Pakistan – Challenges, Response And Opportunities

H.E. General Pervez Musharraf, President Of The Islamic Republic Of Pakistan

Sydney Australia
16 JUNE 2005


Honourable Chairman of the Asia Society,
Distinguished guests,

It is indeed an honour and special privilege for me to be invited to the Asia Society and address this distinguished gathering.

I also take this opportunity to express our thanks to the people and government of Australia for extending to us warm and cordial hospitality in Canberra and now in this great metropolis Sydney. In Canberra, I have had wide ranging and fruitful talks with Prime Minister John Howard on bilateral, regional and global issues. I am sure the understandings that we have reached will reinforce our bilateral relations and raise our cooperation in the political, economic and cultural fields to a new higher level.

I am happy to see a large presence of my compatriots at this distinguished gathering that testifies to close linkages between Pakistan and Australia and the contribution that our expatriates are making in the building of the great Australian Society.

Ladies and Gentlemen,

I will share my thoughts on our experience of the past six years of the challenges that we have faced in Pakistan on the external and domestic fronts, our policies and response to address these challenges and finally the new dynamism and promising environment in Pakistan and in our region.

I can appreciate that for you living in Australia, in the security of your fortunate geography, it would be difficult to appreciate and grasp the pressures that an environment of conflict and tension can exert on a country. Also, it would be difficult to comprehend the problems of a country with a population nearly ten times larger squeezed in an area ten times smaller than your size.

Notwithstanding the problems, today our policies defined with a clear vision and pursued with determination have started bearing fruit. The regional environment is peaceful and stable and Pakistan is forging ahead with new dynamism and confidence, achieving high growth and contributing to the realization of the full economic potential of our region.

External Challenges

Ladies and Gentlemen,

Externally, Pakistan faced challenges mainly on two counts; the conflict in Afghanistan and the unresolved Kashmir dispute. In the past two decades we have been victims of terrorism that today poses a major threat worldwide. Domestically, six years ago we inherited an economy in shambles compounded by corruption and misrule. Many in the media had dismissed Pakistan as a failing state. We have turned the corner on all counts.


Afghanistan became the last front of the Cold War following the Soviet military intervention in 1979. However, with the exit of the Soviet troops in 1989, the world attention shifted to Eastern Europe and the disintegrated Soviet Union. Afghanistan suffered international neglect; the internecine conflict continued with the situation deteriorating from bad to worse. Pakistan also suffered the consequences. Firstly, we were burdened with nearly four million Afghan refugees without international support. Secondly, Afghanistan became a base for extremist forces in particular Al-Qaeda that had coalesced around the alienated Arab youths brought into Afghanistan a decade ago.

In the transformed post- 9/11 circumstances, the international community has recommitted itself to assist Afghanistan. We support the Bonn process and the government of President Karzai and efforts to help restore normalcy and stability in Afghanistan. An Afghanistan at peace with itself is important for Pakistan and vital for the stability and economic progress of the entire region. This objective will be expedited with enhanced assistance by the international community for rehabilitation and reconstruction of the country. Despite our limited resources, as a responsible neighbour, we are contributing to this process and have accorded unrestricted transit access to land-locked Afghanistan.

South Asia

In South Asia, we are working with India through peaceful dialogue to resolve all issues including Kashmir to ensure durable peace in the region. The journey that I started with former Prime Minister Vajpayee and is continuing with Prime Minister Manmohan Singh has yielded important results in the shape of progress on confidence building measures.

Today people to people contacts and other links have been restored. Srinagar-Muzaffarabad bus service has commenced to facilitate interaction among the Kashmiris on both sides of the Line of Control. These contacts have revived after a gap of over fifty years.

I must emphasize, however, that the Kashmir dispute needs to be addressed, it relates to fundamental rights of the Kashmiris; it cannot be wished away. The improved relations between Pakistan and India provide a unique opportunity that must be seized to resolve this dispute in a manner acceptable to all the three stakeholders namely Pakistan, India and most importantly the Kashmiris. My discussions with Prime Minister Manmohan Singh and with Kashmiri leaders who visited Islamabad last week, give me confidence that this objective is achievable. Sincerity, courage and flexibility is required from both Pakistan and India to resolve issues and build for our peoples a better future. The international community, intellectuals and media can help the process by encouraging all parties to stay the course and accelerate progress towards the desired destination.


Ladies and Gentlemen,

While the danger of global confrontation has receded with the end of the Cold War, the world remains an insecure place with the persistence of old disputes such as Palestine and Kashmir, new conflicts such as Afghanistan and Iraq and the new threat of terrorism. In neighbouring Afghanistan the emergence of al-Qaeda and extremist forces, owed in a large part to international indifference and neglect that the country suffered following the exit of the Soviet troops. Much could have been salvaged had the international community paid attention and taken timely steps to rebuild Afghanistan. In the globalized and interconnected world, security is indivisible and conflict situations cannot be insulated in today’s international environment.

