and it just goes on and on. .. >> the purpose in pakistan and by everyone in the community, it seems like, the energy crisis has been impact on low shedding of households. you know, shedding for 12 hours, no electricity for 12 hours, 16

hours, ect., in the summer in lahore when it's 120 degrees. i'm sure, you know, actually saying that i'm going to solve the energy problem and i'm going to solve the issue, but in quite a few votes, people are, you know, voting, but, to me, i think that's -- it's a big problem for households. the biggest problem for me, a bigger problem is the impact of the energy shortages on industry in the country. most of the big industries in pakistan are operating in iran, 50-60% capacity because they can want get electricity to operate at full capacity. people say we must grow by increasing investment. we must grow -- we must have investment, and then we'll grow. in the long run, abs one throug.

in the short run, which is what i'm concerned with here, you can, you can get operating at full capacity, and you will grow at 6-7% because with the same capital stock that you had in industry, five years ago, you were growing at 6-7%, so you don't really need -- this is a con straint. energy created a constraint. i think solving this issue of industry to households too through financial changes to changes in the management of the companies, ect., will have to be the full, but this is a physical capacity issue, and it takes awhiled to do, but try to get to the maximum capacity. you get an immediate jump in growth in that way, and i think that will be something that the

pnl would love to see, and i think that'll go. finally, my last point, the balance. foreign exchange preserves at the state bank of pakistan are down to 7 billion. they were $15 billion, more than twice that much more than two years. you know, a significant leading of -- why is this happening? when a country says we are exchanging, and in the limit, in the flexible exchange rate makes it clear you won't lose any reserve. you know, you don't have to. well, there is a fear of a shock evaluation. it has been and continues in the past, you know, if we let the exchange rate go, it drops back,

we can't have that, that has inflation, bad for the government, and so the central bank has done some very innovative, ingenious things to try to prop up the defeat, and one is, of course, that's political, but they have other things. we have done what operated in the forward market with the commercial banks. we bought, essentially, bought and sold forward, essentially, and so building up by borrowing, it's borrowing. they have the people's bank of china, doing swaps with central bank of turkey, so on. a lot of innovative things to keep enough, keep the reserve, at some level, and not -- and not that -- so this is a propping up. the question is what will this government do?

will it let the rate move? exchange rate move? well, it may have to. maybe doing it in the first few months of the next, first hundred days might be the answer. right now, it is -- the rate is up to 97. a hundred would be -- is the -- that's -- [inaudible] we have to see. one of the things to be discussedded -- discussed immediately is the issue that the government will have to deal with right away. what the imf has said, when, in april, when the government, the delegations is here. the program, the u.s. trash ri,

ect., all the right noises, yes, we're in favor, and we got to have a deal, i'm expecting that serious negotiations will take place. what happens in the serious negotiations, we can predict, it's all the things that were not done by pakistan during the previous program, tax reforms, energy reforms, and so on and so forth, even the exchange rate will become prior actions for the network. that's only net. i think, you know, with you, well-advised to quickly do this, get moving on those things, get those prior actions underway, and then go ahead and have the program. the program that people are talking about are up to $5 billion, which, if you add in other sources of financing that are conditioned on the program,

it's another five. that should give you some breathing room for it. of course, all this other, you know, actually, there's very good connections in saudi arabia, uae, so on and so forth, so there may be additional financing coming who are still, i mean, really flush with money, with liquidity at the moment. these are the sort of three areas i think, in my view, that the government has to address right away, has to get a good handle on these short time issues before it can really move to the longer term structure issues, and i'm sure they developed a plan of, you know, vision 2020, used to be vision 2010, but vision 2020, now vision 2025, whatever it is, set up a long term plan, that's find, but you got to get from here to the long term, and you have to -- these are the three

areas in my view that are the top priorities for the government to address, and you have to address these issues before they get into building new motor ways or bullet trains, so on and so forth, those are for the future, and if the government can get some of the actions on these three fronts, get them moving, i think i'd be optimistic that you can't turn the situation around in the short run with a view without moving on to the long run. okay. [applause] >> we continue the discussion.

