FROM THE OFFICE OF PUBLIC AFFAIRS

Good Afternoon.  Assalam-u-alaikum.   Thank you for a warm welcome to Lahore University, and thank you for your kind hospitality in this holy month of Ramadan.  I consider it an honor to visit the nation of Pakistan, to recognize the friendship between the Pakistani and American people, and to speak with you about the shared aspirations of our people: peace, security, and prosperity.

My visit to Pakistan is proving a wonderful opportunity to learn more about Pakistani culture, and it has also been a great opportunity to see and understand the challenges our peoples must face together, if we are to speed economic development in this nation, this region, and throughout our world.

It is also a special pleasure to meet with students today.  I believe that economic growth and prosperity are founded on the exchange and realization of ideas – and it is in institutions of education, such as this one, that so many ideas are created and shared.  Even more fundamentally, exposure to new ideas, discussion of them and reflection on them, is the basis for the life of the mind that educated men and women hold dear. 

I am not a scholar of Islam, but I know that the Koran makes more references to “ilm” – knowledge – than all but two other words.  There can be no doubt that learning is at the center of all civilization.

As Mohammed Ali Jinnah said in 1941 to a Muslim Students Federation: "There are at least three main pillars which go to make a nation worthy of possessing a territory and running a government. One is education. Next, no nation and no people can ever do anything very much without making themselves economically powerful in commerce, trade and industry. And lastly, you must prepare yourselves for your defense."

You who are pursuing knowledge, and are specifically pursuing knowledge of business management, are preparing to contribute to your nation’s strength in both education and industry, combining two of these pillars.  I applaud you for it.  In your support for our peoples’ shared struggle against terrorism and terrorist financing, you are contributing to the third pillar as well.

Today I would like to share with you a few of my observations in the worlds of business and economic development, and consider how these may apply to your careers, and the challenges facing your country.

Let me start with the most general observations.  As I have traveled the world over the last quarter century, both as a leader of major industrial companies and as a leader in the United States government, I have been struck by two things.  First, there can be no question that human beings everywhere, with education, training, and a stable social environment, can perform value-adding work at levels that match the best in the world.

That means they can earn compensation that brings personal independence and allows them to pursue the good life for themselves and their families.  Human beings everywhere have in them the ability to achieve the same high standard of living.

My second observation is this: in spite of a common potential for achievement, the disparity of living standards among the world's people is so vast it defies the imagination of those who have not seen it for themselves.

I ask why.  Why is it, if all people have the capacity to create a good life, that so many billions live today with little hope for what we know is possible?  I believe this is the question for us and our time, and it is a question whose answer shall be found not only in the high councils of governments, but in the institutions of learning such as this one, and in the companies you will launch and lead.

If you have studied the economic history of the last 300 years it is easy to see that there is no absolute limit on world economic product.  Every business student should understand that economic prosperity is not a sleight of hand – one man or woman taking from another.  Economic prosperity is an act of creation.  The world’s economic bounty is limited only by our imagination – our ability to conceive new ideas for value creation, and our ability to lead people to work in harmony, to make those ideas into a productive reality. 

Education is clearly one of the keys to business success, and more broadly, for economic development.  It is important not only at the graduate level, at Lahore University and elsewhere, but at every level and every age, beginning in early childhood, for men and women alike.  Pakistan must devote resources to schools and curriculum throughout the nation, in the cities, and in the countryside, especially to improve literacy among girls and women.  Today, over 70% of Pakistani females over age 15 are illiterate – one of the highest percentage of female illiteracy in South Asia.  41% of Pakistani girls ages 11 to 15 are enrolled in school, a low point among South Asian nations. 

I believe that every child should be literate and capable in basic mathematics by age 10.  Early education creates the foundation for achievement later in life, and allows individuals to contribute more to the economy and the society.

Of course, education is not the only requirement for a nation to achieve its economic potential.  To unleash the potential of an educated people and the private sector, the leadership of the nation must make a strong commitment to ruling justly, encouraging economic freedom, and investing in people.  A just and stable social environment that combines these elements is not an option, it is a necessity.

Ruling justly means enforcing laws and contracts fairly, respecting human rights and property rights, and fighting corruption.  Encouraging economic freedom means removing barriers to trade with neighbors, opening economies to investment and competition, pursuing sound fiscal and monetary policies, and divesting government from business operations.  Investing in people means providing clean water and the best possible systems health care, and as I have emphasized, education. 

