An economist and financier, Shaukat Aziz, served as the 17th Prime Minister of Pakistan from 20 August 2004 to 15 November 2007. He was born in Karachi on 6 March 1949. He matriculated from Saint Patrick's High School
An economist and financier, Shaukat Aziz, served as the 17th Prime Minister of Pakistan from 20 August 2004 to 15 November 2007. He was born in Karachi on 6 March 1949. He matriculated from Saint Patrick's High School and proceeded to St. Patrick's College in Karachi where he passed his university-level Intermediate courses and ascended to attend the Gordon College of Rawalpindi in 1965. Shauket Aziz obtained BS degree in Economics in 1967 from Gordan College and moved back to Karachi the same year to enrol in a master's programme. He attended the master's programme of the world-renowned Institute of Business Administration (IBA) in Karachi and obtained MBA in business administration in 1969.
While at the IBA, Shaukat Aziz secured the internship of US based Citibank, and after his master's degree, he joined the corporate staff of the CitiBank. Initially, he joined the corporate branch of Citibank Pakistan as its credit officer in 1969. During his career, Shaukat Aziz served in various countries including Pakistan, Greece, United States, United Kingdom, Malaysia, Philippines, Jordan, Saudi Arabia and Singapore.
After arriving to assume the charge of corporate assignment in the United States, Shaukat Aziz settled in New York City and took over the office operations of Citibank at the Empire State Building. He acquired Permanent residence status, but did not acquire American citizenship, whilst continuing to upgrade his legal status.
In the United States, Shaukat Aziz held numerous positions in Citibank across several divisions including Corporate and Investment Banking (CIB), Corporate Planning Officer (CPO), Chief Financial Officer of Citicorp and Managing Director of Citibank Singapore. He has been a board member of Citibank subsidiaries, including Saudi American Bank, Citicorp Islamic Bank, and of several non-profit organizations. He played a pivotal role in expanding Citibank branches and corporate directive operations throughout the country and was instrumental in bringing multinational banking industries into Pakistan in the 1990s.
At Citibank, Shaukat Aziz served as the corporate director of Asia Pacific global finance operations and had been notable for financing and managing funds on behalf of Citibank and other financial corporations in global stock markets. He was also involved with Citi Private Bank, a subsidiary of Citigroup. Shaukat Aziz regarded his career in Citigroup as "extremely helpful" in preparing him for the executive public office, in 2006.
Shaukat Aziz regularly visited Pakistan, working to expand Citibank's financial services and banking, overseeing the wide expansion of Citigroup's branches and its influence in Pakistan. In the 1990s, he worked closely with the governments of Benazir Bhutto and Nawaz Sharif to help negotiate economic relief packages and aid to Pakistan, while maintaining diverse relations with Pakistan's Armed Forces who would also visit the United States as part of Sharif's and Benazir Bhutto's state visits.
By the 1990s, he had established many notable contacts within the United States administration. In a book, Global Financial Warrior, written by John B. Taylor, Shaukat Aziz had substantial access to the US Treasury World Bank and many other world financial institutions. He worked closely with the United States in order to finance U.S. war games and operations. He knew the volumes of secretive methods of transferring funds in and out of South Asia, particularly clandestine financing of nuclear weapons programmes of India and Pakistan at its most, Taylor maintained.
After staging a coup d'état to over throw the elected Prime Minister Nawaz Sharif on 12 October 1999, General Pervez Musharraf arrived in the United States for a small personal trip. On 26 November 1999, while addressing a gathering of influential lobbyist of Pakistan American community, a political lobbying sub-body of the Association of Pakistani Physicians of North America (APPNA), General Musharraf stated that, Shaukat Aziz has come to Pakistan with forty other financial experts who have offered free service to revive the Pakistan's national economy. After a brief session, Musharraf asked Shaukat Aziz to stand up and introduce himself to the audience.
