Dr Ishrat Hussain

Rabeea Shahzad interviewed Dr Ishrat Hussain, the dean and director of the Institute of Business Admisistration. Dr Ishrat Hussain became the dean and director of the Institute of Business Administration (IBA) Karachi on March 12, 2008. Previously, he was chairman of the National Commission for Government Reforms (NCGR) at the Prime Minister’s Secretariat in Islamabad. He also had the status of a federal minister. In that capacity he completed a comprehensive report on the re-organisation of the government’s structure, processes and human resource management policies.

Dr Ishrat Hussain became the governor of State Bank of Pakistan in December 1999. During the next six years, he implemented a major programme for restructuring of the State Bank and steered the reforms of the banking sector, which are now recognised by the World Bank and International Monetary Fund (IMF) to be among the best in developing countries. In recognition of his services he was awarded the prestigious award of Hilal-e-Imtiaz by the president of Pakistan in 2003. The Banker Magazine of London declared him as the Central Bank Governor of the year for Asia in 2005. He received the Asian Banker Lifetime Achievement Award in 2006.

For over two decades, between 1979-1999, he served in various capacities at the World Bank in Washington DC. The positions he occupied at the bank, included country director for Central Asian republics; director of the poverty and social policy department; chief economist for the East Asian and Pacific region; chief economist for the Africa region, division chief of debt and international finance and resident representative of Nigeria.

Dr Ishrat Hussain was selected for the elite Civil Services of Pakistan in 1964. He served in the field and also held mid-level policy making positions in Bangladesh (then East Pakistan) and in the finance, planning and developing departments in the Government of Sindh until 1979.

Dr Ishrat Hussain has maintained an active scholarly interest in the development and globalisation issues. He is the author of a dozen books, contributor of 15 chapters in edited books and more than 25 referred journal articles. Two of his books ‘Pakistan the Economy of An Elitist State’ and ‘Economic Management in Pakistan: 1999-2002’ published by the Oxford University Press are widely read in and outside Pakistan. He is regularly invited as a speaker, resource person, panelist or chairperson at international conferences/seminars/workshops in different parts of the world held under the auspices of the World Bank, IMF, UN agencies, research institutions, think-tanks. He has so far attended 100 such events.

Dr Ishrat Hussain is the Higher Education Commission’s (HEC) distinguished national professor of economics and public policy, and he is also the HEC Social Sciences Council chairman. He is currently part of the board of trustees of the Aga Khan University, Senate of Pakistan Institute of Development Economics, National School of Public Policy and Mahbub-ul-Haq Centre for Human Development. He was a member of the Steering Committee on Higher
Education appointed by the president of Pakistan in 2003.

Dr Ishrat Hussain received a Masters degree in Development Economics from Williams College and he finished his PhD in Economics from Boston University receiving the International Student Award for outstanding academic achievement. He is a graduate of the Executive Development Programme, jointly sponsored by the Harvard, Stanford Universities and INSEAD.

RS: First of all I would like to know, how did you start your career,
also tell us about your first job
and why you chose it?

IH: I appeared for my Civil Services examination in 1964, and obtained the 6th position. On the basis of my result I joined the service. In 1966, after completing my training I worked as an assistant commissioner at Khairpur, STM at Nawabshah and STM at Shikarpur. At that time, we used to have postings in East Pakistan as well as West Pakistan, so in 1967 my entire batch got posted in East Pakistan and I was assigned the designation of STO at Patwakhali, then I served as an additional deputy commissioner at Chittagong, and then as deputy secretary home at Dhaka. After completing two years there, I returned to West Pakistan and I was appointed as a deputy secretary of services and general administration in Lahore, apart from that, I was a member of a team that was working towards breaking up the one unit. We divided West Pakistan into four provinces and when the Sindh government came into being in June 1970, I am proud to say that we laid the basis and the foundation of that government. I was deputy secretary SNGD, after that I was deputy secretary finance, and then deputy secretary planning and development. Later, I went to America to attain my Masters Degree in Economics and then after coming back to Pakistan I was appointed as additional secretary finance, additional secretary planning and development and director of regional planning organisation. I then went for my PhD to Boston University and after that I joined the World Bank.

RS: You worked at numerous posts before going for your Masters, then you came back and worked again and then once more you went abroad for your PhD. You did your Masters and PhD in economics, so were you interested in economics since the beginning?

