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Shaukat Aziz on Security

October 19, 2009

I’m in Arlington Virginia this weekend attending the Organization of Pakistani Entrepreneurs, D.C. chapter’s annual conference. This year’s theme is “Thriving in A Challenging Economy” and of particular interest was this mornings keynote address by former Pakistani Prime Minster Shaukat Aziz. Although retired from both politics and an illustrious career in international finance, now focusing on non profit work, he shared insights on global affairs ranging from the financial meltdown, terrorism, economic development and challenges facing the Muslim world, ultimately tying it together to make a simple point: international economic development can yield international security.

Aziz attributes economic downturn to sheer “greed” and “arrogance” which resulted in gross regulatory failures and voids in leadership on Wall Street. Stressing consumer confidence and unemployment indexes as opposed to stock market increases as indicators of recovery, he further warned against decoupling emerging markets from states more hard hit by the crisis and marked terrorism of equal importance to addressing financial crisis. In doing so, he referred to “fault lines” in the international system fractured by terrorism, and called on Muslim IGO’s such as the Organization of Islamic Conference to do more in bridging interfaith dialogue.

It was timely advice since his address was preceded by America’s Ambassador to the Organization of Islamic Conference, Sada Cumber. Addressing a mostly Pakistani audience, he underscored the importance for diasporas to seek opportunities for interfaith dialogue so as to reclaim what has become an internationally inaccurate view of Islam. Proactively promoting interfaith harmony in addition to transcending party lines for non resident Pakistani’s was another prescription. He offered an example of Former President George Bush who when asked about his Clinton as his Democratic successor in the 1990’s explained he supported the American President, suggesting such bipartisan, unified support is what Pakistan requires politically.

But his most provocative insight came during Q&A session when someone asked about the IMF’s role on Kerry-Lugar legislation to Pakistan. Without delving specifically  into IMF policies which disperse funds in a traunch system only as stringent conditions are met in entirety, Aziz succinctly explained that anytime a state accepts IMF funds, they compromise economic sovereignty. It was a powerful, provocative statement from a man whose experience in international finance runs deep. He went on to supplement the idea by describing achievements in maintaining Pakistan’s economic sovereignty during his political tenure when he rejected IMF funding.

Overall, Aziz was insightful, relevant, and quite entertaining. He always manages to capture audiences with sharp commentary that transcends generations and professions. After all, every time i’ve heard him speak has been at entrepreneurial conferences, and I’m far too nerdy to be an entrepreneur.

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7 comments

  1. […] audience question by talking about how IMF funding causes nations to give up economic sovereignty – this was a great point, and a very timely one given today’s economic ‘crisis.’  Aid from international […]

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  2. Zainab, great meeting you at the event yesterday! I also thought that portion about the IMF was a highlight of the day…Mr. Aziz’s point about government unity was very important as well. In fact, this is one of the main points that pro-democracy people use — how can a nation succeed if it’s senior leadership cannot agree to disagree? Pakistan certainly has a problem with this.

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  3. I am hearing rumours that Musharaf is denying responsibility for Bugti’s murder saying that PM and CM were in charge of day-to-day affairs at the time. It would be interesting to hear what the former PM has to say about that.
    To the point, I don’t think he is making a great observation here. This is a known fact that when nations accept aid, that aid comes with strings attached. States don’t give money out for altruistic reasons. They have their own interests to serve and wherever those interests are clashing with another entity that has a need for aid, then aid is basically a way to accomplish the objectives of those interests. I think the more important point is that he is following the trusted and known path of telling the truth after he is out of power, if it can be argued at all that he had any power to begin with. This is something everyone does. It is not unique or provocative.

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  4. well, to an undiscerning eye and mainstream media it is provocative. Few are aware, and even less report on details of IMF funding that’s based on a traunche system and very stringent contingencies that often create a recession by privatizing industries within the first few years of aid being dispersed.

    I don’t think most people know this. The concept of economic sovereignty as related to IMF funding is not one we hear often about on Pakistan. It’s overshadowed by other news and Aziz’s comments were a provocative reminder within the context of decreasing security and increasing funding, mainly through Kerry Lugar legislation which will likely be through the IMF.

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  5. That’s interesting. I did not think that KL aid was going to be distributed through IMF. I think the mechanism of the distribution is more direct this time.
    This is from the bill that was sent to the house:

    (3) TRANSFER AUTHORITY: (A) IN GENERAL – The Secretary of State is authorised to transfer amounts in the fund made available to carry out this subsection for any fiscal year to the Department of Defence’s Pakistan Counterinsurgency Fund established under the Supplemental Appropriations Act, 2009 (Public Law 111-32) and such amounts may be transferred back to the Fund if the Secretary of Defence, with the concurrence of the Secretary of State, determines that such amounts are not needed for the purposes for which initially transferred.

    From what I can discern, this is a direct transfer situation between Depts in US and Pakistan. IMF or any other third party is not mentioned here unless the house ammended the bill.

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  6. […] question by talking about how IMF funding causes nations to give up economic sovereignty – this was a great point, and a very timely one given today’s economic ‘crisis.’  Aid from international […]

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  7. […] question by talking about how IMF funding causes nations to give up economic sovereignty – this was a great point, and a very timely one given today’s economic ‘crisis.’  Aid from international […]

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