Shaukat Aziz reportedly returned with General Musharraf in November 1999 and took the charge of Finance ministry as its Finance Minister. He took control of the economy with responsibility for Finance, Economic Affairs, Statistics Division, Planning and Development, and revenue divisions. As Minister of Finance Shaukat Aziz also headed the Economic Coordination Committee of the Cabinet, the Cabinet Committee on Investment, the Executive Committee of the National Economic Council, and the Cabinet Committee on Privatization.
During his first few days, Shaukat Aziz worked to control the economy in a difficult and a hostile environment with then President Rafiq Tarar who called him "an Alien", and many among those who were close to deposed Prime Minister Nawaz Sharif and Benazir Bhutto. Other politicians including Fazal-ur-Rehman and Ameen Faheem became hostile towards Shaukat Aziz and his policies and harboured grave doubts about him because he was not like a traditional politician in the country.
Initially there was a decline in the economy, and Shaukat Aziz attributes this as state’s (Pakistan) unpleasant relations with international financial institutions. There was a 70% decline in the national economy with the loss of $150 million (1999) to $600 million (2000), which constituted 0.21% of foreign direct investment (FDI) global flow. Shaukat Aziz took initiatives for FDI offering incentives to foreign investors with his macroeconomic policies, taxation framework and a consistent investment policy.
After the 11 September attacks in the United States and Pakistan's role in the War on Terror, he travelled to United States in order to negotiate a relief and U.S. aid to Pakistan. Shaukat Aziz closely worked with US Secretary of the Treasury on the detail of the devised plan on how to remove Taliban from Afghanistan, cancellation and debt relief, loans from the World Bank, and direct support from U.S. Aid for national public development. Shaukat Aziz recommended policies and new plan of economic reforms, including the improved budgetary transparency and spending controls, a plan that was widely accepted by the United States. With the help from United States Department of the Treasury, Shaukat Aziz thwarted individuals, difficulties and obstacles to achieve success in his economic programmes. In 2001, Shaukat Aziz was also named "Finance Minister of the Year" by Euro-money and Bankers magazines.
In 2002, Shaukat Aziz worked with US administration to help, advised the United States to finance the war in Afghanistan. In the words of John B. Taylor, Shaukat Aziz suggested that US should called out for a meeting of finance minister of the G7 member countries, where the illicit funding of money would become a great problem for G7 countries later in future. In April 2002, Shaukat Aziz chaired a historical meeting on behalf of Pakistan and United States, helped the G7 members to understand the useful information how the illicit money is transferred was shared with the finance ministers of G7 members and Pakistan on other side.
Shaukat Aziz implemented and activated the Privatization Programme (first founded by former Prime Minister Nawaz Sharif in 1991) and opened all state-owned enterprises (SOEs) to private sector. This programme undertook the country into rapid economic growth and extreme level of industrialisation the country had for yet seen since 1972. After the 2002 general elections, Shaukat Aziz intensified his programme and aggressively implemented economic liberalisation policies in the country. His financial policies came under surrounding controversies, creating new problems for Prime minister Zafarullah Khan Jamali to counter, who was forced to resign the office in his favour. His affordable real estate scheme encouraged common men to afford a house and a vehicle on low investment.
By 2004, Shaukat Aziz had become a right hand of general Musharraf, as Musharraf described in his memoirs. The strong oligarch business class of Pakistan, notable Chaudhry Shujaat Hussain, had been impressed by Shaukat Aziz's performance as finance minister. Following the resignation of Mir Zafarullah Khan Jamali on 6 June 2004, Hussain nominated Aziz for the office of Prime minister and was also a top choice for the candidacy of Prime ministerial post by Musharraf.
However, Shaukat Aziz was not a member of National Assembly, although a Senator. As required by the constitution, the prime minister was required to be a member of National assembly. He was highly regarded as technocrat and had gained trust of establishment, international institution and the public support. His nomination came after another technocrat-economist, Dr. Manmohan Singh, who became the Prime minister of India and widely seen as compatible to Indian counterpart.
