and especially of islamic banks to these sectors is very low in the country. lack of skilled professionals and relatively young age of the industry is quoted as one among major reasons in this regard. centers for excellence for islamic finance education have been established with the main objective of providing human resource for the industry with desired skills and knowledge. closer interaction between industry and these centres is critical in making islamic finance & banking successful in pakistan. i would also like to encourage industry to make use of technology especially to cater to these sectors to minimize cost. by expanding the range and reach of financial products, islamic finance can help in improving financial access and foster the inclusion of those deprived of financial services whether voluntary or involuntary. ladies & gentlemen while growth is likely to continue at reasonably fast pace, issues and challenges confronting the industry need attention and ownership on part of all stakeholders. the huge untapped potential market of islamic finance can be harnessed by capitalizing on its distinct characteristics. i page 5 of 6 would encourage all islamic financial institutions to actively engage themselves and be recognized as value embedded, efficient financial players committed towards contributing to the real economic growth. i am optimistic about the future outlook of the industry and events like today ’ s are helpful in mapping out a strategy for sustainable growth of the industry. i assure the full support and cooperation from the central bank. i wish you successful deliberations during the conference and the best of luck for all future endeavors. thank you. _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ page 6 of 6

. at the same time, the state apparatus for delivery of these services in most south asian countries has become largely dysfunctional due to induction of poor quality personnel, corruption, inertia, waste and institutional decay. how to narrow this widening gap between the rising expectations of the common man and the declining capacity of state institutions is one of the most difficult tasks for the leaders of south asia. south asia is lagging behind the east asian economies and have a lot of catching up to do and, that too, in the shortest period of time. i do not wish to go into the details of all the comparative indicators of the two regions which are well known to all of us, but suffice to say that we are way behind china, indonesia, malaysia, thailand and the philippines both in levels as well as the rate of improvement. what can be done to reduce poverty and unemployment and catch up with the east asia? we should recognize this region is our benchmark against which we should evaluate our performance although it is our biggest competitor in the global markets, particularly china, which is becoming an industrial giant. let me offer some thoughts on this issue but also hasten to add that these are by no mean exhaustive and are being presented only in the spirit of provoking a broader debate and discussion in our countries on this important subject. ( a ) between 1980 and 2001, south asia received $ 17 billion as official development assistance ( oda ). however, between 1990 and 2001 oda inflows have declined both in per capita terms as well as percent of gdp. there was a change in the composition of external capital inflows with a declining share of aid in relation to other types of inflows. this change in composition suggests that the influence of the official donors and particularly the international financial institutions ( ifis ) is thus likely to wane in the future while that of the fund managers, rating agencies, equity research houses, investment banks and multinational companies is likely to gain ascendancy. thus, credibility of economic policies pursued by the countries assumes a much important role than the relationships nurtured with donors and the ifis. the market ’ s power to penalize imprudent policies and breach of commitment is more damaging to the economy than the slippages in the observance of imf or world bank conditionalities. if we recall mexico had to suffer heavily when the incoming zedillo regime reversed the pre - commitment made by the salinas regime to the