>> [inaudible] [inaudible]

>> is a there a change in the way in which you manage, and -- >> [inaudible] >> at the same time, the egyptian and i can name two or three. we see the current problem, and

we see, you know, also -- [inaudible] reject it right now. we want to see the -- also the egyptians so i think what we are seeing is the continuing of transparency and all sort of without getting by without anything, when, in other words, they are not sufficient anymore. that's one. second, i think he is acknowledging the enormity of the challenges. he has said several times in the

past conversations that i had with him and also publicly that i don't think a single party has ever sprung or addressed the problem, and that is being a different approach. we could go beyond, and go beyond the party, and i think we see him practice this, then all the better. i think the first thing we should, you know, not related to the factor, but it is the result of the start, you know, there was an effort denieded bti the right of the government in kpk, when the initial said no, i will not be tempted, and they must have the right government, so i think there, also, he is eluding to the fact that this is a man who has, as reality, learned

from the past, and i think, you know, the theme he constitutes would give us a broad set of signals, and i have to share that it is not what they -- including the foreign minister, he's definitely going to be the finance minister. i have spoken to him, have long crvetion. he's already startedded work on getting some of the data from the finance ministry, so, you know, he has not been named yet, but he's, you know, definite starts taking dharnlg and get a grip, actually, on the numbers, which most, i don't know if you want to say something a little later, that the numbers are very -- i mean, it's not clear that the finance ministry's numbers. they have some toil. what we've seen in the last several months is a moves part, spending spree, incoming -- including, and we saw them do

other things and so, i think, you know, it's a long answer to the short question, but i think they are seeing the vast meeting, submitted in one in the hospital. these are all efforts to signal that you are going to be dealing with app -- with a strength of numbers, but prepared to go beyond the numbers to reach out, do his political performance, and just govern in a different way in which it has been productive in the past, but, you know, i think the key and the team, if this team aboard what many people regard, then what you see is a man who is determined, serious, to really resolve it, and i think, you know, there's early signals, but we have to wait and see op what else is there.

>> since you do have to go, at anpt, you feel you want to jump in on the ensuing discussion, please, do so. let me pick up op the point you raised about the numbers and sioux -- see if anyonements to respond -- anyone wanting to respond to that. >> sorry -- >> yes. >> the result, that's not new for pakistan. let's be very clear. it's more sharply polarizationally, but we had this situation in the past, and i think what we have to recognize is that the largest party does have recommendations, but he has a foothold in the prosince and won a number of in pakistan, not enough to overthrow the government, but they had a conversation to actually form a government of allies so i think, yes, the stronghold is there, but that's not all the things they have won

from. >> i'd have the am bar dore respond to that, perhaps on the numbers. has the min industry before fuming -- fudging numbers? >> no, i think what i'm saying is there's several sources of data in the country. to some extent, it's not if they are fudging numbers, but then a lot of people are, including the national institutions who also watch the numbers. i don't think they are fudging the numbers, but i say, for example, the bottom line is 9%. that's what, as a result of the spending spree that went on during the -- the first half of the year, including by the dpoft as was said. the government continues to maintain right up until the end that they would wind up with a deficit of 4.7. in that sense, you see that, you

know, they put out a set of number and stuck by them. the numbers are wrong, and they internally knew the numbers were wrong, and, you know, people like the planning commission said publicly the numbers are small, that the government is sticking to the wrong numbers. the true numbers showed a much larger deficit. i think that that -- it's -- i don't think there's been any sort of misreporting in the sense that the ministry of finance is sort of change -- is keeps producing new numbers that are very into the fact. what they've done, and what the min industry says is just sticken to the old set of budget projections trying to maintain that, when the true numbers are applied, and they know that. >> thank you. anyone else want to respond to the other comment that this is really not that sharp of

polarization? >> well, where the effect that ppp has been deduced, it's basically the -- you had a party which affects all, all across pakistan. secondly, i think, yes, there are some who the large party has, and they are true they are op the so-called elections, not the bank; right? ppp used to have all bank partners, and so the example of i would not lie to this issue of regionalization, and the hope is that these major parties are

able to deliver in the case of ppp regain its standing in the prosinces, and that the world bank also somehow increases because in a sense, he doesn't have any of the presentation from his own parties. he has good, strong allies that are functional, but that's different. it was, in fact, based on facts that i was saying that it is the politics as somewhat -- but he's right that this is not the first time -- >> let me add some numbers just for everyone's knowledge based on the data i have. it's the single largestnine sea.