The post was held by Chaudhry Shujaat Hussain while Aziz fulfilled the constitutional requirement of securing a seat in the lower house of parliament. Shaukat Aziz ran from two constituencies, Attock District and Tharparkar-I in Sindh. While campaigning on 29 July 2004 he survived an assassination attempt in the small town of Fateh Jang in Attock District. A suicide bomber blew himself up next to a car in which Aziz was travelling, killing his chauffeur and eight others. However, Aziz continued campaigning and won from both constituencies. Since he could retain only one seat, he immediately vacated his Tharparkar seat, preferring to represent Attock, where he had won by 76,156 votes to 29,497.
Shaukat Aziz was elected Prime Minister by parliament on 27 August 2004, by a vote of 191 to 151 in the National Assembly of Pakistan, and was sworn in on 28 August 2004. Pakistan Media labelled him as “Short Cut Aziz” because of lack of political background and hardly affiliation to any political party and still managed to land on the Prime Ministerial Office. Whilst, international media labelled him urban gentlemen, as he was soft-spoken and greeted his guests with great gesture and manners.
Having described and labelled as urban gentlemen and smartly dressed, Shaukat Aziz was tasked with day-to-day running of the federal government and to see that policies were more effectively executed while General Musharraf handled the military issues. In Pakistan, it was also said that Musharraf eye-blindly trusted Shaukat Aziz and sometimes, Musharraf's approvals did not needed for the projects that required permission. Shaukat Aziz quietly and more quickly undermined the elements seeking to undermine Musharraf which may have been a factor that Musharraf had eye-blindly trusted Aziz.
He retained his position as Finance Minister. His government introduced and featured extremely qualified and new faces in the political area of the country, including Hina Rabbani Khar (economic ministry), Hafeez Shaikh (investment ministry), Khurshid Kasuri (Foreign ministry), and Atta ur Rahman (as science adviser). Many of these technocrats ascended to join the successive governments and embarked on successful career in the politics thereafter.
Shaukat Aziz successfully oversaw the rapid development of the local government system in Pakistan as part of his "Strengthening Decentralisation" programme. His domestic initiatives including the decentralisation in the country, and termed the local government system as "more transparent and accountable".
Shaukat Aziz strengthened the policy formats and area of responsibility of National Reconstruction Bureau (NRB) after appointing Daniyal Aziz in 2005. Shaukat Aziz carried out major reforms in Law enforcement agencies, Police forces, and court system in the country. In 2005, his government installed 6,000 water supply and sanitation filter plants through the Khushal Pakistan programme, a scheme founded by Nawaz Sharif in the 1990s. As Prime Minister, Shaukat Aziz took hard stance against rivals and took a hard-line against his political challengers. Shaukat Aziz thrashed the Alliance for Restoration of Democracy (ARD) led by conservative leader Javed Hashmi who was placed in military prison on treason charges. His hard-line and tough counter active measures forced Pakistan People’s Party of Benazir Bhutto and Pakistan Muslim League-N of Nawaz Sharif to concede their defeat and took asylum in United Kingdom.
In Islamabad alone, Shaukat Aziz's government was forced to take military action, codename Silence after chairing a meeting with the President. In 2009, he maintained that his government had tried at every level of extreme to resolve the Lal Masjid issue through talks to save lives. In a television interview, he maintained that, we gave them time to leave the mosque and the Imam-e-Kaaba Abdul Rahman Al-Sudais also came to Pakistan on my request in connection with the issue.
One of the widely reported controversy took place in his government was the atomic proliferation scandal of Dr. Abdul Qadeer Khan. Shaukat Aziz remained supportive towards Dr. A.Q. Khan and efficiently took matters of Dr. Abdul Qadeer Khan in 2006 from President Musharraf. On 10 September 2006, Shaukat Aziz sent flowers and personally visited Dr. Qadeer Khan when he was hospitalised and on 12 October 2007, General Musharraf made it clear to United States and rest of the world that Dr. Abdul Qadeer Khan "won’t be handed over" at given any circumstances. On a television speech, Shaukat Aziz paid a huge tribute to Dr. Abdul Qadeer Khan.