IH: Actually, my Degree from Boston University was in Chemistry. After that I went to the University of British Columbia in Canada. But I realised that since I had taken up Chemistry, I would have to spend my nights working at the laboratory and I had a very out-going personality. I was the vice president of the union, I had received numerous prizes in debates and I enjoyed interacting with people. So, I thought I couldn’t separate myself and spend all of my time working in a laboratory. I didn’t think it was right for me and that’s when I decided to take the Civil Services exam. When I appeared for that exam, I realised that the chemistry I had studied in university was of no use whatsoever in this particular field. That’s when I thought I should specialise in economics and finance, and for that purpose it was first necessary for me to equip myself for it. Therefore, I first got my Masters Degree and then later my PhD in Economics.

RS: Now let’s talk about your experiences. You joined the World Bank and you worked at various different posts there and you also worked at different projects. How was your experience at the World Bank?

IH: I think that the chance I got of working in fifty different countries of the world gave me plenty of experience about everything and it proved highly beneficial for me. Usually, people say that I might not know of anything that has been or is going on in Pakistan, because I have been abroad and I have been working for the World Bank. The truth is when you work on the problems and difficulties of a country, other than your own, at the back of your mind you always think that if Pakistan was ever facing a similar problem or issue, how would we tackle it? You always try to find out what is the applicability of those issues in Pakistan, and how can the country avoid the mistakes that are being made. This becomes your second nature because we are Pakistanis and we know that wherever we are, one day we have to go back and serve our country. All of my experiences from Africa, Latin America, China and East Asia proved to be extremely beneficial for me when I came back to Pakistan, and got a chance to serve the State Bank of Pakistan. I knew how all these countries had tackled and overcame the various problems they had faced and how we could adapt to those problem-solving skills here. Your capability and competence increases considerably because of international exposure.

RS: So you chose to work for the World Bank, gain experience and then come back to Pakistan or did it just happen for you this way?

IH: No, I had been in the Civil Service, so I knew I had already decided that I was going to come back to Pakistan and serve here. All I was looking for was a good opportunity. I wanted to come back and gain such an opportunity so I could apply everything that I had learnt while I was abroad. I got this chance in 1999 when I was offered the governorship. I thought Pakistan is in crisis, so I should go back to my homeland and serve it in whatever way possible. People kept complaining about what’s going on in the country, but how can anyone make a difference if every one just sat in a corner watching it all happen. You have to take the plunge and you have to take a risk, and I think those who take risks are always successful, as compared to those who sit on the fence and watch it all as it happens.

RS: You served the State Bank of Pakistan for six years as a governor and you even got an extension and kept on working. When you came back to Pakistan in 1999, the country was in crisis, the reserves were in a bad position. You worked on them and you helped rebuild them as well. How was that experience? What tools did you use to rebuild such low reserves?

IH: Our biggest problem at that time was that we were drowning in a sea of loans. People lose their confidence when their nation is in debt. Pakistanis as well as people of other countries lost their confidence this way, they did not know how to make both ends meet and how to fulfill the basic necessities of life. No one was ready to invest in Pakistan, and our Pakistanis were taking all of their money abroad. Here confidence building played a very essential role. We started thinking of how to restructure the loans in such a way that they could stay equivalent to our payment capacity. If we had the capacity of $3 billion then our payment capacity should be such that we can return that money on time. It shouldn’t be such that our payment capacity is just $3 billion, but the loan is of $6 billion because in such case we would eventually become defaulters, and people would refuse to bring their money here. So first of all we composed a program with IMF and by the grace of God this was the first program that actually reached it’s goals. Pakistan’s reputation at that time was such that this country never reaches its targets. But this was the first program where we managed to achieve all of our targets and on the basis of that the Paris club restructured our bilateral loan of $12 billion. They structured it in such a way that we got a span of 8 years and 15 years to pay the loans back, and because of this our payment capacity got better. When this happened, we decided to buy the remittances of the Pakistani workers in Dubai and this would in turn improve the condition of our reserves, previously, it was being done by moneychangers. On one hand we lowered our expenditures and on the other we started working towards increasing our reserves, and we started bringing in the money through official channels. People are of the opinion that the events of 9/11 changed the fate of Pakistan completely, but the fact is that in June 2001, three months before the 9/11 incidents Pakistani reserves had reached the $3 billion mark. They had increased from $400 million to $3 billion and all this happened before September 11.

RS: Thank you so much for your time.

IH: You are welcome. *

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