Identifier
Created
Classification
Origin
08ISLAMABAD3095
2008-09-22 13:24:00
UNCLASSIFIED//FOR OFFICIAL USE ONLY
Embassy Islamabad
Cable title:  

ECONOMIC POLICY IN PRESIDENT ZARDARI'S ADDRESS TO THE

Tags:  PGOV ETRD ECON EINV PK 
pdf how-to read a cable
VZCZCXRO8267
RR RUEHLH RUEHPW
DE RUEHIL #3095/01 2661324
ZNR UUUUU ZZH
R 221324Z SEP 08
FM AMEMBASSY ISLAMABAD
TO RUEHC/SECSTATE WASHDC 8994
INFO RUEATRS/DEPT OF TREASURY WASHINGTON DC
RUCPDOC/DEPT OF COMMERCE WASHINGTON DC
RHEHNSC/NSC WASHINGTON DC
RUEAIIA/CIA WASHINGTON DC
RUEKJCS/SECDEF WASHINGTON DC
RHMFISS/CDR USCENTCOM MACDILL AFB FL
RHWSMRC/USCINCCENT MACDILL AFB FL
RUEHRC/DEPT OF AGRICULTURE WASHINGTON DC
RUEHNE/AMEMBASSY NEW DELHI 3810
RUEHKA/AMEMBASSY DHAKA 2283
RUEHLM/AMEMBASSY COLOMBO 1520
RUEHLO/AMEMBASSY LONDON 8744
RUEHML/AMEMBASSY MANILA 3010
RUEHKP/AMCONSUL KARACHI 0373
RUEHLH/AMCONSUL LAHORE 6115
RUEHPW/AMCONSUL PESHAWAR 4926
UNCLAS SECTION 01 OF 02 ISLAMABAD 003095 

SENSITIVE
SIPDIS

E.O. 12958: N/A
TAGS: PGOV ETRD ECON EINV PK
SUBJECT: ECONOMIC POLICY IN PRESIDENT ZARDARI'S ADDRESS TO THE
PARLIAMENT

UNCLAS SECTION 01 OF 02 ISLAMABAD 003095

SENSITIVE
SIPDIS

E.O. 12958: N/A
TAGS: PGOV ETRD ECON EINV PK
SUBJECT: ECONOMIC POLICY IN PRESIDENT ZARDARI'S ADDRESS TO THE
PARLIAMENT


1. (SBU) Summary: On September 20, President Asif Zardari addressed
a joint session of Parliament. The speech touched briefly on
economic issues, including a PKR 34 billion (USD 439.28 million)
poverty alleviation plan and the need to eliminate oil and energy
subsidies, increase the electric power grid capacity, and advance
agricultural assets. President Zardari also said he saw a new
beginning for the economy, marked by renewed investor confidence and
a resumption of foreign investment. The speech did not contain
details for achieving these goals and did not reassure either the
domestic or the international audience that the government has a
strategy for addressing the rapidly deteriorating economic
situation. End Summary.


2. (U) On September 20, newly-elected President Asif Zardari
addressed a joint session of the Parliament. This keystone speech
covered a range of topics but lacked any comprehensive strategy on
how to aid Pakistan's failing economy. The following is an excerpt
of the speech which was delivered in English, as it pertains to
economic issues, from President Zardari's first Presidential
address.


3. (U) Begin excerpt quote:


4. (U) POVERTY.


5. (U) Madame Speaker, Honorable Members of Parliament, the greatest
challenge this government faces is an economic one. No elected
government can survive the prospect of its people going hungry. The
immediate and most urgent task before the Government is to provide
food security to the common man burdened with the rising prices of
food items.


6. (U) But we must realize that given the global oil and food shocks
we face today, and the neglect of the Agricultural sector over the
past nine years, this will not be enough to take the edge off the
growing poverty our people face. To provide immediate relief to the
poorest of the poor, the government has introduced welfare schemes
across the board, with no political strings attached, like the
Benazir Income Support Scheme for which a budgetary allocation of
Rs. 34 billion has been made in the current Financial Year.


7. (U) The ban on trade unions has been removed and the minimum wage
of an unskilled worker has been increased.



8. (U) ECONOMY.


9. (U) Madam Speaker, I do realize that all this is not enough.
Undoubtedly, your government inherited an economy that was driven by
pure consumption, and as such was saddled with huge liabilities of
unpaid subsidy-claims on account of petroleum products, power
tariffs and luxury imports. The subsidies on oil and gas that we
have removed is something no political government wants to shift,
but this bitter pill we had to swallow because our balance of
payments account could not sustain the expenditures of the last
regime.


10. (U) I see a new beginning for our economy, marked by a program
of restoring investors' confidence, resumption of foreign
investment, gradual build-up of reserves, exchange rate stability
and, above all, revival of sustainable growth.


11. (U) ENERGY.


12. (U) Madam Speaker, I am aware of the harsh reality that Pakistan
is passing through an acute energy crisis due to a serious shortfall
of electricity. Unlike the last government, which did not install a
single new Megawatt in seven years, our Government has taken
immediate short and medium term measures to address the issue. We
cannot take Pakistan out of darkness in one month, but we can
certainly do it by the end of the next year.


13. (U) AGRICULTURE.


14. (U) Madam Speaker, the government needs to set core priorities.

ISLAMABAD 00003095 002 OF 002




15. (U) I believe that the vast and rapidly changing agriculture
sector offers enormous opportunities to hundreds of thousands of
rural poor to break the vicious cycle of poverty.


16. (U) Agriculture-led growth will raise farm incomes, lower food
prices and generate the surplus for exports that we so urgently
need. Therefore, agriculture needs to be placed at the top of the
agenda for ensuring food security on a long term basis, generating
jobs and income for a vast majority of people living in the rural
areas of the country. For the first time in the history of Pakistan,
the government is looking at crop-insurance schemes.


17. (U) End excerpt quote.


18. (SBU) Comment: Zardari met with a high level visiting delegation
including Monshin Khan, Director for the Middle East and Central
Asia from the International Monetary Fund the previous day, in which
he was reportedly urged to use the national address as a platform to
convey a comprehensive strategy on how to stabilize the Pakistani
economy. Zardari, speaking in English, did not to use his national
address to reassure international donors, investors, or Pakistani
citizens about the rapidly deteriorating economic situation. With a
very small portion of his speech devoted to the economy and only
vague measures enumerated, Zardari's speech did not provide comfort
on economic measures for upcoming meetings with U.S government or
World Bank officials. Particularly in light of the bombing of the
Marriott hotel and given the myriad of issues facing the PPP-led
government, garnering high level attention on the economy has been
slow in coming and may not yet be prioritized as appropriately as
donor countries would prefer. End Comment.

PATTERSON