In 2007, Shaukat Aziz further diversified his nuclear energy policy, terming it as "criteria based nuclear technology" while continued financing the nuclear power projects. He presided initial construction of major hydroelectric power plants project in Pakistan, such as approving the Diamer-Bhasha Dam. Its foundation was laid by his successor Yousaf Raza Gillani in 2011. In 2004, Shaukat Aziz directed the Ministry of Water and Power and Planning Commission to prepare an integrated energy plan for the country. He approved the "Vision 2025 programme" of Water and Power Development Authority (WAPDA) to produce power through water. The programme was intended to be launched with the help of private sector and private funding through the international megaproject. However, all projects were cancelled or either put on hold by the upcoming government of Yousaf Raza Gillani due to economic distress, lack of capital and investment and continuing economic declines, leading an increasing circular debt.
Shaukat Aziz oversaw the successful development of fighter programme of JF-17 Thunder in a record time, built with the close cooperation with China. In 2007, he stressed that Pakistan is not an offensive country and our defence doctrine is based on having minimum credible deterrence to maintain peace and stability in the region. He also successfully saw the technology transfer and contract development of first combatant frigate, the F-22P Zulfiquar. In May 2006, Shaukat Aziz stressed that, Pakistan's deep military and economic cooperation with China was one, not based on, transient interest but was higher than Himalayas, deeper than oceans and the JF-17 Thunder is a Pakistan's proud programme and a unique example of cooperation and friendship between the two countries.
In August 2006, Shaukat Aziz visited People's Republic of China, seeking Chinese cooperation in space technology. China can help Pakistan in developing and launching satellites. In a joint statement of Prime Minister Shaukat Aziz and Chinese Premier Wen Jiabao, Shaukat Aziz emphasised that: “both countries are determined to elevate their friendship and strategic partnership”. A contract was signed with China, Shaukat Aziz authorized the development of the satellite, Paksat-IR. Shaukat Aziz presided the security, expansion and modernization of country's nuclear deterrence programme as part of his defence policy. Shaukat Aziz oversaw the successful development of Shaheen-II missile programme and witnessed its first flight at an undisclosed site in April 2006. After witnessing the test, he maintained that: "We will continue to pursue vigorously our security and energy needs from all sources including nuclear". On 8 August 2005, he issued directives to tighten the security and control and command of the National Command Authority and ordered strict monitoring of atomic assets and facilities at all levels of command.
Prime Minister Shaukat Aziz stated and clarified the nuclear policy to the world and India in an interview given to Times of India: Pakistan's strategy of "Minimum Credible Deterrence" guarantees "peace in the region", and the nuclear weapons programme is moving "strength to strength".
From 2005 and onwards, Shaukat Aziz's government took major steps against atomic proliferation while on the other hand made several decisions to increase the capacity of nuclear deterrence on military deterrence and to sufficient use of nuclear energy for civil sector.
On Foreign fronts, Shaukat Aziz closely collaborated with Musharraf while working onto developed the geo-strategy in the region. He took initiatives to strengthen the relations with United States, European Union, Russia, India, China, and Saudi Arabia. Under his government, the state's relations with the United States were extremely cordial and friendly. His foreign policy strictly pursued and followed a Balanced Foreign Policy (BFP) programme with an initial goal to forge robust friendly ties with international community, US and European Union (EU).
Accompanied with Tayyip Erdoğan of Turkey, Shaukat Aziz travelled to Iran in 2006, and privately told Iranian President Mahmoud Ahmadinejad to must change course regarding its nuclear program, as the current direction was neither in Iran’s nor the region's interest. He urged Ahmadinejad to immediately place a moratorium on uranium enrichment while on the other hand Erdoğan described the EU-3 proposal, with Russian enhancements, as a very attractive offer for Iran. Both Shaukat Aziz and Erdoğan condemned Ahmedinejad’s statements attacking Israel as completely unacceptable and serving no purpose.
During his tenure relations with Japan considerably improved and after visiting Japan, Shaukat Aziz welcomed the investment in the manufacturing sector and Pak-Japan joint ventures in steel manufacturing as an excellent symbol of cooperation in expanding steel production between two countries.
