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DAWN WIRE SERVICE
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Week Ending : 12 April 1997 Issue : 03/15
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Pakistan & Indian PMs to meet in May
President says he supported repeal of 8th Amendment
No secret deal with govt, says Benazir
Benazir rules out rapprochement with Leghari
Major reshuffle in PPP hierarchy
Punjab, Sindh rift may delay census
2m tons of wheat being imported
Bill to suppress sectarianism soon, says PM
---------------------------------
Excessive borrowing stymies monetary stability
Fiscal package: 'management by hope'
Raising our stature in international trade
Three-dimensional power crisis looms on horizon
A spectacular act of faith
Consultation on Islamic banking
IMF keen to know cost of economic reforms
Working group to simplify IT Ordinance
KSE 100-share index suffers fresh fall of 6.31 points
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Consistent honesty? Ardeshir Cowasjee
Let 8th Amendment go as a whole Senator Iqbal Haider
Destiny of the subcontinent Mazdak
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Nottinghamshire sign Pakistan pacer Zahid
Betting & bribery charges damaging
Sports conference; will it benefit the country?
Jansher bags British Open title for 6th time in a row
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970408
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Pakistan & Indian PMs to meet in May
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Bureau Report
ISLAMABAD, April 7: The prime ministers of Pakistan and India will meet in
Maldives in May during the South Asian Association for Regional Cooperation
summit, Foreign Secretary Shamshad Ahmad told reporters.
Talking informally with reporters at an international conference on human
development in South Asia, the foreign secretary said prime ministers of
the two countries would certainly meet in Maldives next month.
He said the two heads of the government would discuss all outstanding
issues between India and Pakistan, including Kashmir. Shamshad Ahmad said
it was normal for the regional leaders to hold bilateral meetings on the
sidelines of such a summit.
"We have to go a long way," he said referring to the efforts being made by
the two countries to resolve their disputes through negotiations. "The
issues involved are complex and deep-rooted, he said but added it was
gratifying that the two countries had agreed to continue talks."
Foreign ministry sources confirmed that Foreign Minister Gohar Ayub Khan,
who left for New Delhi, would hold talks with his Indian counterpart Inder
Kumar Gujral before his return to Pakistan on April 9.
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970408
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President says he supported repeal of 8th Amendment
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Nasir Malick
ISLAMABAD, April 7: President Farooq Leghari said he avidly supported the
scrapping of the controversial parts of the 8th Amendment which gave the
president the power to dissolve the assembly and added that he had invoked
Article 58(2)(b) in the national interest and with a heavy heart.
Talking to reporters after inaugurating the human development conference he
said he did not understand why people thought he would be upset with the
scrapping of the 8th Amendment which stripped him of the powers to dissolve
the National Assembly. He said he never expressed anger at the scrapping of
the parts of the 8th Amendment.
This was the first public reaction of the president on the 13th Amendment
passed by the parliament which vested in the prime minister the powers to
appoint governors and armed forces chiefs previously held by the president.
Newspapers had quoted PML leader Abdul Majid Malik as having said that the
president was upset when informed by the prime minister that the government
was scrapping the 8th Amendment. However, later Abdul Majeed Malik denied
having made such remarks.
The president said strange things were being said about him. He said with
the repeal of the controversial portions of the 8th Amendment, democracy
had been strengthened in Pakistan.
Asked whether by removing the presidential powers, a way had been opened
for the intervention of third force, the president said that from his past
experience, he could easily say that the people were the biggest defenders
of the constitution and democracy and hoped there would never be any such
crisis in future which would warrant extra-constitutional action.
Farooq Leghari said that during his entire political career, he had
struggled for the supremacy of the constitution and even went to the jail
for this cause.
He recalled that soon after being elected as president, he had asked the
parliament members to undo the amendment which was hanging as a sword of
Damocles over their heads. But, he said, the then PPP government did not
enjoy the two-thirds majority to pass the constitutional amendment.
The president said when the situation in the country started deteriorating,
he twice warned the PPP government that he would exercise his power under
the 8th Amendment if the country's situation did not improve. He said he
had warned the government at least six or seven months before dissolving
the National Assembly. "So when the conditions deteriorated, the economy
was on the verge of collapse and constitutional violations became rampant,
I did what was possible only through the Eighth Amendment," he said. "I
invoked Article 58(2)(b) with a heavy heart but in the interest of the
country as it had become inevitable."
The president said that after sacking the PPP government, he immediately
announced the election date as per the constitutional requirement. "After
this action, staying within the constitution, I held elections which were
fair and free," he said. "As a result of the elections, a party came into
power with two-thirds majority and they had the power to scrap the 8th
Amendment.
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970409
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No secret deal with govt, says Benazir
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Staff Reporter
KARACHI, April 8: PPP chairperson Benazir Bhutto, who left for London,
denied she had entered into any "secret deal" with the government.
" I am not running away, I am not going under any secret deal with the
government and I have never compromised on principles, whether it was
during Gen Zia's rule or now," she said while talking to newsmen before her
departure, apparently to meet her sister Sanam Bhutto.
Ms Bhutto was bitter about press reports in this regard and said they were
part of a character-assassination campaign launched against her and the
family by those opposed to her "politics of the downtrodden."
"I wish there were laws to punish those involved in publishing baseless and
scandalous stories," Ms Bhutto said, opposing media trial of anyone in the
country. "I wish parliament or the press itself framed laws through which
elements who published baseless stories about a sell-out on Gwadar or
Chakwal, sale of Bilawal House or containers and other stories," she said.
Ms Bhutto said there were laws to punish corrupt politicians, generals and
judges "but how many are punished?" She was of the view that laws were only
for the poor and political opponents. .
Ms Bhutto said that, despite the "media trial", claims about the Surrey
mansion and other allegations could not be proved.
She replied in the negative when asked if she was going to London in
connection with admission of her children , and said they were studying in
the country.
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970406
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Benazir rules out rapprochement with Leghari
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Our Correspondent
LARKANA, April 5: Benazir Bhutto, chairperson of the PPP, has ruled out any
compromise with President Leghari even if he steps down.
Addressing a Press conference at Naudero on Saturday, the former prime
minister said that she would not consider a rapprochement until the
assassins of her brother Mir Murtaza Bhutto were exposed.
She claimed that her sister-in-law, Ghinwa Bhutto, was brainwashed by the
president and that the latter was pitted against her after being granted
citizenship.
Questioning Mr Leghari's sincerity with the party, Ms Bhutto said he should
have tendered his resignation as president on Nov 4, when the PPP
government was dismissed.
Asked about chances of her reconciliation with the widow of Mir Murtaza,
Benazir Bhutto said: "We have been keeping silence while every move came
from the other side. The dispute within this family has been created by
those who do not want to see PPP in power. Murder of my brother was also
part of the conspiracy hatched by such people."
Regarding policy and achievements of the PPP, she said: "We strongly
believe in a stable and strong Pakistan, stood for the just cause of Muslim
Ummah and raised voice for the Third World. Perhaps we could not convey our
achievements to the media properly."
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970406
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Major reshuffle in PPP hierarchy
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Our Reporter
KARACHI, April 5: The PPP on Saturday announced a reorganised party
structure in which Begum Nusrat Bhutto was officially named Rehbar
chairperson of the party, while former prime minister Benazir Bhutto
remains party chairperson.
According to details faxed from Bilawal House, former commerce minister
Chaudhry Ahmed Mukhtar was made party secretary general, a post for which
former law minister Senator Chaudhry Aitzaz Ahsan had been tipped.
In the fax message, which gave details of all the new posts, the
reorganised PPP did not include the names of Jehangir Badar, Mushtaq Awan,
N.D. Khan, Iqbal Haider, Naseerullah Khan Babar, Senator Ali Nawaz Shah,
and Dr Ashraf Abbasi. The restructuring follows the crushing defeat of the
party in the February 3 elections.
Former NWFP chief minister and PPP chief of that province, Aftab Ahmed Khan
Sherpao was elevated to the post of senior vice chairperson of the party.