the other largest group is 2 21 which is others, a hodgepodge of different groups. since, they have four seats, and pakistan that is functional have seven so they have 11 seats functional, they have a reasonable amount according to the numbers that we have from the election commission. >> just as i said, that there is still the politics. there's no such concept of world bank, and it needs to be -- g i think he wants to come in. go ahead. >> yeah, i thought i'd raise the question that many pakistani women ask, and that is that the cti displaced the people's party in terms of and get seats, but

the question that's been asked is whether this will endure, whether the people's party increasingly will be a party rather than the future, the people's party failed to adjust. it is still a party that had, i think, strong pockets of support in urban areas, but all over the years, it increasingly looked more ruling, and that means the past in pakistan, not the future. we don't have the answer to the question, but it's an interesting question whether this chain realignment of pakistani politics because that's what it is. there is a realignment of pakistani politics that's underway, and that realignment means that first of all space opened up for a new party, which was not represented in

parliament before, and space is also shrunk of other parties and factions. they will be voted off wht other faction, and his, and i think the party won't run for a start if it's gone somewhere. either they don't come out to vote or they decided to work for pt iring. in the kind of a tactic, it's interesting question too. whether this was tactical voting by people's party, let's just defeat our opponent, traditional opponent who happens to be, just go with this new challenger because we are leading this, and we have direction, and, actually, the party had nobody to campaign for them. they had no campaign. they had the four young men.

we do a conferences from whey they used to call an unknown location. he was forced into this game, and i guess he didn't respond to that. they were not somebody in pakistan who is amongst them and with them, and it doesn't work, and that also says something about dynasty. you see, dynasty, unless you earn it, i think that's the moral of the story, that even for die nays tick politics of the kind we see, you know, represented in pakistan, earn the stripes, so to speak, struggle, was in it, and here people don't just -- you can't just throw a name at them anymore, i think, and say this is in the name of -- i think people want it to end. >> thank you. i'll open it up to the audience. i got a number of names already, just bear with me. i'll try to get as many as we can in the short time at our

disposal. holland, you had your hand up. >> i'm harlan thank you very much. do you have a break down of the number of seats in the national assembly, how it seats, and how do you see the relationship evolving between the president, what is the future as far as you can see it for the ppp? >> let me say the if the numbers i have satisfy you. i assume you're talking about the three main parties? the assembly, the numbers i have, and they may not be final, final, pln with 124. the people's party or the ppp, as it's called, 31. the pti with 27. those are the numbers. >> independents? >> the independents are 31, and a lot of them are flocking to the government party so that's

going to give them the edge that we were referring to. on the presidential election and what the possibilities are, maybe somebody else can answer that. >> if i was presented, getting in touch with the travel agent. [laughter] >> i think there are a couple of efforts made by them. one, before the elections, he said that if his party becomes the party of the center, he becomes the prime minister, and he'll take it, and i think if i'm not mistaken, there was a statement by him that he should complete his -- should complete his term in office. that time, i think, is going to end in september -- >> september. >> yeah. >> yes. >> i don't think there should be any grounds for the friction on

this ground. >> the question is whether he can marshal numbers to get reelected, and the answer is no. >> there's no question, no. >> no question. that's why i said a travel agent would be a very great idea. [laughter] >> thank you. let me go to the other questions, if you don't mind, so we can move along. tom pickerring over here. identify yourself for the record. >> tom pickerring, member of the board, executive committee here. i'd like to shift a little bit away from the election itself to what the results mean, and larry with respect to the above bear, india. two or three things came out in the discussion, directed to whoever wants to pick up on it. one, it was mentioned that the strength that he has puts him in a strong position to do a lot of

things. secondly, others have mentioned the fact that there is a possible economic opening between pakistan and india. third, you said in effect that the army was perhaps less ideologically driven on the india case, if i can put words in your mouth, and perhaps more practically focused, perhaps, as well, on internal problems inside pakistan, which has been a shift we've been seeing coming for some while. what are the possibilities with india? we've seen this abundance of inviation, happy receptions, and potential travel too. what are the possibilities with india that you see? where could to go? what can we expect out of all of that? thank you. >> yeah. india in the sense that one should not nurture enthusiasm

about warming up of relationships in pakistan and india. i think the important thing is that it should be a normal relationship. there should not be hype in the negative sense which normally derails the relationship off and on. now, in this, there is one number of officials like the travel, ect., all those, the question of trade. on these things, i think in number of steps already being taken, and i do not see -- you understand the background, that he is going to reverse those things. one very important statement that i have seen from him is that he's said we will not allow mumbai repetition.