Shaukat Aziz paid a farewell visit to South Korea to strengthen and enhance the relations with Pakistan. He cautiously supported South Korea's stance while refrained to criticised North Korea. On a three-day state visit, Shaukat Aziz and his counterpart Lee Hae Chan signed two agreements on cultural exchange and providing human resource management, and improving trade and cultural ties between South Korea and Pakistan.
He strongly allied with the United States in the fight against terrorism, and in a meeting with the American journalist, Shaukat Aziz maintained that, Pakistan is now ideally positioned to work with cooperation rather than confrontation as a force for peace, stability and prosperity. During his tenure, the relations with the United States strengthen and progressed.
During his tenure, bilateral relations with the United Kingdom were enhanced and reached to a new level after meeting with British Prime Minister Tony Blair in 2005 and tightened the economic and defence relations with British counterpart Gordon Brown in 2007. Brown thanked Shaukat Aziz for the successful launching of $500 million Eurobond, which was oversubscribed four times. After assuming the office of prime minister, Shaukat Aziz left for China, as his foreign state visit as prime minister in 2004. In 2007, he made his final state visit as Prime minister to China to proceed to sign a Free Trade Agreement (FTA) with China, and regarded the country as strategic partner and a time-tested friend, whilst China regarded the FTA agreement as a historic development. Shaukat Aziz built closer economic ties with India while alleviating the territorial conflicts.
Shaukat Aziz pushed his foreign policy to Russia, and calling Russia as "global Superpower". In 2006, he invited state-run and private-media of Russia where he repeatedly stressed for the need to enhance co-operation between Pakistan and Russia in the fields of education, science and technology, energy, defence and trade and investment. Finally, in 2007, Russian Prime Minister Mikhail Fradkov paid a three-day-long visit to Pakistan, becoming the first Prime minister as well as first Russian leader to visit the country in 38 years. During this trip, Shaukat Aziz and Fradkov pledged to boost economic ties and signed two co-operation agreements.
Under Shaukat Aziz's government, the country's national economic growth improved at the rate range by 6.4% to 9.0% a year. All revenue collection targets were met on time for the first time in the history of Pakistan, and allocation for development was increased by about 40%. However, this economical, success is attributed largely to debt reduction and securing the billion dollar worth US aid to Pakistan in return for the support in the US-led war on terror. Moreover, despite a series of internal and external distresses, economic situation of Pakistan improved significantly and reserves increased to US$10.7bn on 30 June 2004 as compared to US$1.2bn October 1999. Exchange Rate became stable and predictable; the inflation rate dropped to 3.5% against 11–12% in 1990.
After taking control of the economy, he aggressively promoted the privatisation, deregulation and economic liberalisation programme and opened the large heavy mechanical industries, petroleum companies and chemical enterprises and state-owned corporations to private sectors. His tenure as finance minister and prime minister, the agriculture production and construction well increased, whilst aggressively and forcefully implementing his policies to liberalise the trade, and eliminated the non-tariff barriers. Under his regime, the maximum bound tariffs were brought down to high as 300% to 25% whilst the applied tariff averages falls in the range of 5% to 10%.
The poverty alleviation programme performances indicates the successful implementation of his policies. The GDP growth which was at 3.9% in October 1999, stood between 6.6% - 9% and successfully privatised all state-owned corporations and state enterprises before completing his term. However, Shaukat Aziz's strategy failed deal with underlying problems deeply in country's economy. The global financial crises in 2008 led the sharp drop in country's economy while acute electricity shortage in the country revealed the incompetence by the Peoples Party's government, but also the failure of his government to develop the necessary energy infrastructure on time.
A banker and financier by training and extensive experience in the United States, Shaukat Aziz's credentials are extremely high and considered one of the successful finance minister of Pakistan. His credential records are similar to those of the successful US treasury secretaries, such as Bob Rubin and Nicholas F. Brady, who did well under Clinton and Reagan administrations. He understands the role of banking, finance, investment and consumer credit in economic growth of a nation. Shaukat Aziz presided over the strong banking sector, unprecedented investment and growth finance sectors in Pakistan to underpin its economy. He strengthened capital availability, an essential and increasingly important economic input, in addition to labour and land improvements. With higher education budget up 15-fold and overall education spending up 36% in two years, he focused on education to improve the availability of skilled labour to fill new jobs.