Makhdoom Amin Fahim, originally expected to be made Sindh PPP president,
and Syed Yusuf Raza Gilani, former speaker of the National Assembly were
both made vice presidents of the party.
Makhdoom Shah Mohammad Qureshi and Senator Raza Rabbani were made deputy
secretaries general.
The post of information secretary, until now held by Senator Iqbal Haider,
had been left vacant, but Barrister Iftekhar Ahmed was named deputy
information secretary. Senator Ehsan Paracha was named treasurer and
Pervaiz Khatak named the coordination secretary.
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970410
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Punjab, Sindh rift may delay census
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Bureau Report
ISLAMABAD, April 9: After a first round of talks with two major provinces -
Punjab and Sindh- the authorities are not sure about the holding of census
this year, as decided earlier by the federal cabinet, it is learnt.
Sources in the Population Census Organisation confided to Dawn that the
fears of Punjab that Sindh may record inflated figures of its population,
are still there, making it difficult for the authorities to get the two
reach an agreement.
"We believe that the census issue has been politicised badly. It requires a
political solution, for which only the prime minister will have to take a
decision after consulting Punjab and Sindh," a source said. They said the
politicisation of the issue had complicated the situation. Punjab had fears
that its population percentage would drop tremendously if the head count
was not done properly in Sindh, which would consequently reduce its share
in the divisible pool, besides reducing National Assembly seats and quota
in jobs, they added.
The sources said Punjab had proposed to conduct census on the basis of
registration done by the passport and registration department. But the
record of the registration department had shown a rise of hardly 0.9 per
cent from 1981 to 1996, they said.
The authorities did not approve Punjab's previous demand for freezing the
existing share of provinces in the divisible pool by amending the
Constitution. The authorities said it would not be acceptable to other
provinces, particularly Sindh which believed that its population had
increased since 1981 when the last census was conducted, the sources added.
They said there was also a division in Sindh on the basis of urban and
rural populations , and added that the urban population in Sindh was of the
view that their percentage had increased tremendously. Because of this, the
rural population in Sindh had its own fears.
Balochistan, the sources said, was also divided on ethnic basis. Balochs
believed that the Pakhtoon population, because of Afghan refugees, would
undermine their domination in the province.
About the NWFP , the sources said, it had no reservations except the demand
that its overseas population also be counted while conducting census. "In
view of these problems we believe that the census can only be held if the
provinces show their commitment," a senior source in the census
organisation commented.
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970410
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2m tons of wheat being imported
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Bureau Report
ISLAMABAD, April 9: The Economic Coordination Committee of the cabinet,
decided to import 2 million tons of wheat and 50,000 tons of sugar to pre-
empt any future crisis.
The ECC meeting, chaired by Finance Minister Sartaj Aziz, reviewed wheat
and sugar stocks in the country and asked the ministry of agriculture to
float international tenders for the import of wheat and sugar.
The 2 million tons of wheat which will be in addition to the 320,000 tons
of wheat being imported from the US, will be meant for the next year as the
present estimates show that total production this year will remain slightly
less than the country's total consumption of 17 million tons. However, the
ECC noted that import of sugar was urgently required as the total
production this year was less by about 0.6 million tons of the estimated
consumption of 2.8 million tons. sugar was being imported to pre-empt any
Atta -like crisis and maintain prices at a reasonable level, an official
said.
The ECC was informed that 1.1 million tons of sugar was in stock while the
country's monthly requirement was about 200,000 to 250,000 tons. Reviewing
the situation, the EEC noted that two ships carrying "500 tons of wheat
would reach Karachi on April 13 and April 15. The committee directed the
concerned agencies to ensure expeditious transportation of wheat from
Karachi to upcountry.
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970412
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Bill to suppress sectarianism soon, says PM
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Bureau Report
ISLAMABAD, April 11: Prime Minister Nawaz Sharif on Friday said a
constitutional amendment bill was being prepared to control sectarianism,
purge society of heinous crimes and improve law and order.
He was talking to newsmen in his chamber in the Parliament House after
presiding over the parliamentary party meeting of the PML(N) and its allied
parties.
The prime minister said his government was firmly committed to reform both
the government and society and rid them of corruption. He advised his
colleagues not to recommend or bring any kind of pressure on him in support
of corrupt officials.
"No one should support any corrupt official or show any favouritism towards
any corrupt official otherwise he too would be considered as corrupt," the
prime minister said.
He said that the government was satisfied with the steps being taken to
fight corruption but added that the people should not expect overnight
changes.
The prime minister regretted that an Urdu language newspaper had tried to
create an impression that the suspension of 87 officers was an act of
victimisation. He said there was no such thing in the mind of the
government and it would not be deterred by any one.
Nawaz Sharif said the government would not tolerate any obstruction in the
way of accountability. "Any effort to create any hindrance will be
thwarted," he said.
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970409
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PIA to cut some international routes to save money
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Staff Reporter
KARACHI, April 8: The PIA plans to cut back several flight operations on
some international routes which are not profitable, a senior airline
official said.
The official while explaining the airline's recently-introduced 'Denied
Boarding Compensation Plan' also said that the estimated annual cost to the
PIA of such a plan would be between Rs 10 and 15 million.
The airline's marketing director Saleh Tareen told a Press conference at
PIA headquarters that flights to Athens, Zurich, Beirut and Almaty in
Kazakhstan were under review and their sales performance would be evaluated
till June after which a decision would be taken whether or not to continue
them.
The official said that the PIA would start a new flight to Johannesburg by
October this year and a new flight to Islamabad at 9 pm every day would be
added after the summer.
The general manager for reservations, Hamid Khan, who was also present at
the briefing said in response to a question said that if any travel agent
deliberately overbooks a passenger then that agent would have to pay part
of the cost of the compensation promised to the passenger. To another
question he said that since the past few months no quotas were set aside
for any government officials or parliamentarians.
The marketing director said that from May 15 this year the airline would
make it possible for travellers on the Lahore, Islamabad and Karachi
domestic routes to get their boarding card a day or two in advance provided
they were not going to check in any luggage and take only carry-on baggage.
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970407
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Excessive borrowing stymies monetary stability
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Muhammad Imtiaz Ali
THE Central Board of Directors of the State Bank of Pakistan at its meeting
held recently in Lahore has shown its concern over the massive bank
borrowing by the government for budgetary support from the banking system.
Bank borrowing for budgetary support crossed the Rs. 77 billion mark by the
end of February, 1997, a Rs. 40 billion shortfall is feared by year-end and
current account is massively imbalanced and consequently recent improvement
in the external sector would be neutraliised by the monetary instability.
This trend would exert an adverse impact on the country's balance of
payments and undo the efforts for the containment of inflation besides
crowding out bank credit to the private sector. During the seven months of
the current fiscal year, the limits of borrowing fixed in the budget have
been crossed by a wide margin.
Cutting the government borrowings is also one of the conditionalities of
the IMF and the government would find itself in great trouble with the fund
(IMF) if the borrowing is not reduced to 4 per cent of the GDP by June,
1997 from its existing level of well over 6 per cent.
The grave consequences of uncontrolled bank borrowings were certainly not
beyond the comprehension of the government, but it appears to have continue
to indulge in this practice detrimental to economic health, under a
combination of compulsions, where the government found itself left in a
position with no other option but to resort to bank borrowings to meet its
current expenditure. In Pakistan revenue generation from both the tax
sources and non- tax receipts are quite below their potentials. The
statement of the U.S. Assistant Secretary of State, that Pakistan has Rs.
120 billion ($3 billion) work of taxes which has remained uncollected is
relevant in this context. The government does not have the political will
to tax the feudal lords, particularly in agriculture sector. Lack of
documentation of the economy is another major reason for revenue leakage,
which is costing the government enormously in terms of tax evasion, made
easy by the help of the corrupt bureaucracy. The central bank failed to
pursue an appropriate monetary policy during the first three years of the
8th Five-Year Plan, namely, 1993-" to 1995-96. The Central Bank was not
able to restrict monetary growth to the Plan's monetary expansion target of
12 per cent per annum mainly because of higher than the targeted expansion
of credit to the government to the tune of 30.8 per cent. During these
three years the average growth rate of money supply remained 16.1 per cent
per yar as against average annual GDP growth rate of 5 per cent, thus
creating a massive inflationary gap in the economy.
