View from the central bank
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View from the central bank

Ishrat Husain, governor of the State Bank of Pakistan, talks to Euromoney’s Jules Stewart about economic reform, the attraction of foreign investment and privatization.

What have you achieved in terms of restructuring Pakistan's finances over the past year and how can this translate into investment?
Our primary objective has been to achieve stability in our external accounts. In 1999 we were on the brink of default and lacked the resources to service our external debt. We wanted to be quite sure that any unanticipated shocks to our economy would not lead to a crisis. We have now established our credibility with international financial institutions.


This used to be a one-tranche country and now we have completed three tranches of a stand-by IMF facility and we're going into the fourth PRGF tranche and everything is on time. We have also secured a sustainable solution to our bilateral debt through the Paris Club, which postponed our payments for the next 17 years. Thirdly, we started repaying our expensive commercial bank and short-term debt. We also substituted concessional soft-term loans from multilateral institutions and stopped borrowing on hard terms. All of this gave us the capacity to honour our obligations and provide a cushion to protect us from future shocks.


What are you doing to encourage investors to return to Pakistan?
We're working very hard to bring about a durable security and law-and-order situation.



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