flows and 9. 3 % of asian gdp. three - fourths of the portfolio flows to asia were directed to equity markets. 14. in contrast, asian investors have less than 20 % of their equity portfolios ( in most cases less than 10 % ) in markets outside the region and are less dependent on overseas bank lending. notwithstanding, stock market correlations, co - movements of interest rates and bond yields, and foreign participation in selected markets, do reflect that asia ’ s financial markets are gradually, but not completely, undergoing global integration. 15. in general, asia ’ s ( excluding japan ’ s ) exposure to the sub - prime mortgage market was limited and confined to few banks in relatively more developed financial markets. the related losses were estimated to be in the range of $ 20 - 30 billion and in most cases these losses have been accounted for. asian central banks ’ exposure to us mortgage - based securities was also limited, except for china, where these holdings were backed by government mortgage entities. 16. financial stress resulted in delays in certain financial deals with asia but had otherwise little impact on the region ’ s banks and financial institutions. steeper impact has been observed on securities markets, and to a lesser extent on bond markets, driven by revaluation of risks in financial markets and worries about the global economic outlook. in some cases this resulted mainly in correction of valuation / returns on securities. while the equity markets recovered towards the end of 2007 – with several indices hitting new highs in october – they came under pressure in the beginning of 2008 as myths regarding asia ’ s decoupling from the us and europe faded. by mid - march 2008, most asian equity indices were down 15 - 25 percent for the year. despite the dampening effects on the asian equity markets, they largely outperformed the mature markets and the world average indices. 17. international debt markets did not go unscathed. reflecting the liquidity constraints and higher risk premiums, spreads for offshore borrowing widened significantly for both sovereign and other borrowers. spreads rose for asia in line with the trends in emerging markets and virtually doubled and tripled ( but were below us high yield debt markets ). risk premiums magnified further for countries facing complex economic and political environments. the itraxx asia ex ‐ japan credit default swap ( cds ) index ( including sovereign, corporate and financial issuers ) surged by almost 300 bps over the last nine months. 18. inflationary pressures. most worrisome have

ishrat husain : the role of the private sector and government in pakistan ’ s economic development convocation address by dr ishrat husain, governor of the state bank of pakistan, at the institute of business management, bahauddin zakariya university, multan, 4 february 2003. * * * mr. vice chancellor, dean of faculty, director ibm, distinguished guests, faculty members and dear students, i would like to thank the vice chancellor, faculty of the dean and director of the institute of business management for inviting me this evening at their graduation ceremony. i would extend my sincere felicitations to all those who will receive their m. b. a. degrees today and also to their parents. as an employer who recruits about 50 candidates from among several thousand applicants through a competitive process every year i am quite sure to see some of you in the state bank of pakistan in near future. we already have more than 50 graduates from this university and the institute and they have demonstrated high standards of integrity and professional competence. as your director has pointed out some of the able graduates of this institute are unable to cross the threshold of 70 percent marks at the m. b. a. examination used by the s. b. p. to screen the candidates because of your rigorous grading. but you must realize that we receive 11, 000 applications every year and it is not possible for us to test all of them. hence we have to adopt a certain cut - off point. we would examine other possibilities such as ranking of the universities and business institutes to adopt alternative system of screening. today, as it is a tradition on such occasions i am going to address on an important topic i. e. the role of private sector in the economic development of pakistan. most of you will end up in this sector and i would therefore like to give you some advice – as to what role you should play. pakistan has made considerable progress during the last 55 years since its independence. a country with about 30 million people in 1947 was heavily dependent on imported food, imported cloth and imported energy to sustain itself. there were serious doubts raised at that time about the country ’ s economic survival. today, in 2003 pakistan one of the largest countries in the world with a population 145 million is not only self sufficient in food grains, meat, milk and poultry but also exports wheat and rice. pakistan does not only clothe its population but is one of the leading exporters of textiles in the world