The collection of proper taxes would wipe out the gap and do away the
compulsion for burdening the people with additional taxes.
The government borrowings being inherently inflationary in nature, not only
fuels a general increase in prices of essential commodities in the country
but also undermines the economic recovery by taking the funds otherwise
available to private sector whose poor performance due to lack of funds
available to them, but can frustrate all the efforts targeted at improving
the desired level of GDP growth rate.
The Government needs to tighten its belt in this regard which calls for a
bold exercise backed by a strong political will keeping in view the
national interest. Similarly, the recovery of Rs. 140 billion worth of non-
performing and defaulted loans can considerably increase the availability
of credit in the country.
The caretaker government made necessary amendments in the laws on the role
of State Bank, enabling the Central Bank to fully control banking sector
besides exercising full authority over the formulation and enforcement of
monetary policy.
The government must taken notice of the State Bank's warning about the
excessive borrowing and concentrate its attention on mobilisation of
resources through recovery of the defaulted bank loans and accumulated
arrears of taxes. Until and unless the government's pre-emotion of bank
borrowings for budgetary support is not changed, the private sector would
have to face stringency in the availability of bank credit. Thus, the
Central Bank should start exerting its weight with a view to check
drastically the government spree of bank borrowings, as it now claims to
enjoy full autonomy over monetary issues. This will be greatly facilitated
by the pursuit of an integrated package of fiscal and monetary reforms
designed to bring down the fiscal deficit to 4 per cent of GDP and reduce
the current account deficit to 3 per cent of GDP.
The consequences of reverting to the excessive bank borrowings by the
government for the budget deficit would further add to the difficulties of
the present government to deal comfortably with the International Monetary
Fund (IMF) and any delay in the release of the fund from IMF out of the
standby credit, would add to the critical foreign exchange reserves
situation, as the current liquid foreign exchange reserves are in the range
of $700 to 800 million, i.e. around four weeks import cover barely enough
to meet the next quarterly debt repayment. This would adversely effect
Pakistan's credit-worthiness.
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970407
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Fiscal package: 'management by hope'
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Dr. Mahnaz Fatima
WHILE one would wish the current fiscal effort Godspeed,people are keeping
their fingers crossed as the estimated revenue impact has not been
announced by the government which is unusual. The package attempts to
mobilise the will to pay by bringing about a significant reduction in
individual income tax rates and in the corporate tax rates.
At the same time, several of the individual income tax exemptions have been
withdrawn. Also, the tax credits and exemptions given to the domestic
business/industrial sector, amounting to some Rs. 40 billion, will be
withdrawn over the next two to three months. One would, therefore, like to
know the exact favourable impact on the corporate tax payers as lowering of
tax rates, followed by withdrawal of exemptions, might not alter the tax
payable significantly. Should this happen, one would then like to know as
to how the fiscal package expects to mobilise the will-to-pay if the tax
burden is not reduced significantly. Do they expect a significant increase
in tax collection by merely simplifying tax calculations? If so, then the
claim, about a higher will-to-pay mainly because of reduced tax rates would
lose validity. Also, it is the decrease in effective corporate tax rates
that needs to be determined.
Further, one would like to know the percentage of individual income tax
payers who belong to the salaried classes. If their percentage is high,
then the claim regarding increased tax collection through a better will to
pay, by reducing individual income tax rates, would need to be verified,
for, this tax would be less likely to post an increase if contributed
mainly by the salaried classes whose income tax is deducted at source
regardless of the rates of income tax.
Vertical equity
An attempt has, however, been made to introduce greater vertical equity in
the income tax structure. While the individual income tax rates have been
lowered for all, several exemptions on perquisites have been withdrawn and
the amount of income tax credit has been reduced. Some people might try to
blow income tax exemption withdrawals out of proportion by interpreting
this measure as an excess on the salaried classes. It might, however, need
to be asserted that those drawing high five-figure and six- figure salaries
have absolutely no reason to have their perks exempted from income tax. In
fact, the employers and the high- salaried classes connive to have the
salaries structured in such a manner that would minimise the tax incidence
on them.
In a resource-starved country, this disposition of the high-salaried class
is no better than the tax evasion tendency in the business classes whom the
educated salaried class also condemn routinely for evading taxes. In the
interest of vertical equity, it is important to have the perks of high-
salaried classes brought into the tax net which is one of the few measures
of this fiscal package that deserves strong support. Also, this time, this
exemption withdrawal is applicable to both the government and the private
sector because of which the private sector employees should have no reason
to feel discriminated against.
Further, reduction of income tax credit should not be too bothersome for
the salaried classes who should be contributing willingly to a troubled
economy as they are amongst those fortunate people who can still find
gainful employment despite the economic crisis in the country.
So, while the package attempts to introduce more vertical equity in the
income tax structure, the concept of horizontal equity will be properly
introduced only if and when the farm incomes are also taxed commensurately.
This serious revenue generation issue has, however, been explained away by
simply instructing the provinces to legislate. It is important to recall
that while the three smaller provincial governments legislated it, the
province of Punjab has been posing the greatest difficulty in this regard
as could also be gauged from the failure of the last caretakers who could
not even have an ordinance promulgated to this effect there. The intent was
announced which never materialised. So, the issue of introducing horizontal
equity in the taxation structure has yet to be addressed satisfactorily.
The drastic reduction in the rates of Customs duty is worrisome on two
counts. First, it is not known as to how the revenue loss will be
compensated for in the short to medium-term until the supply-side policies
show results if at all and until the irresistible chronic urge to smuggle
is overcome.
Even if the supply-side works, there will be a time lag which might perhaps
be filled with the help of external borrowings which, in turn, will add to
the longer term debt burden in case the supply-side measures fail to show
the desired results. Second, while some protection has been afforded the
engineering sector from competing imports by levying a 35 per cent custom
duty on imported engineering goods, there is no mention of protection to
the country's electronics and consumer goods industry from competing
imports of finished goods. So, cheaper imports, under a liberalised trade
regime, will not only convert Pakistan into a dumping ground for foreign
imported goods but will also lead to a still more consumptive society
developing tastes that will be difficult to satisfy by local producers.
Also, it is trading activity that will tend to be encouraged more than
domestic production capability and enterprise.
And, one wonders as to how the people will be integrated into the
development process unless labour-intensive indigenous technology is
encouraged in both the industrial and agricultural sectors.
The above measures might, however, serve to attract foreign investment by
MNCs who already enjoy economies of scale in manufacturing and marketing.
Reliance cannot, however, be made for employment generation on foreign
investors alone who will bring with them capital-intensive and labour-
saving technologies. If the idea is to follow strictly in the footsteps of
some rapidly growing East Asian countries, then one would need to learn
some other lessons also from their experiences. As stated by the Malaysian
Deputy-Prime Minister and Finance Minister Anwar Ibrahim in the context of
foreign investment during his last month's visit to Pakistan, "I value
contribution and concern of several (industrial) conglomerates who agree to
housing, education, and transfer of technology .... you cannot expect a
country to grow on imported technology". So, the Malaysian government,
while encouraging foreign investment, seeks spill- over social benefits for
whatever numbers are employed by MNCs and, above all, transfer of
technology so as to develop indigenous capability vital for national
economic sovereignty and self-reliance. While the Pakistan government's
fiscal package touches upon the 2 per cent contribution from profits to
education and health of workers, it will be the practical emphasis and
scope that will matter.
In reducing tax and tariff rates with a view to encouraging domestic
investment, there is again a similarity with the Malaysian economic policy.
So, in this context as well, it would again be important to recall what
Anwar Ibrahim said. While advocating government supervision and monitoring
of private sector activity, the Malaysian finance minister asserted, "The
government must also see that companies balance their pursuit of profit
with a firm commitment to discharge social responsibility. A government
that goes all out to promote private businesses must ensure, through laws
and regulations as well as informal incentives and disincentives, that
these companies behave as responsible corporate citizens ..... a government
that gave unqualified support in selfish businesses would also have to face
the anger of the ordinary citizen".
