one knows, and no one is interested in talking about it.
So, these are the few areas, which I think, if focused, I’m pretty much sure, the rationalization of taxation, the people who are already at such a regressive system of taxation, the legitimate people who are paying taxes, we are squeezing them more. Usko Chhutti na milli jisko sabaq yaad huwa. So what do you do with that? This can’t survive for a long time.
Closing Remarks by Ikram Sehgal
Thank you, Zarrar, and thank you, Prime Minister. I’d like to express my gratitude to many people, but first and foremost, I want to thank my family for supporting me throughout these 30 years. It’s a long time, spending your own money, and the family often thinks those resources should be spent on themselves rather than on everybody else. In the meantime, another group I want to thank is my staff. Prime Minister, everything you see here, including the stage, is the result of their hard work. I also want to acknowledge the two CEOs of the major companies here, Ali Shah and Salman. They were working diligently alongside many other individuals.
Ikram Sehgal, Co-Chairman Pathfinder Group
I want to emphasize that there’s no shortage of Pakistani expertise, and there’s certainly no lack of Pakistani talent. Many comments have been made about the SIFC, and I must admit I was initially skeptical. Many years ago, I went to General Musharraf and tried to convince him to take action, but he declined, citing democracy constraints. When the SIFC started, I remained a bit skeptical, but now I believe it is an instrument of success. This is because you have the right people with the right attitude, and they can navigate through bureaucratic hurdles, as Adil Mansour mentioned. We need more individuals to step up and embody that proactive spirit. Thank you.