now, this is important. what is behind this thinking? this statement? what is that thinking? will it mean that pakistan and india really be cooperating at certain level in the extremist? will it mean that -- does it only mean that it's a gesture giving confidence to india, that, look, we are not add veep rows. -- adventurous, we are not going to spoil our relationship with you, so this is something that has to be -- that has to be seen. it's a -- when it comes to cooperations, that's a difficult issue. it's precious water, so to say. then comes the issues,bigger issues. handling them. now, himself has been saying in the past that we would lean on

kashmir, and then you have -- how will that be handled? i think there is not going to be any sudden developments in that area, but there would be some movement in terms of at least trying to talk about these issues in the most serious manner, and if not just kashmir, it's agreed, so my big is that on trade and other matters, travel, ect., there would be trade, the question of transit is, again, a difficult question. it's not about to come about any time soon, and on the other issues, i think both the prime minister would at least try to talk about them.

we would not adjust them any time soon because india is now going to get through the election phase, and by next year, i think -- >> april. >> -- will have elections, and to be able to do something dramatic prior to the elections will not be, but there will be certainly toying of the relationship. >> thank you. >> thank you. my question is about the judiciary that they might get ancy, and in this instance, the government tried to privatize national industries.

.. the chill that from pakistan steel. the question is how is the privatization down by explicit data in a transparent manner? was it fair? was an insider deal? was it sold two -- too cheap?

and he went and sad the privatization that was occurring how to be reversed in the people that monaco how to be reemployed if people can bring this kind of case is, this is not being that nawar sharif to have to tackle because i know that his party is a parody of private business, private sector. to me there is no other way of solving, if you like, i cannot be a solution. as for exam will not solve this

company and dates are being made to leave it or not. it's always been linked. in order to make them profitable, you have to share labor and that has been the big issue is always an issue in privatization. so it's going to be a hard sell and hope only the cabinet will be allowed to precede the judiciary during the privatization in the right way, an open wan has no corruption involved. i don't know. i'm hopeful. >> maleeha, go ahead. >> gross judiciary in channeled more specifically the question that was fast, most of all i think nawar sharif will have a honeymoon. here it i have no doubt because the size of music very and the

mantewill be different for the higher judiciary manner construed as inconsistent with what he is received. the second thing is i think we saw a great deal in the last few years because this wasn't the only reason, but a principal reason was because government subsidies for the judiciary. if you have effective governance, regarded as the actions taken under transparent and legitimate come it's very hard to have judiciary and rightly judiciary will have no incentive. the strong incentive over the last five years, maybe more because judiciary saw no governor and from large areas were left on around and decided

to fill that space. on tom pickering i can hear all of them. the question about india i think the senses he moved quickly. there's no reason for him to do that. i think that is a fresh impetus in the new momentum to the relationship you the approaching election in india will impose one at on what will be possible in terms of the agreed area. here is that the two countries can and should do because here in separating the important india. the urgent means i'm what these

countries bottom lines are. they can't leave this to chance anymore. if one or the approaching transition is upon us and started misconstruing the other groups and behaving in a manner, which frankly is no good for anybody, including afghanistan. one of the initiatives of this level, but to be able to have a conversation with india going forward. here's how we see ourselves beyond 2014. we'd like to hear from you and then their mutual ex. since they can give each other to not end up emerging into the kind of situation that is everybody's nightmare, which is the 1990 situation.

when there is an understanding between india and pakistan come each country separately does not wish to go back to the days of the 1990s. so that creates a foundation of at least being clear about what we don't want that we both can discuss what they do want. >> thank you, maleeha good just a brief comment from ambassador mohsin khan. it is going to immediately restart liberal education and i don't think we should have that kind of a problem right at the start of the spring ministership. the important thing is nawar sharif is confidence in the

private sector site come especially in the punjab and that would start giving impetus to the economy. >> i know there a lot of hands. i'm trying to keep track of all of you. please identify yourself. >> i am a fellow at national and dominant. my comments in question is about baluchistan because it's important that's the most troubled province right now and that cannot the past election results come you are right and everybody joined last time with one person left in the opposition. it's interesting the party has won most of the seed tonight to this is the first time pashtuns have really taken the northern part of the richest in and people have shifted there goes towards them.