Selfish businesses
And, it is precisely the selfish pursuit of profits that Pakistan's
businesses have remained engaged in primarily in the past which is one of
the critical factors that has contributed to the problems of tax evasion
and loan defaults. In the 80s, when the private sector was pronounced the
engine of growth, businesses proliferated by taking full advantage of the
70-30 per cent debt-equity ratio. Even out of the 30 per cent equity, the
sponsors' original contribution came to about 5 per cent with the remaining
portion of the equity shared either with institutions, other sponsors, and
the general public. So, the original sponsor would recover his 5 per cent
share fast, make gains, and move on to go getting other units sanctioned
and installed. As the sponsors spread themselves too thin, the units set up
thus, met with sponsor/management apathy and neglect which was one of the
various factors that contributed to poor business performance and inability
to service the loans that the enterprises had obtained.
So, while political influences did contribute to loan defaults, another
significant contribution was made by management's own lack of interest and
attention ion the sponsored units for which they had even borrowed heavily.
This is the significance of micro-level business behaviour which, if
repeated, will bring us to yet another dead end from which it might be even
more difficult to reverse and start another journey. It is little wonder
then that all and sundry including the government are adopting a "wait and
see" posture and hoping for a miraculous turnaround in the behaviour of
business and industry in the country. It is being hoped that growth and
development will now occur as a result of tax and tariff cuts.
Since many in the country seem inspired by Malaysia in the light of which
the rapid tax and tariff cuts are being further justified, it is important
to draw even greater insight from their experience, for even if growth
occurs, the fruits of growth should be widely shared without expecting
another generation or two to wait for the trickle. As aptly stated by the
Malaysian finance minister, "By growth we mean good growth, that is, growth
with equity, growth that builds solidarity, growth that enhances cultural
identity, growth that promotes democracy and civic consciousness, growth
that keeps the environment in tact, and, above all, growth guided by
ethical precepts". Application of just one or two factors from a successful
country's experience will show results only if these factors are
supplemented and complemented by a most of all those other factors whose
combined application was actually responsible for the success.
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970407
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Raising our stature in international trade
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Javed Bashir
THE REMOVAL of regulatory duty on imports and reduction in customs tariff
carries forward the process of reform to encourage export growth
However, if Pakistan is to substantially increase its share in world trade
from the current 0.2 per cent, a comprehensive approach will have to be
adopted for the purpose. The government plans to double its share which
means that trade will have to grow at the rate of 20 per cent per annum.
Pakistan was not able to benefit from the Uruguay Round due to less than
average tariff reduction in its export product area and the slow
integration of the textile sector into GATT.
Not only must it contribute to development of an efficient export sector,
but also meet the challenge of non-tariff barriers being erected by the
developed countries. Obligations under the WTO, especially as regards
labour standards, health and environment also have to be met.
Probably the most worrisome aspect in the export sector is the
vulnerability of our leading export products textiles and clothing to
restrictive trade regime.
There are other significant exports, including leather products, rice, fish
and carpets, but the concentrated export structure has led to distortions
and restrictions, especially under the MFA. Opportunities in this product
area have a major influence on economic growth.
With the deadline for the integration into WTO drawing near, the key
question is how will Pakistan's textile and clothing industry react to the
shock of unrestrained competition with major suppliers.
How is Pakistan preparing itself for competition when quotas are phased out
by the year 2005? There admittedly will be transitional safeguards whereby
an estimated 80 per cent of textile and clothing products, including a
large number of value added items, will not be integrated until 2005. This
is the time to prepare for the challenge and also adopt short-term measures
to boost exports.
Recent moves regarding elimination of SROs help to remove some of the
perverse features of the tariff structure and aim at making exports
relatively efficiency-based. However, additional measures are required to
make our exports competitive. Several countries have called for tougher
rules that would address anti-competition practices.
Their argument is that many international monopolies and cartels generally
fall outside the reach of national authorities. Appeals are being made that
the WTO should have a role in regulating their activities to ensure that
foreigners are not discriminated against.
Unfortunately, an understanding of the complex international trading system
is lacking just when the powerful industrial countries are adapting WTO
rules to their advantage while Pakistan has not even started legislation
work for dealing with pressing concerns like customs valuation,
intellectual property rights, services, including banking and insurance.
Pakistan must identify its weaknesses and strengths to improve its exports
because it has the potential to benefit from the tariff reductions by
industrial countries in manufactured goods.
Under the Uruguay Round, there will be no tariff or quantitative curbs on
exports from developing countries on labour-intensive products like
furniture and toys. The quality of these products of course has to meet
international standards for better market access. In this regard, however,
concerns arise from threats posed by new entrants.
About 40 per cent of our exports are low skill-based and labour-intensive
and hence vulnerable to shifts in demand. Pakistan ought to upgrade the
value of goods and also introduce skill intensity into exports.
The modern investor is no longer only attracted by low wages leading to low
productivity. More and more developing countries are laying emphasis on
literacy enhancement and trainability of their workers which have paid
dividends. Together with a better understanding of the international
trading system joint venture programmes can be evolved to reduce dependence
on textile and clothing.
To make Pakistan competitive means producing more and more of what the
world demands. In this context, increasingly it will be called upon to
diversify production by going into new industries and evolving a viable
industrial policy.
The government has addressed some key aspects of tariff reform. Devaluation
has not particularly helped in the past, though an overvalued exchange rate
is usually a deterrent to export growth.
In Pakistan's context, massive devaluation can have serious implications
for debt-servicing in particular. Thus, tackling the high inflation rate
should be a major concern. Bringing it down is not easy, but if sustained
measures are taken to reduce expenditure, minimise taxation on production,
discourage consumption and meet the fiscal deficit, the results can be
encouraging.
The business community, too, must make efforts to meet the challenge. The
task has to take account of market-depressing measures including anti-
dumping and counter-vailing duties, but with a better understanding of the
WTO and an open trade environment, the going can improve.
After all, if Pakistan, like other developing countries, has obligations,
it also has rights in the trade regime. The business community would do
well to adjust itself to the new challenge in its own interest, updating
procedures and modernising trade practices.
New issues
A whole lot of new issues have been brought into trade. Corruption is also
likely to be on the agenda in future. Lack of experience can be major
handicap. In this context, the responsibility of the government has also
increased manifold.
It can greatly help by providing information about standards required,
including those in the field of labour and environment, as well as
safeguards available to compete in the international market.
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970407
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Three-dimensional power crisis looms on horizon
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Sultan Ahmed
PAKISTAN is heading towards a major three-dimensional power crisis with new
developments adding to the old complications.
If the chronic shortage of power along with frequent breakdown in supply
and planned loadshedding created one set of critical problems for the
country, the coming surplus in power and the varied incentives for
corruption it offers in our context would create another set of major
problems with their tremendous adverse impact on the economy and the
balance of payments crisis.
Pakistan is committed to buying power from the private sector power
producers at 6.5 US cents per unit or kilowatt hour, and that keeps on
expressing itself in rising rupee prices as the Pakistan currency continues
to be devalued steadily.
The higher the power prices and more frequent the rise in rates the
stronger the incentive to steal power not only by those living in Katchi
Abadis who use Kundas, with or without the help of the KESC staff, but also
by industrialists and those who live in posh housing societies and use many
air-conditioners.
Theft rate
A few years ago the rate of theft and loss of power in KESC was around 26
per cent, and as the price of power kept on rising, the rate of theft and
loss went on soaring and it now stays at 40 per cent.
Mr Mustafa Khar, as minister for power, had ordered the rate of loss and
theft should be brought down by June 30 to 24 per cent, but that remains a
distant dream, Meanwhile the rate of loss of KESC has risen far above that
of WAPDA with its 30 per cent of the power produced, and WAPDA caters to
the whole country instead of Karachi alone as KESC does.
