Ladies and Gentlemen,
I am pleased that the government of United Kingdom is organizing this Energy Roundtable, bringing together experts and investors in the field of energy from United Kingdom and Pakistan. I take this opportunity to thank the Foreign and Commonwealth Office, the High Commissions of our two countries and the Pakistan’s Board of Investment, for assembling such a distinguished group of people to discuss and guide us in achieving the important goal of energy sufficiency in Pakistan.
Pakistan and the United Kingdom share strong and deep historical ties. The mutual admiration and friendship between our two peoples has reinforced our understanding and cooperation. The British government, over the years, has been most supportive of Pakistan in all its endeavors. It was therefore a matter of great satisfaction to me to receive Prime Minister David Cameron in Pakistan, as the first foreign leader, after I took oath of my office.
Ladies and Gentlemen!
The primary object of today’s discussions and deliberations is to share ideas and international best practices between policymakers and investors, for formulating an optimal energy policy for Pakistan, with particular focus on energy sufficiency and developing a competitive energy industry. We will not only discuss electricity generation and distribution but also explore how to promote public private partnership in the energy sector. We would also like to know the incentives and policy framework that can spur private investment in oil and gas sectors of Pakistan. As I remain committed to transform the role of the government from a manager to a regulator, we would like to explore how to build the public sector’s ‘capacity to regulate’ in a short time. The experts’ review of their experiences in privatization and regulation will enable us to identify the ideal policy mix for a transparent and enabling process. I am confident that we will find these discussions to be very useful.
Ladies and Gentlemen,
In the past decades, revolutions in technology and communications have transformed our traditional concepts of time and space. These days, changes in the price of North Sea oil affect the stock markets in Pakistan with the same rapidity as the effects of an outbreak of a lethal virus. Consequently, in an integrated world, we need to find shared solutions for shared problems.
As all of you know, inclusive economic development requires substantial investment in an efficient public infrastructure. Energy and communication infrastructures form the backbone of industrial and social progress of any society. Yet the past few decades have also demonstrated that it is mostly the private-sector led investments that have resulted in sustainable economic progress. Nation states have therefore rightly identified their limited role as regulators and planners of infrastructure. Our challenge is therefore to channel private sector resources in infrastructure development that results in inclusive economic growth.
We have much to gain by learning lessons and best practices from the developed economies. I am glad that such dialogues are being arranged where experiences can be shared and a successful strategy developed, particularly in areas where errors cannot be acceptable, as consumers cannot be penalized for the mistakes of the policymakers.
Ladies and Gentlemen,
At the time of taking office, we inherited a challenging macroeconomic situation. Our pressing priority was to pursue a “course-correction”, stipulating an increase in revenue, reduction in expenditures, reducing the fiscal deficit and expanding the development portfolio. We used our political capital to take tough decisions, which have resulted in significant improvement on all major economic indicators. We have reduced our budget deficit from over 8% in the fiscal year we took over to less than 6% in the first year, and are poised to end the current fiscal year at around 5% deficit. Our GDP growth, though insufficient, also increased to 4.1% last year, is expected to be around 5% this year, and over 7% before our term ends. We have also successfully controlled inflation by reducing wasteful spending, and our stock market has been one of the best performing international stock markets in the world.
I have absolutely no doubt that Pakistan is on the verge of rapid economic and social progress, though we continue to be confronted by massive energy shortages. This is a challenge that cannot be resolved with a patchwork of temporary measures, but requires a fundamental change in both policy and governance structures. My successful experience of promoting public-private partnerships in banking and telecommunication sectors encourages me to pursue the same approach for the Energy sector. My vision is to develop a competitive energy market in Pakistan that on one hand provides a fair return on investment, and through a robust regulatory regime, adequately protects the rights of consumers on the other. This will require significant capacity building of our planning and regulatory agencies in a challenging timeframe. With this in view, I have tasked my team to attract investment from all over the world in generation, exploration, distribution and transmission of both power and gas sectors. We are prepared to transfer management control for improving service delivery, while retaining majority shares in these companies. I fully realize that this turnaround will require our complete commitment and support.
Ladies and Gentlemen
I have always advocated the importance of regional connectivity for accelerated economic growth and prosperity of the people across national boundaries. I am convinced that our recently finalized initiative of CASA-1000 project, which links Kyrgyzstan, Tajikistan, Afghanistan and Pakistan in a mutually beneficial relationship through an electricity transmission initiative. We are also trying to construct the TAPI gas pipeline from Turkmenistan to India through Afghanistan and Pakistan. Similarly, the China-Pakistan Economic Corridor will not only link the two countries, but also usher in an era of development, progress and prosperity for the people of the entire region. My government aims to develop one of the largest coal deposits in the world, at Thar in the province of Sindh, as the future energy capital of Pakistan. The vast resources of Thar are enough to meet the energy needs of many countries in the region for tens of decades to come. My government is committed to provide complete support for successful and early exploitation of these reserves.
I am confident that these initiatives will not only provide for commercially viable economic solutions but also strengthen peace and stability in the region.
Ladies and Gentlemen!
Pakistan’s energy sector holds great promise for an attractive rate of return on all investments. I am sure that the deliberations here will enable us to make the necessary corrections in our policy framework to align it with international best practices, thus generating an enabling environment for investment. I again express my sincere appreciation to the Foreign and Commonwealth Office for organizing this roundtable.