the third party i think is extremely important and we can focus on that as the national party with six and maybe one more seat because this is the only party that does not represent the tribal leadership, the tribal glories and comes from a middle class and has risen from the cemetery quietly and has a lot of visionaries among them, lake senator -- dr. malik. it can't come because the south has always been the check did, but is grown in terms of education and understand them and it's actually considered for the chief minister, which is an court new development and nawar sharif is considering three names. one from the tribal from his own party in the third one is dr. molly. if somebody like that for the

middle class gets elected or appointed the chief minister, that can really be a game changer for baluchistan because they are more in touch with the democratic front and a new kind of politics. >> would take that as a comment if you don't mind it just a bunch of the other questionnaires. we have a question may not come to the front. i'm now back >> is the microphone on? >> thank you. school of public policy, george mason university. i came yesterday, spent three months in pakistan doing a book on tomography in politics there.

i would like to revert to the observation about the future. one thing very interesting and the national assembly's 30% live in 1998 until pakistan's assembly is dominated by the presentation. i don't think what he mentioned that pakistan's future is not going to happen. that has been shown by pti. not only many urban seats, but also there have been major -- the second party in karachi but the change will take place. it never happened. but i saw especially the problem

in karachi and also the, the harm they are is 20% increased in the electorate. it's coming from the educated youth and i think that is the future of pakistan. the question is from dr. mohsin khan. isaacs and that he would not get the option for more. imf is one option and the second option it is still not coming for free. he didn't talk about any cuts. where do we need to cut and where to raise money? one thing everybody has kept silent, including nawar sharif and all the political parties,

perhaps pti was talking about raising the income tax. i don't know why. the second issue here is cutting the budget. what i heard from ambassador 73 is that nawar sharif will be set ordered by the taliban and that means military is nowhere going to be having a domestic warfare. so the need to cut down the budget and hopefully will have a relationship with them reappear so we can increase agriculture and come. i think this solution is fair. thank you very much. >> are there other ways -- >> first of all, i don't think pakistan situation is so bad it

cannot follow. you may be close to the firing, but i don't think it is regarded as being in a particularly bad situation. the question you are raising is true. i mentioned that that you do have to increase taxes and revenues from somewhere. agriculture income tax is by the constitution, a provincial issue. they are for the federal government cannot impose and has to be done. it's initiated. i think there should be a tax, but it is a tax that will benefit the provinces. i'm cutting back expenditures, yes there's room for cutting back way similarly people talk about expenditures, but please

understand, pakistan does not have a high expenditure level relative to those developing countries. it is constrained in its expenditures by the fact its revenues are so low. if you just let that the expenditure and sad 22% of gdp is government spending and development spending i think people would say that's very low for a country in this development. you may have other reasons for wanting to cut expenditures, but you know, whether it's military or whatever it is, i don't give a strong economic case. >> what about reallocation between sectors? >> this is something that icann

is not an economic issue. it's a political issue. it's a political decision with a large standing army or small standing army and reallocate the money. from an economic standpoint, i just look at the overall numbers and i don't see pakistan is spending too much had already safe living beyond its means, yes it is, but it's been so very small at the moment and that's a big issue still have to resolve. >> thank you, very much. >> thank you for joining us. >> maleeha commissary to lose you. >> i can see yo i knew you'd ask a question.