More and more power is coming on-stream like the 1,350 MW of HUBCO. In
addition, other private sector power plants, including those of foreign
producers, are coming on-line along with many of the major companies like
ICI or the Kohinoor or Mansha Group producing their own power to meet to
meet their needs instead of having to pay high prices for the power
produced by the private sector and distributed by WAPDA or KESC at a far
higher cost.
That means the surplus power is on the increase as a result of reduction in
demand through under-utilisation by the 4,000 sick industrial units -- of
which 2,500 are closed, according to finance minister Sartaj Aziz -- some of
the industries producing their own power and selling their surplus, and
more large units like coming in stream with HUBCO's 1,350 MW and KESC's own
output increasing. The government is committed to buying 60 per cent of the
output of private plants but cannot distribute all of it to industrial and
commercial users and domestic consumers because of the old transmission and
distribution lines.
Karachi's transmission and distribution systems are as old as 30 years.
Only a small part of that has been replaced in recent years. There, too,
very shoddy work has been done as in the case of the two towers at Boating
Basin, erected at a cost of Rs 10 million which collapsed after they had
lasted for just a year and the guarantees had expired. The official
responsible for the loss was not punished but had prior to that been
promoted as Managing Director.
Inefficient KESC
Maintenance and efficiency levels in KESC are so low that last month when
the Jamshoro power main to Karachi failed suddenly, the system tripped in
too many places in Karachi, but no one seemed to know for long the basic
reason.
The WAPDA officials at the Jamshoro did not care to inform the KESC
officials who suspected all kinds of failures in the city as the main
reason for the day long power failure in most parts of the city. This level
of inefficiency would not to tolerated, and much less condoned, in any
modern country which cares for its industrial efficiency but this has been
the norm in Pakistan.
Power theft by the powerful is so blatant that a federal minister stole
power for his apartment in a luxury complex in the city for years. And that
encouraged the sister of a senior staffer of the Prime Minister's
secretariat to do alike with absolute impunity. That means the higher the
output of power and higher the power rate, the larger will be the theft
rate, and consumers who do not steal power pay for those who those who
steal.
The third dimension of this problem is that as the new power, including
HUBCO is based on fuel oil, the oil import bill which is around $2.5
billion now, will go on rising and the projection is that after two years
the oil bill may rise to $5 billion.
How are we to pay for this additional $2.5 billion at a time when our
exports are inching up too slowly and the foreign trade deficit which last
year recorded a deficit of $3.6 billion is expanding.
The fact is that Pakistan has not only to provide for foreign exchange to
import increasing quantities of oil but also furnish the foreign exchange
to remit the larger profits of the foreign power producers as well as
import spares and other equipment for power production. All that will
inflate the foreign exchange needs of the power industry a great deal.
We now ought to have rapidly rising foreign exchange earnings to meet such
commitments. And they can be come available only if our exports rise
rapidly and the value-added in the exports increase steadily. And that
calls for a real industrial revolution beginning with full revival of the
4,000 sick industrial units and setting up of new units, particularly in
the textile sector, for increasingly value-added exports.
Heroin earnings
Persons who live in posh bungalows and use a great deal of power and pay
for that too, because of their heroin earnings or income from corrupt and
criminal practices, will not bring in foreign exchange to the country, at
least not to the foreign exchange kitty of the country. So we need a
lasting and total industrial and export revolution to pay for the cost of
oil and other needs of the new power industry.
Meanwhile, there is a real crisis in the established power sector in the
country. WAPDA and KESC do not have the money to pay their Rs.6.5 billion
oil bills of the PSO. So PSO, the state oil company, has no money to pay Rs
5 billion to the Pakistan Refinery, National Refinery and others.
At the other end, the contractors and suppliers of WAPDA have been
protesting they have been hit hard by the failure of WAPDA to clear their
dues of Rs 2 billion, which they themselves have to pay in their turn to
their suppliers.
Sui Gas and Sui Northern are in real trouble as the government increased
the prices they had to pay to the producers of gas like Pakistan Petroleum,
and at the same time the two gas companies have not been allowed to
increase their sale price. As a result, the companies are not paying PPL
and other gas producers who are in real financial trouble as a result.
Sui Southern had assets of Rs 20 billion last year but its pre-tax profit
was only Rs 1.04 billion. Sui Northern too had assets of Rs 20 billion last
year but its pre-tax profits sank to a dismal Rs.0.67 billion. Compared to
that, the PSO had sales of Rs 80.5 billion and pre-tax profit of Rs.4.15
billion, but has a real cash crunch as WAPDA and KESC are not paying their
oil bills.
Now there is a critical shortfall in gas production which is expected to
increase from 1,400 million cubic feet per day now to 8,400 MMCFD per day
in December and far worse in the coming years.
The shortage is to be met through indigenous efforts to boost gas
production following a new policy and import of gas from abroad. But the
cost of building a gas pipeline of 910 miles from Turkmenistan to Multan is
$2 billion dollars and from South Pars in Iran to Karachi $3 billion, where
to get the foreign exchange when the light at the end of our balance of
payments tunnel is too murky?
Increasing hydel power output can be a better solution ecologically and
would cost far less in foreign exchange. But while Kalabagh dam remains too
contentious to be built, Ghazi Barotha which is to produce 1,450 MW at a
cost $2.25 billion by the year 2000 is making too small a headway for want
of enough money.
The NWFP has now come up with a scheme to set up 12 hydel plants there with
a total capacity of 3,610 MW at a cost of $4,280 million and it has set up
a Sarhad Hydel Development Organisation which estimates the province has a
total hydel power capacity of 20,000 MW.
The problem again will be money and that also means large areas of the
province going under water and possible objection from the inhabitants of
such areas.
Now the government proposes to privates the POL, Oil and Gas Development
Corporation and the two gas companies with estimated assets of Rs 81
billion. But how soon will that be done is unclear.
Meanwhile, the government has to agree to increase gas prices and lower the
theft and loss of gas which has risen to 11 per cent compared to the world
average of two per cent. Mr Sartaj Aziz has said that the prices of gas and
power would not be increased. But this scribes believes that assurance is
valid only until the next budget and not perennially.
The new buyers of the gas companies would certainly ask for higher gas
prices and preferably a free hand in fixing gas prices. That may become all
the more necessary if the massive investment sought for bringing gas from
Turkemenistan and Iran are to materialise and foreign investors are to be
sufficiently interested in expansion projects with their long gestation
periods.
The government also proposes to privatise power distribution in Karachi,
preferably through four companies as reported, while power production and
transmission would remain in government hands. The government hopes to cut
down theft of power in this manner. But the unions which vehemently oppose
privatising billing in KESC would try to block this process as well in view
of the large illegal gains of their members.
The model for KESC should be Singapore where the state-owned Singapore
Power has lost is monopoly in the island and is going into various new
ventures including tele-communication with its large assets of 7 billion
dollars and major investments abroad.
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970407
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A spectacular act of faith
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M.B. Naqvi
THE SHORTEST comment on the economic policy package announced by the
Finance Minister Sartaj Aziz on March 28 can be: it is a massive act of
faith in the business community by Prime Minister Nawaz Sharif. However,
such brief descriptions are not enough in daily life. All the issues
involved have to be underlined and interpreted.
The government is proposing to forego possibly a lot of money at a time
when it is so strapped for cash. Some estimates of the losses to be
incurred initially go up to Rs 40 billion.
No doubt Mr Sharif regards them as an investment. If Pakistani businessmen
respond the way he expects, the eventual results will more than recompense
for the losses now being willingly suffered. But it is not a question of
simple personal trust by the PM in the good intentions of businessmen and
their expected moral behaviour in paying up all the due taxes. There is
more to it than individual trust.
All of it is based on orthodox economic doctrines that inspire the thinking
of his economic team. Only, these doctrines are variously known as
Friedmanism, Reaganomics, Neo-classicism or the supply-side economics.
The engine of growth under this doctrine is investment. It envisages
policies that favour businessmen and enables them to save more of their
profits so as to invest more. This is achieved by giving them tax
concessions and various incentives to make their job of investment-making
easier.