9/11 shook the world that woke up to the new reality of terrorism. Pakistan became a frontline state to fight against this danger. We believe that terrorism must be rejected and countered forcefully as it threatened to disrupt modern societies. We also believe that along with action to eliminate and dismantle terrorist cells, there is need to address the root causes that lie in political disputes and deprivation and poverty that breed extremism.

Enlightened Moderation

A parallel danger is implicit in the false notion of clash of civilizations, specifically the West and Islam and tendency to malign the Islamic faith. This dangerous thesis and prejudices must be rejected. Islam is a faith of peace, tolerance and compassion. Islamic societies have been traditionally moderate. They have coexisted with other societies peacefully and have accommodated amidst them peoples of different faiths.

To promote understanding and inter-civilizational harmony, I was motivated to propose the idea of Enlightened Moderation. It envisages a two pronged approach that exhorts Muslim societies to reform and reject extremism while at the same time calls upon the West to facilitate solutions of problems that have caused deep suffering and anger among Muslims for many decades.

In Pakistan, a key element of our strategy to counter extremism is education. We have introduced Madrassa reforms to ensure that these religious schools have broad curricula and impart teaching that promotes tolerance and prepares students for vocational careers.

Domestic Challenges

Ladies and Gentlemen,

The greatest challenge that we face is on the domestic front relating to socio-economic development, reform and strengthening of political institutions in the country. Economic sovereignty, stable political process, good governance and security are fundamental to successful domestic policy.

Six years ago we had inherited an economy in free fall. With financial discipline and a consistent policy based on liberalization, privatization and deregulation of economy with increasing emphasis on the growth of private sector, we achieved economic recovery and sustainable growth. Last year, our GDP expanded at 8.4 percent with industrial sector growing at over 15 percent. Pakistan is among top Asian countries in terms of economic growth.

Our balance of payments situation has turned around reflecting strong export growth and with reserves exceeding US$13 billion and stable exchange rate. We successfully graduated from IMF programme and are now accessing international capital markets to finance our development.

Our political reform agenda included building grass root democratic structures, accountability and transparency to eradicate corruption and promotion of good governance. Democratic reforms included empowerment at the grass root levels and of vulnerable sections of population especially guaranteed representation for women and minorities. Today our parliament and other democratic institutions are functioning smoothly. Our print and electronic media is free, dynamic and assertive.

The government attaches high priority to social sector reforms. We ensured unprecedented inputs and resources for eduction, health and poverty alleviation. Pakistan’s poverty reduction strategy is implemented with active involvement of the government, the civil society and the private sector on many fronts that include accelerated economic growth, rural and urban development projects, micro-credit schemes and targeted intervention to help the poorest sections of the population.

Vision for Pakistan

We are conscious of the fact that socio-economic development is essential for future Pakistan. We are determined to build on the sustained economic growth, political stability and peaceful environment that we have been able to achieve. Pakistan needs to keep in step with global trends that are being shaped largely by economic forces.

We want to build Pakistan into a dynamic economy of our region with modernized agriculture, industry, sound education base and advancement in science and technology.

We are reorientating our policies, cognizant of globalization, and taking advantage of our strategic location at the crossroads of South Asia, Central Asia and West Asia. Geography has endowed us with unique potential to become the hub of economic activity in our region.

We would like to see the regional groupings of SAARC and the ECO, to which we belong, become effective. At the last SAARC summit in Islamabad, we took the initiative to conclude an agreement for a free trade arrangement in South Asia. We have offered energy corridor to India. Gas pipelines from Iran, Qatar and Turkmenistan to Pakistan on to India are under active consideration. We are developing roads and infrastructure linkages to provide Central Asia the shortest access to the sea. The construction of Gwadar Port is an important landmark in that direction. The ECO states signed in Islamabad in 2003 a trade agreement for reduction in tariffs for intra-regional trade.

We favour economic integration of the various sub-regions of Asia. This was the theme of the Asia Cooperation Dialogue Ministerial Meeting held in Islamabad last April. We look forward to an era of shared prosperity for all regions and all societies.

Ladies and Gentlemen,

Pakistan pursues peace and development in the region and friendship and cooperation in its foreign relations. With the United States we have forged a stable durable cooperative relationship. We are allies in the war on terrorism and Washington recently declared Pakistan a major Non-NATO Ally. China has been a close reliable friend of long standing with whom we have signed an important Treaty of Friendship, Cooperation and Good Neighbourly Relations that exemplifies strong bilateral relations. Our strategic partnership with China has been an important factor of peace and stability in the region. Pakistan’s relations with countries of the European Union, Russia and Japan are cordial and steadily expanding. We have security dialogues with most of these countries. Our close fraternal cooperation with the Islamic world is deeply rooted in bonds of common culture and faith. Pakistan is recognized especially by the GCC countries as a factor of stability and security in the region.

Our policy of Vision East Asia is aimed at strengthening our relations with Southeast Asia and others Asia-Pacific nations. My visit to Australia and later to New Zealand is an extension of that policy. I am sure that the visit will help to reinvigorate bilateral cooperation especially in the economic field and engage the interest of Australian businesses and entrepreneurs in Pakistan. Today’s Pakistan is a country of opportunity and promise.

I thank you.