Over the past fifty years the world has seen that these principles work, as long as a nation’s leaders are committed to pursuing them, and as long as those leaders are held accountable for measurable progress. In centuries past, enlightened rulers implemented these principles.  For example, I visited Lahore Fort today, built by Akbar the Great in the 16th Century, the Mughal Emperor known for ruling this land justly, enforcing its laws fairly, respecting all religions and defending human rights.  I also visited the Divan –e-Aam, the Hall of Public Audience, built by Shah Jahan, to encourage the public’s participation in how their empire was run. These examples of tolerance and justice are relevant even today.

As future business leaders of Pakistan, and students of management, I am certain that you can appreciate the importance of each of these principles.  For example, any business requires capital to grow.  Yet capital is a coward.  Investors are reluctant to put their capital into a company if it exists in a place where capital, contracts, and property rights are not respected.  Understandably, they will not chance losing their investments to corrupt officials, or to public or private theft.  I am not only speaking about international investors.  I am speaking about any individual, even in the smallest village, who has savings that he or she would like to invest and put to work.  Families that cannot trust their local banks, or local officials, will protect their savings at home when that money could be invested, fueling the economy.

As a result, without just rule, the leaders and entrepreneurs who would deploy new ideas, create jobs, and raise standards of living cannot obtain the capital they need, or they must pay an exorbitant cost for that capital.  Economic growth falls short.

Just rule is also important for alternative forms of capital, such as microfinance – small loans to entrepreneurs, especially those who are female, poor, or rural.  I had the privilege of attending a world summit on microfinance in New York last week, which First Lady Begum Sehba Musharraf attended on behalf of Pakistan, and I believe Pakistan is making progress on improving access to capital for the smallest businesses.  This morning I visited a women’s sewing workshop in Natt Village funded by microcredit, and their accomplishments were inspiring.  With 5000 inhabitants, Natt has no functioning school and women have little access to education or income generation.  Now, thanks to the leadership of Shaheen Atiq Ur Rehman, the community offers vocational skills training and literacy programs.   Rehman bears witness to something I believe very strongly – that it takes homegrown entrepreneurs and small businesses to create the knowledge in a community that is the foundation for economic success.

Economic freedom is the second key element of an environment that enables individuals, families and whole societies to prosper.  Individuals must have the freedom to pursue new ideas for production, investment and trade without having to ask permission from a seemingly endless series of officials in a bureaucratic gauntlet.  Laws should allow competition and creativity, so that consumers free to choose among products force businesses to innovate and improve the quality of what they produce, and in so doing improve productivity and create jobs. 

Economic freedom also demands lower barriers to regional trade.  Trading costs are naturally lowest with one’s closest neighbors.  The two largest trading partners of the United States, for example, are Canada and Mexico.  I hope for a day when Pakistan and its closest neighbors – Afghanistan and India – will enjoy more fully the benefits of open regional trade.  Neighbors have much to offer and to gain from each other. 

The third element of a social environment that invites prosperity is investment in people.  Education is an essential aspect of human investment, as I have discussed.  Health care and clean water supplies are also crucial.  Public leaders must dedicate themselves to investing public monies in the public good and ensuring that those investments are done right, so they actually make a difference in the lives of citizens.  All of society reaps the returns of such investments.

At the beginning of my remarks, I quoted Mohammed Ali Jinnah, and his three pillars of a worthy nation.  I have spoken of the pillar of education.  I have also spoken of the pillar of strength in commerce, trade, and industry, and of the close links between these two pillars.  Before I close my remarks, I would also like to mention our nations’ shared interest in the third pillar, of defense. 

The freedoms we all enjoy, the rich cultures we each treasure, and the prosperity we all seek are all threatened by terrorism.  Terror is the enemy of civilization – of every civilization, regardless of culture or religion.  We in the United States are a friend to all religions and cultures of the world.   We believe that all the civilized people of the world, whatever their religion or culture, are bound together by their shared desire to eliminate the threat of terror.  The ties of trade, of history and of friendship make America and Pakistan partners against the terror that threatens all of our freedom.

We fight together against an enemy that corrupts the language and values of a great religion, to serve a cause of mindless and heartless hatred.  As we are served by education and the free exchange of ideas, they are served by ignorance and fear of those who are different.  The people of the United States appreciate Pakistan’s commitment to the war against terror, and the war against those who would knowingly finance terrorist activities.  Just as education – just as “ilm” – is the key to prosperity, it is also the ultimate weapon to ensure that one day soon, terror is no more.  In that spirit, I believe we can bring peace and security to this region and our world, and with it, prosperity for all.

My travels here and around the world have given me great hope for the future of economic development in Pakistan.  Given the great potential of the Pakistani nation, I am confident that with a strong commitment to education and a leadership that is devoted to ruling justly, encouraging economic freedom, and investing in people, Pakistan will achieve a new level of prosperity – not in the next generation, but in this one.

Thank you, and a blessed Ramadan to all.