This was a sharp departure from the school that had held sway till the late
9170s and early 9180s. The earlier school had relied on demand: An increase
in demand was held to drive all the economic motors. Create demand and
businessmen will fall over one another to invest in the hope of making
profits simply because the demand exists.
This particular orientation of economic policies (or demand-led growth) had
come to be known as Keynesianism, derived from J.M. Keynes.
The Keynesian technique was first designed to tackle the economic mess that
the earlier (classical or orthodox) economic policies had created in the
1"0s. Now, those earlier orthodox economic policies were based on ideas
that are substantially the same as now underlie Friedmanism.
The 1970s was the period when most (developed) governments went broke and
their economies were in an unending slump, with widespread unemployment and
hunger.
By acting according to Keynesian doctrine, Europe, America and other OECD
countries performed miracles and overcame and rectified the destruction and
dislocation of history's greatest war (1939-45).
For about 30 years or more after that war, the world witnessed an
unparalleled prosperity; even some newly decolonised economies made limited
progress. But Keynsianism also caused a lot of trouble by unleashing
inflationary spirals that were sought to be corrected by Friedmanism.
This historical reference is only for perspective's sake. No theoretical
discussion is intended. In principle the chances of the success of the
economic policies now being put in place by Mr Sartaj Aziz are broadly the
same as for supply side economics anywhere else. Not that these policies
are entirely new.
Most finance ministers in recent years have come to believe in them and
have been moving in the same direction, only Mr Aziz has moved quickly
virtually headlong. Since such policies are working in so many developed
countries and also in India reportedly to much advantage, we Pakistanis can
also reasonably hope that Mr Sharif is not doing something altogether too
extraordinary.
The BoP crisis
That brings us to the central question. The number one task for the Sharif
government is to resolve the balance of payments crisis and then to set the
economy on the path of steady growth and further development.
He has been explaining his strategy and it made sense (mostly in theory):
he would, with the help of his Debt Retirement Fund (DRF) and the proceeds
of privatisation retire the outstanding loans, the short-term ones being
the first because they carry high interest rates.
The revitalisation of the economy and putting it on a growth projector,
both as an objective in itself and as a supplementary help for tackling the
BoPs crisis. Indeed the primary interest at this stage in the economic
package would be whether it would actually serve the subsidiary purpose of
helping overcome the BoP crisis the way the PM originally thought. That
requires to be assessed.
Insofar as the economic package is concerned, it should primarily be seen
as an objective in itself, though its utility in the short run is also
important.
The process that Finance Minister has now started and will be furthered
with the next 1997-98 budget. But that will be the initial stage.
It will take sometime to get into stride and start producing results. There
will be an inevitable time lag. The famous bugbear, viz budget deficit, is
not likely to be meaningfully tackled in this and many be even the 1998-99
budget; indeed the next fiscal year would start with a big handicap of
reduced resource mobilisation as a result of the tax breaks and other
downward rationalisation on tariffs and taxes.
That the effect to these measures is likely to be good in subsequent years,
though growth processes should be getting into stride soon after the start
of 1997-98. That would open up brighter prospects and everyone will agree
that this part of the strategy may not offer any material help in the
immediate worry over the BoP deficit.
On the contrary, the immediate impact might not be good at all. Thus the
reliance for tackling the BoP crisis will remain on (a) DRF; (b) other
short-term loans and (c) IMF help, as an outside chance. Something more
needs to be said about the IMF.
Ties with IMF
As of now, relations with the IMF are in deep freeze and the hopeful
sounding statements from it notwithstanding.
It has suspended the Standby arrangements and no money is to be expected on
that account. The government hopes that the economic policy package of
March 28, would impress the IMF -- indeed it was calculated to do so seems
to have done so -- that it may start negotiations with Islamabad for a
ESAF/EFF loan of $1.5 billion over three years at 0.5 per cent.
The hope includes the time-frame, i.e. that by August/ September. But the
negotiations can only start by the third quarter of the current calendar
year or perhaps just after it; IMF can scarcely afford not to examine the
1997-98 Budget for its likely impact.
Insofar as hopes are concerned, there is nothing more to be said; they are
just hopes. For its part, IMF authorities are neither hobgoblins nor are
they simpletons. As hard-nosed bankers they would assess the chances of the
hopes and would wait until the expected results start flowing in before
they disburse any tranche of the new loan, supposing they agree to
negotiate and do make the agreement in about the timeframe that Mr Sartaj
Aziz has in mind.
The IMF people have actually been exasperated by the conduct of Islamabad
over the implementation of agreed conditionalities. They are also probably
somewhat frightened by Islamabad's inability to deliver.
Insofar as it can be ascertained and assessed, their quiet insistence on
such stark reductions in expenditures is still there. The reason is that
they do not believe that the government can actually realise all the taxes
it imposes, thanks largely to the non-tax paying culture of the business
community, the obverse of which is the corruption in tax collecting
machinery. It will take some time and actual results to convince the IMF
that a turnaround has taken place in revenue collections; mere statements,
new policies and hopes are not going to be enough for them.
That leaves the BoP problem where it was. The purport of all this is that
the IMF help for the BoP crisis cannot be relied upon in any near future.
The effort has to concentrate on the DRF and more loans.
The real difficulty in the BoP today is that most of the short-term loans
that become due for repayment are required to be paid back; most
international banks, with the given credit rating of the country, may be
reluctant to let them be rolled over. That is the real crisis. Which is why
debt servicing requirements have shot through the roof.
The reliance, as we have seen, has to be on the DRF and whatever money the
Privatisation Fund can spare in hard currencies. Insofar as the latter is
concerned, its ability to foot the entire bill for retiring the short-term
loans is limited by its own cash inflows that are themselves relatively a
longer-term proposition.
The PF's ability to provide substantial amount of hard currencies in the
short run is doubtful. Its contributions can only be expected in the next
two or three years, at the earliest, if the privatisation processes are to
remain scientific and transparent.
One particular difficulty that the government will face is the Budget of
1997-98. It is bound to show reduced revenues and thus higher budget
deficits.
This is sure to put off the IMF and World Bank experts. Insofar as their
recommendation on drastic reductions in budget deficit is concerned, it is
easier said than done. Islamabad and IMF cannot be accused of contemplating
a reduction in debt servicing, much less in defence, which are the only two
substantially big items in which cuts will mean anything.
The problem is sure to be aggravated with the multilateral agencies largely
because of the twin failures of Islamabad: in cutting expenditures by
notably hefty margins and in raising more revenues while the ambience of
high inflation persists. Meanwhile, the BoP crisis seems likely to persist
for the next two to three years.
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970408
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Consultation on Islamic banking
-------------------------------------------------------------------
Ansar Abbasi
ISLAMABAD, April 7: The government is contacting top bankers both within
and outside the country to evolve an Islamic banking system in Pakistan as
announced by the Prime Minister in his inaugural speech on February 26.
Senator Raja Zafarul Haq, who has been made chairman of the committee for
the elimination of Riba (interest) from economic system of Pakistan, told
Dawn that a senior official of the International Monetary Fund (IMF) had
also been invited to give his views on the government's proposed move.
The Senator, said that he had already contacted the experts from Saudi
Arabia, Egypt, Sudan and some other Islamic countries to propose a
practicable Islamic economic system for Pakistan.
Abbas Mirakhor, the Executive Director in the IMF, Raja said, had also been
contacted to give his view on the subject. "I have already met the senior
executives of Al-Faysal Bank and heads of different banks in Pakistan to
take advantage of their experiences," he said.
The Senator said that the recommendations of the Council of Islamic
Ideology and works of scholars like Dr Ziauddin, head of Islamic
Department, Islamic University Islamabad, Dr Nijatullah Siddiqi were also
being consulted for switchover to the new system.
He expected that the members of the committee would be appointed anytime
during this week so that the assignment could be completed without
unnecessary delay.