As Prime minister and as well as finance minister, Shaukat Aziz did extraordinarily well. Statistics on Pakistan's economic growth grew at 8.4%, the second fastest growing economy in the world after China. (Richard Haas, 2006)
Shaukat Aziz aggressively pushed land development and public and private construction spending to improve infrastructure and facilities to attract greater business investment. The international communities regarded him as a reformer, with Pakistan's structural reforms ranking high amongst emerging economies. Shaukat Aziz co-chaired the Secretary-General's High Level Panel on the United Nations System-wide Coherence in the areas of development, humanitarian assistance and the environment. He oversaw the success of the privatisation programme in Pakistan and most of the proceeds from the telecom and banking sectors, around 80% of Pakistan's banking sector was put under the private hands.
In spite of supervising and presiding the successful economic growth at an un-precedent level, his privatisation and energy policies remains extremely controversial in public circles. Critics argued that Shaukat Aziz's privatisation policies and privatised energy sector did not fully tackle with full force in country's economy. Shaukat Aziz defended as he points out that his policies made these institutions viable while they were on the verge of collapse. An unsuccessful attempt to privatise the Pakistan Steel Mills was also thwarted by trade unions and pro-nationalization elements who took the case to Supreme Court of Pakistan in 2006. But Shaukat Aziz said that his privatisation programme produced the second fastest growing economy in the world.
By October 2007, at the end of Prime Minister Shaukat Aziz’s tenure, Pakistan raised back its Foreign Reserves to $16.4 billion. Pakistan's trade deficit was at $13 billion, exports were $18 billion, revenue generation was $13 billion and attracted foreign investment was $8.4 billion. Pakistan's fiscal performance was praised by IMF and World Bank. The World Bank further reiterated that Pakistan's Economic growth bolstered International confidence. IMF's new South-Asia director George Abed, said he was very pleased with the record of Pakistan in the past three years of continued macroeconomic and financial stabilisation and we have begun to think of Pakistan as a country of promise and a country of potentially high rate of growth. The Asian Development Bank also praised Pakistan's Micro-Finance.
Shaukat Aziz left office on 16 November 2007, at the end of the parliamentary term and became the first Prime Minister of Pakistan who left seat after completion of parliamentary term of five years.
Shaukat Aziz currently resides in Dubai, United Arab Emirates. He serves on a number of boards and advisory boards including Millennium & Copthorne Hotels plc and The Blackstone Group. Former Prime Minister Shaukat Aziz has maintained good relations with several members of his government and the members of the Parliament including his former Foreign Minister Khurshid Kasuri and former railways minister Sheikh Rasheed and his party president Chaudhry Shujaat Hussain. Shaukat Aziz remains active in political arena of Pakistan and vigorously defended his financial policies. He criticised the care-taker government of Muhammad Mian Soomro for economical-collapse, and predicted that, the next elections will sweep, paving the way for a two-party system to emerge with the Pakistan Muslim League in the government and the Peoples Party in the opposition.
Shaukat Aziz remains active on economical, issues and harshly criticised the International Monetary Fund (IMF) of failing to show leadership during what he described as a "historic" global financial crisis. While attending the international business conference at Philippines, he maintained that, this global institution (IMF) which is supposed to look at everything going on was not even in the room where meetings are going on. In 2008, Shaukat Aziz gave vehement criticism to IMF and according to him, the IMF has played a very negative role in global crises.
Speaking at the Association of Southeast Asian Nations conference in 2008, Shaukat Aziz maintains his views that the financial crisis occurred due to financial mismanagement, lack of understanding the macroeconomics principles and fragmented regulatory regimes in the world. In an interview with CNN, he remains pessimist about Pakistan's approach to Free Trade Agreement with the United States in 2012 by judging the current relations with the United States and economical, challenges faced by the country.