INTERVIEW WITH SAEED AZIZ KHAN, FORMER CEO ASKARI INVESTMENTS

KAHLIL AHMED
(feedback@pgeconomist.com)
June 6 - 12, 20
11

PAGE: TELL US SOMETHING ABOUT YOURSELF.?

SAEED AZIZ: My working life started in the early eighties (1981), and my career evolved with the global money and capital markets in which I was actively involved as a trader/dealer/specialist until my return home in the mid nineties. I had extensive exposure to the global foreign exchange and fixed income markets and some exposure to the global equities markets, as I worked with bank treasuries at BCCI, and Citibank. I got involved extensively with the derivative products ensuing from these markets and managed proprietary positions in a variety of financial instruments. Since my return home about 15 years ago, I have remained involved with the money and capital markets, albeit mainly locally, initially with a brokerage firm (InvestCap), where I was a founding director, and later with an asset management company (Askari Investments), where I was CEO.

I went to school at Aitcheson College and St. Anthony's in Lahore, followed by Habib Public School in Karachi, and ended up doing a high school equivalence in Romania. I graduated in Business Administration from the University of Montana in the US.

PAGE: WHY HAS THE SAVINGS TO GDP RATIO GONE DOWN IN PAKISTAN?

SAEED AZIZ: I am not an economist, but have naturally followed the causes and effects of economic events due to the nature of the work I have been involved in. As far as savings to GDP ratio is concerned, empirical studies have determined three major variables that affect this ratio, and these are:

i) GDP growth rate
ii) Remittances
iii) Government current expenditure

Since these variables have been constrained, so too has the savings rate. However, we are seeing a healthy surge in remittances lately, leading to some hope of improvement. I also personally feel that the extremely high banking spreads in Pakistan disincentivize savings to an extent.

PAGE: WHAT KIND OF IMPACT HAS POOR SAVINGS LEFT ON THE ECONOMY?

SAEED AZIZ: There is an extremely strong correlation between savings and investment. A low saving rate leads to a lower investment rate and the cycle continues as it has for several decades in Pakistan.

PAGE: HOW CAN SAVINGS TO GDP RATIO BE INCREASED?

SAEED AZIZ: The obvious solution would appear to be to increase GDP growth through an increase in government direct expenditures. One must realize, however that this is easier said than done. Perhaps, a more equitable and broader based tax regime might be the key to enabling the government to do this.

COUNTRY SAVINGS TO GDP RATIO (2010)
India 34pc
China 53pc
Iran 38pc
Nepal 34pc
Afghanistan 28pc
Oman 41pc
Saudi Arabia 35pc
Sri Lanka 22pc
Pakistan 14pc

PAGE: HOW WOULD YOU COMPARE OUR NEIGHBORING COUNTRIES WITH PAKISTAN IN TERMS OF SAVINGS TO GDP RATIO?

SAEED AZIZ: I would like to add that many newly industrialized nations started off on a similar footing to ours but have, through improved governance and sound policies, made giant strides in their economies, while we remain constrained by the vice like grip of a perpetual status quo.