Responding to a query, he said there would be no compromise on Sharia't
and
the recommendations would be formulated with utmost care. He informed that
a very large number of banks in different parts of the world were operating
without Riba. "Even the international banks like Merill Lynch have also
introduced a section of interest-free banking," he said and added, "this
is
being done because it has been found feasible and practicable by the
international bankers."
Without giving any deadline for the completion of committee's
recommendations, he said the proposal when framed would be put before the
country's top economists and Ulema for further consideration.
To understand the exact meaning of Riba which is an evil in Islam, he said
the people were required to be educated. He disagreed with the existing
general perception of Riba.
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970410
-------------------------------------------------------------------
IMF keen to know cost of economic reforms
-------------------------------------------------------------------
Mohiuddin Aazim
KARACHI, April 9: The International Monetary Fund (IMF) has asked Pakistan
to disclose the cost of the recently-announced economic reforms but it has
set no deadline for the purpose.
"There is no question of setting deadlines," a source close to the IMF
told
Dawn on Wednesday. "But we are consulting Pakistani authorities to know
what is the cost of the reforms."
The Fund is eager to know this so that it can evaluate the reforms and
project its possible impacts. "Pakistan also needs to work out the cost of
the reforms for its own use," said the source adding that it would help in
drawing up the budget.
Finance Minister Mr. Sartaj Aziz and Finance Secretary Mr. Moin Afzal could
not be reached immediately to learn what is being done in this regard.
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970411
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Working group to simplify IT Ordinance
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Ihtashamul Haq
ISLAMABAD, April 10: The federal government has appointed a six-member
working group headed by deputy chairman planning commission Dr. Hafiz Pasha
to recommend improvement in the "Income Tax Ordinance" for increasing the
number of tax-payers in the country. Informed sources told Dawn that the
minister for commerce Ishaq Dar presided over here on Thursday a meeting of
the Tariff Reform Committee to look into the issue of increasing the tax
payers without harassing them.
Dar is the Convener of the Committee while prime minister's advisor on law
and justice, Khalid Anwar, Interior minister Chaudhry Shujaat Hussain,
Lt.Gen(retd) Majid Malik, Secretary finance and chairman Central Board of
Revenue(CBR) are the member of the committee. Sources said that the
commerce minister told the meeting that the government desperately needed
funds which could only be generated if the number of tax payers were
increased without harassing and creating problems for them.
And that was why a working group was set up which will finalise its
recommendations before the end of April to be placed before the cabinet
for final approval and effective implementation. Advisor on Law and
parliamentary affairs Khalid Anwar inquired about various things to
improve the prevailing Income Tax Ordinance. He particularly asked
secretary commerce Iqbal Farid, who has long been associated with the CBR
specially as member income tax, as to why there has not been any serious
effort to increases the number of tax-payers.
Sources said that the meeting also deliberated on the issue of simplifying
the Income tax Ordinance which was said to be too complicated and vague.
The meeting was of the view that since there was no documentation of the
economy, the effective implementation on the ordinance was not possible.
Khalid Anwar told the meeting that prime minister did not want harassment
of the old and new tax payers and that matters pertaining to increasing tax
base of the country be sorted out in a harmonious manner. However sources
said that it was the consensus of the meeting that the concealment of
income tax be taken very seriously and that new laws be framed to deal with
the problem.
Both the minister for Commerce and advisor on Law said that those who had
the potential to pay their tax should be advised to pay before any strict
action was taken against them. The meeting expressed satisfaction over the
curtailment of the powers of the income tax officers to visit the premises
of the tax-payers. Sources said that the working group would assess as to
how much was being paid as income tax by the bigger markets such as Liberty
and Shah Almi of Lahore and various others of the country.
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970412
-------------------------------------------------------------------
KSE 100-share index suffers fresh fall of 6.31 points
-------------------------------------------------------------------
Staff Reporter
KARACHI, April 11: Share values on the Karachi Stock Exchange on Friday
fell further but larger decline was resisted thanks to the presence of
stray institutional support at the dips.
However, physical activity was significantly affected by Sharjah cricket
cup final match between Pakistan and Sri Lanka as a good number of leading
brokers were busy listening to commentary rather than share trading.
The absence of cricket lovers from the rings is well reflected in the lower
volume of about 27m shares from the average daily turnover of 40m shares.
The KSE 100-share index showed a fresh fall of 6.31 points at 1,549.83 as
compared to 1,556.14 a day earlier, reflecting the weakness of the base
shares.
The breach of the resistance level of 1,550 though fractionally signals
that the current downward slide will continue during the next week too
despite strong selective support on some of the blue chips, some dealers
said.
But some others said the market did rebound more than twice after breaching
the psychological barrier of 1,550 during the last three months and this
time too it will behave in the same fashion and the coming week could see a
lot of covering purchases at the lower levels.
Floor brokers said although there was no change in political background
news, notably the Sindh politics, as meeting between the leaders of the
Sindh coalition partners has partially defused the current tension. "News
that the government has finalized a package $2.3bn for the consortium aid
after the budget sometime in June is expected to boost the market by the
next week", they added.
They based their perception on expected boost as it reflected the
confidence of donor countries in the potentials of Pakistan's economy.
What was more disturbing was that the textile sector which had been showing
signs of recovery during the last several weeks again ran into profit-
selling and erasing most of the previous gains.
Cement, energy and bank shares did attract stray support at the lower
levels but it was too feeble to evoke a sympathetic support on other
counters.
The declining issues were,therefore, again led by some leading MNC, notably
Lever Brothers, Pakistan Gum Chemicals, Pak-Suzuki Motors and Parke-Davis,
which suffered decline ranging from Rs 1.25 to 5.
Among the local blue chips, which followed their lead included PSO,ICP
SEMF, Adamjee Insurance, Gatron Textiles and IGI, falling by one rupee to
Rs.2.
Textile shares, which showed large decline were led by Ideal Spinning,
Premier Textiles, Tariq Cotton and Star Textiles, while others fell
fractionally.
However, all was not bad as some of the leading shares managed to finish
modestly higher under the lead of Pakistan Oilfields, Singer Pakistan,
D.G.Khan Cement and Grays Leasing, falling by one rupee to Rs 2.
Javed Omer, Ghani Glass, Burshane Pakistan and Benz Industries also rose
modestly on stray short-covering.
Trading volume fell to 26.520m shares from the previous 48.752m shares
owing to the absence of leading dealers.
The interesting feature was that PTC again assumed the role of the most
active scrips after relegating the ICI Pakistan into the secondary
position.
The most active list was topped by PTC vouchers, lower 15 paisa on 8m
shares followed by ICI Pakistan, easy five paisa on 6.500m shares, Hub-
Power, down 15 paisa on 5m,Dewan Salman, easy five paisa on 3.100m and FFC-
Jordan Fertilizer, off 25 paisa on 1.200m shares.
Other actively traded shares were led by D.G.Khan Cement, up 15 paisa on
0.600m shares, followed by Dhan Fibre, easy five paisa on 0.500m, Maple
Lead Cement, unchanged on 0.2'm and Nishat Fabrics, up 70 paisa on 0.135m
shares.
There were some other actively traded shares also.
There were 296 actives, out of which 183 shares suffered fall while 43
rose, with 70 holding on to the last levels.
-------------------------------------------------------------------
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970406
-------------------------------------------------------------------
Consistent honesty?
-------------------------------------------------------------------
Ardeshir Cowasjee
HOW fortunate can a man be? Take me, for example. I have had the pleasure
of knowing, partaking of their wisdom, and enjoying the company of Allah
Baksh Kadir Baksh Brohi, Syed Sharifuddin Pirzada, and Brohi's protege,
Khalid Anwer.
Friend Brohi is with us no more. Friend Sharifuddin is very much around,
but for the time being enjoying a sabbatical. One can but admire his self-
confidence, as he is still sure that he can convince his Maker (if his
Maker will hear him) that all he has done upon this earth has been good and
just. Khalid is on his way up. He successfully had Nawaz's dissolution
overturned. He successfully had Benazir's dissolution upheld. Now he has
had 58(2)(b) erased from the Book. As a member of the government, he bears
a great deal of the collective responsibility for any action taken by this
government, for he is by far the brightest, the most finely educated, the
most well-read, and the most balanced of the democrats amongst whom he
sits.
