The present leadership accorded a high priority to fostering socio-economic progress, by seeking to foster an environment conducive to development. The decade of the 1990s had seen Pakistan's annual GDP growth plunge to 3 per cent annum and the percentage of those below the poverty line rose from around 17 in the 1980s to over 30 by 1999. The focus of the policies of the government since 1999 has been on removing the causes that have adversely affected the life of the common man. Its programme of decentralisation, the drive to improve accountability, and the justice system as well as police reforms are aimed at improving governance, better utilisation of developmental funds, and building up the infrastructure for welfare, notably in the spheres of education and health.

The five years since 1999 witnessed many challenges, including the US intervention in the region after 9/11 in its war against terrorism, and serious strains in relations with India, that almost led to a conflict. However, the macro indicators have registered a remarkable improvement, with Foreign Exchange Reserves rising to $12 billion, exports rising significantly, and the rate of GDP growth doubling to 6 per cent. Despite the rising expenditure on internal security, social action programmes have received increased allocations from the budget, and poverty alleviation is a major objective of government policies.

Socio-economic progress is not only relevant to poverty, it also helps create an environment conducive to moderation. For long, development was considered as the process whereby natural and human resources are utilised efficiently to improve living standards. As the gap between the developed and developing countries has widened, and poverty affects growing numbers of people, the argument of fairness, and an equitable division of resources is still a powerful tool for those advocating a more just economic order.

However, in the post 9/11 world, which is pre-occupied with the threat of terrorism, the argument that carries weight in the developed world is the relevance of socio-economic development to the war against terror. The mere appeal to humanity, and fairness did not seem to attract resources from the developed countries to remedy backwardness and poverty. However, the fear that economic deprivation may drive desperate people to take to terrorism is proving more effective in attracting attention to the need for economic justice. The other root cause of terrorism is the frustration caused by political injustice in Palestine, Kashmir and other parts of the Muslim world.

For developing countries like Pakistan, where the problems of poverty are exacerbated by the rise of extremism that can turn into terrorism addressing the problem of poverty is the most effective way to contain terrorism. President Musharraf, speaking at the Islamic Summit last year in Malaysia, drew attention to the tendency in the west to link the phenomenon of terrorism to Islam. He came up with the strategy of "enlightened moderation," which would create a win-win situation both for the West, and the Islamic world.

The role of the Muslim world would be to eschew extremism, and militancy, even for just causes, and to adopt the path of socio-economic uplift. The West would provide economic and technical assistance to remove poverty, and use its power and influence to help resolve the disputes in which the democratic and human rights of the Muslims were being violated. This concept, which the President also mentioned in his address to the UN General Assembly this year, won considerable support.

The strategy of socio-economic development to fight poverty, as well as to contain terrorism and militancy is being implemented in Pakistan. After the first five years, during which Finance Minister Shaukat Aziz helped lay the foundation for economic stability and growth, attention is being turned to spreading the benefits to the common man, by addressing the problems in the social sector. Education, health and technological skills are being promoted, with increasing participation of the private sector, as well as the foreign agencies and governments.

Prime Minister Shaukat Aziz is shortly going to visit all member countries of SAARC, in his capacity as Chairman of the organisation. He will also attend the SARC Summit early next year in Bangladesh, which will take up the implementation of many plans to accelerate the development of this region which contains over one fifth of the world's population. The strategy put forward by President Musharraf is also applicable to the SAARC countries, which face problems of poverty as well as instability arising out of socio-economic deprivation.

The road to social and economic emancipation of the people is a long and tortuous one, in which regional cooperation can play as important a role as aid and investment from the developed countries. Though the war on terror has become the first priority in global concerns, victory in this war will be achieved only by addressing the roots of terrorism, which lie in political and economic injustice. In this struggle, the developing countries also must get their priorities right, and focus on improving the social and economic indicators.

One of the major challenges for the developing countries is that of ensuring that progress at the macro-level is shared with the great mass of the people. In South Asia, the progress achieved through development has remained limited to the upper 20 per cent of the people. Pakistan is now engaged in efforts to raise the living standard of the common man, and all SAARC countries, that face the same challenge, can learn from each other, as well as other major developing countries, like China.