>> go ahead. >> two things, short-term and long-term. when i was in pakistan with the peace corps years ago, the literacy rate is 40% in both places and this is crucial and directly relevant to things you're talking about, marvin middle class. today the literacy rate is still in the 40s and meanwhile bangladesh is in the 80s. so it's a terrible gap here that need not have occurred, but it's a lack of priorities and most directly involved in economic process going forward. it has to have a widespread number of people to read and write. so i'd like to comment on that. is the new government are likely to pay attention to education? have been to many villages where this school, but someone

is getting a check to do the teaching has been paid for. it's got to be changed and is there any political after perverting? was the election even relevant at the reading level of some minimum? my second point unrelated is china. we know there's tremendous economic potential in india and pakistan get on better. there's also another neighbor nearby, china, which i try to live the aad money to increase electricity in the area. china is correct to step in and said that history. so let's think outside of that with what could have been the china as a serious neighbor and also back to my first question about literacy and why that is

not given emphasis in the last 30 years. [inaudible] >> you're absolutely right on the fact the literacy rate has remained abysmally low in pakistan. the government has not -- no government has -- you know, the pressure for education and literacy, et cetera interestingly enough comes from international agencies. the government -- there is of course a problem, which is the education of women issue. so when i look at rates across countries issued by the literacy rate for pakistani girls is so much lower than anywhere else in south asia, et cetera and that drops down. but if you look at man, day rate has been rising.

that's an issue. you know, this election was not fought on that basis. they always say, you know, the call for electricity and education and so on so forth. i don't think it was formed on that basis. i'm not sure what the education plan is. the only one that had an education plan within their manifesto was pti and a push to an abysmally low literacy rate and how we intend to. >> i know we've gone way beyond time. a quick comment from you and then to us questions together. >> education -- [inaudible] that is the main reason.

secondly, they are certain systemic problems within our system. for example, it has not been decided whether it should be responsible for the education of the central role in that. these are issues which i think basically really to government and perhaps things will improve. >> last two questions. ms. grossman and the mental. i'm sorry that i could take all the other spirit go ahead. >> thank you. as the song? i want to follow-up and ambassador pickering's question about rapprochement with india, and in particular, look at nuclear weapons and possible

stability measures, confidence building measures that pakistan has been interested in pursuing for quite some time. my curiosity here is where you think nawar sharif is right now on these questions, nuclear stability and what really anticipate the pakistan military might take in that kind of effort. thanks. >> stability in the region. >> the site and is an issue, which nawar sharif himself is not going to address. there have been, as you know, a set of confidence building measures. a couple of those before that, like for example, exchange of coalitions between the two countries, et cetera.

like expeditious exchange of information or risk. so these are things which basically the two sides keep on talking. they are hoping for some additional confidence building measures, which they can agree that pakistan would be very interested if there could be cooperation between the two countries. so, these are things which partly i related to detail and there are between the technocrats of the two sides, ther than a political level

that is something possible. i don't think there would be any issue of the political leadership. [inaudible] >> army had put them at the craddock levels. >> last question. >> during these elections if you look at the impact of reserves, it seems people for the first time have a certain import can buy the anp people's party. the second-largest party in terms of story. so do you think this could force the two largest parties as the people's party still has some are for the next five years to start performing a particular

look over the structure changes that she referred to? or it could be more the same we are going to see micro buses and things like that? >> i really don't know, but let me say one thing that is often said about -- but the people's party got wiped out and put in chad. the people's party was not in charge of punjab. but as we've seen it put job has been in that shape, it is at the feet -- it's not the people's point. the other ratio is will it perform well? there have been periods in time when the government has done very well in terms of

performance. but there's this issue that has to be resolved in karachi. the question is who is actually ruin the province? i think they've taken aback now for separate karachi is the thinking of the mqm in this. so we just have to say, waste his chief minister to come from? who is going to be the chief minister? what kind of government is he going to put together and so on? will it be a coalition? will it be only -- we just have to wait and see. >> on that note, if you enjoyed me in banking ambassador --

[applause] i'm grateful that she shyness and i'm grateful that all of you stayed beyond the appointed hour of 11:30. it's been very profitable and we've made it. thank you. [inaudible conversations] >> so the question is why do we do with? why take the risk? sfr font? for adventure? is it for the money? there were certainly easier ways of making a living in doing this. we do it to understand the world and how it changes.

the world tends to move at the earth place here attention knows that suddenly they snap with violent political change to make a terrific cracks are to see how the plates fit together. we do to show tv pundits the studio jockeys they are usually wrong. we do it because he decided this is what we want to do with our slice of time on this planet.

>> at the house hearing, testimony on lakeland privacy issues that the domestic use of drones. congress is considering legislation to limit drone youth and establish privacy protection. congressman james sensenbrenner chairs the judiciary subcommittee hearing.