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Last Updated: Saturday, 29 January, 2005, 16:30 GMT
Pakistan pushes India on pipeline
By Tim Weber
Business Editor, BBC News website, in Davos

Pakistani Prime Minister Shaukat Aziz
Shaukat Aziz is upbeat about the Pakistani economy
Better economic relations between India and Pakistan depend on both countries joining forces to build a gas pipeline to Iran, Pakistan's prime minister has said.

Both countries needed energy, and linking them with a pipeline would reduce the "trust deficit" that prevented closer co-operation, Shaukat Aziz said on the sidelines of the World Economic Forum in Davos.

He also promised to push for the privatisation of 100% of Pakistan's state-owned companies.

Even the Pakistani state oil firm had been sold off, he said, despite security concerns in some quarters, he added.

So far Pakistan has plans to privatise about 85% of all state firms.

'Walk before you run'

But Mr Aziz has ruled Indian companies out of bidding to buy Pakistani firms slated for privatisation.

"Let's walk before we run," he said.

Asked by an Indian businessman whether his company could bid for Pakistani infrastructure projects, Mr Aziz said this would not be possible for now.

But if India accepted Pakistan's pipeline offer, relations would be so improved that the "whole gamut of economic relations" could be up for discussion, the prime minister said.

Pakistan is talking to Iran, Qatar and Turkmenistan about securing energy supplies.

"You need the gas, we need the gas too," he said, directly addressing his "Indian friends" in the audience.

Strong economy

With many business people at Davos, Mr Aziz praised the performance of the Pakistani economy.

After growing by 6.4% in 2004, he said this year the economy could see a 7% growth rate.

Things were going so well, he added jokingly, that in the cities of Lahore, Karachi and Islamabad it was now difficult to find a hotel room.

"But don't let that stop you from coming," he told investors.

"We'll find a place for you to stay."

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