How often can a man write the same thing, over and over again:
"Every citizen of this country who can read, write and think, can say
without any fear of contradiction that it is, and always has been, the
intent of all our leaders (barring the first), to enforce their will, to
tailor the constitution and all of the laws of the land and to interpret
them to suit their own special needs so that they may remain in power for
ever. During the early years, the leaders did make some sort of effort to
pretend that they had the interests of the country and its people at heart,
bogus though it may have been, but since 1 -- 1 even pretence has been
discarded. Now, it is total blatant glasnost; machinations, schemes and
scams are publicly, fearlessly and contemptuously aired.
"The whole wise world knows that whatsoever be the foundation of a
democratic government, whether it be the Magna Carta, the Declaration of
Independence, 'Liberte, Egalite, Fraternite', the Objectives Resolution, or
whatever, the democratic grundnorm is firmly based on the belief
expostulated by Jefferson,'that all men are created equal and independent,
that from that equal creation they derive rights inherent and inalienable,
among which are the preservation of life and liberty and the pursuit of
happiness' ".
The 1973 Constitution was passed by consensus by the many members who
believed that as it guaranteed fundamental rights it was better than no
constitution at all -- and certainly better than martial law. None
dissented. The few who were not happy with it abstained.
Before the ink was dry, within four hours of its promulgation, the people
of Pakistan were deprived of all their constitutionally guaranteed
fundamental rights through a Gazette Notification issued by the maker of
the Constitution, Zulfikar Ali Bhutto. Fundamental rights having been
rendered non-justifiable, he had all his political opponents arrested. They
were held in various jails until released by Zia four years later.
Not satisfied with the Notification, Bhutto had his constitution amended
seven times between its promulgation on August 14, 1973, and July 5, 1977,
the date of his fall from grace.
An amendment of a constitution is an extraordinary measure necessitating a
great deal of deliberation on the part of the ruling party, consultation
with the opposition, and a careful and objective study of public opinion on
the subject. Its passage through the legislature must be deliberately
regulated to ensure full discussion, to provide ample opportunity for
criticism.
According to the rules of procedure that govern parliamentary procedure
under the 1973 Constitution, a bill, other than a finance bill, upon its
introduction in the house must be referred to the relevant standing
committee, unless the requirements of the rules have been dispensed with by
the house through a motion of the relevant member. The standing committee
is asked to present its report within 30 days. When this is received,
copies of the bill (and any changes recommended by the committee) are to be
supplied to each member within seven days. Two clear days must then elapse
before the bill can be sent down for motion.
These rules were suspended by Bhutto for the passage of the Second, Fourth,
Fifth, Sixth and Seventh amendment Bills. The First Amendment Bill was
introduced in the house on April 15, 1974. The standing committee presented
its report the next day and within a week it was passed leaving no time for
debate. The Third Amendment Bill was introduced on February 11, 1975, the
required report was presented and the Bill passed the next day.
However, in those days men did exist who did object to the roughshod
methods used to bulldoze amendments through the house, men such as 'Tiger'
Mahmud Ali Kasuri, Malik Mohammed Suleman, Chaudhry Zahur Elahi, Mufti
Mahmood, Prof Ghafoor Ahmed, and Ahmed Raza Kasuri. At one point, upon the
instructions of the Speaker, Mahmud Ali Kasuri, and Zahur Elahi were
physically lifted and thrown out of the house. The others were manhandled
and pushed out. This was done by men brought in by the Sergeant-at-Arms as
instructed by the Prime Minister who was in the house that day watching the
operation.
Then came the Zia-Junejo era. The Eighth Amendment Bill was passed in 1985.
The rules were not suspended. Debates continued for around six months
before it was passed. The Ninth Amendment Bill (concerning Islamic
injunctions) was introduced but never passed. The Tenth Amendment Bill, a
bread-and-butter bill (amending Article 54 and 61) was passed after due
deliberation.
The Eleventh Amendment Bill (women's seats) was introduced in Benazir
Bhutto's first round and was not passed.
The Twelfth Amendment Bill (special courts) was introduced by Nawaz Sharif
in his firs round, the rules were suspended, it was rushed through with
little discussion and passed.
The thirteenth Amendment Bill was introduced in both the National Assembly
and the Senate on the same day, April 1, and it was passed that same day,
without any discussion, without one member ever rising to ask why the rules
were suspended, or to suggest there be a discussion. The government and the
opposition unanimously approved its passage. Not a dog barked.
The only occasions in the past where there has been complete unanimity
between the treasury and the opposition have been on those occasions when
bills have been introduced concerning the salaries, perks and privileges of
the honourable members. The motivation on those occasions was pure greed.
The motivation on April 1, was also greed, greed for unrestrained power.
This is what the Thirteenth Amendment is all about:
Article 58(2): Notwithstanding anything contained in clause 2 of Article
48, the President may also dissolve the National Assembly in his discretion
where, in his opinion --
(a) a vote of no-confidence having been passed against the Prime Minister,
no other member of the National Assembly is likely to command the
confidence of the majority of the members of the National Assembly in
accordance with the provisions of the Constitution, as ascertained in a
session of the National Assembly summoned for the purpose; or
(b) a situation has arisen in which the Government of the Federation cannot
be carried on in accordance with the provisions of the Constitution and an
appeal to the electorate is necessary.
(b) deleted
Article 101 (1): There shall be a Governor for each Province who shall be
appointed by the President after consultation with the Prime Minister.
Now reads: There shall be a Governor for each province who shall be
appointed by the President on the advice of the Prime Minister.
Article 112(2): The Governor may also dissolve the Provincial Assembly in
his discretion, but subject to the previous approval of the President,
where in his opinion:
(a) a vote of no-confidence having been passed against the Chief Minister,
no other member of the Provincial Assembly is likely to command the
confidence of the majority of the members of the Provincial Assembly in
accordance with the provisions of the Constitution, as ascertained in a
session of the Provincial Assembly summoned for the purpose; or (b) a
situation has arisen in which the Government of the Province cannot be
carried on in accordance with the provisions of the Constitution and an
appeal to the electorate is necessary.
(b) deleted
Article 243 (2): The President shall, subject to law, have power --
(a) to raise and maintain the Military, Naval and Air Forces of Pakistan;
and the Reserves of such Forces;
(b) to grant Commissions in such Forces; and
(c) to appoint in his discretion the Chairman Joint Chiefs of Staff
Committee, the Chief of the Army Staff, the Chief of the Naval Staff and
the Chief of the Air Staff, and determine their salaries and allowances.
In (c) "the words in his discretion" are omitted.
Nawaz Sharif and his government had all the power needed with their two-
thirds majority to enable them to do good by the people. Were their
intentions honest and clean, they should have had absolutely no fears of
even the possibility of 58(2)(b) being used against them. However, they
know that amendment or no amendment, the real power rests where it always
has rested.
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970410
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Let 8th Amendment go as a whole
-------------------------------------------------------------------
Senator Iqbal Haider
AT long last the controversial Article 58(2)(b) of the Constitution has
been repealed by the Constitution (thirteenth Amendment) Bill passed
unanimously by both houses of the Parliament. Such unanimity on a
constitutional issue is by itself an event to cherish and be proud of. It
is almost after 24 years that the nation has seen such a demonstration of
unanimity/consensus among all the political parties in the parliament.
The Thirteenth Amendment Bill is historic not only for repealing the
infamous Article 58(2)(b) but also for creating the needed understanding,
harmony and consensus among the political leaders in this otherwise
polarised political atmosphere.
It is a matter of pride that when the nation is celebrating the fiftieth
anniversary of its independence such an unprecedented demonstration of
unity and understanding has taken place, giving the lie to the propaganda
that even after fifty years of its existence, Pakistan is still in search
of a viable system of governance. Now we can claim with confidence that
people of Pakistan continue to have faith in the federal parliamentary
democracy as envisaged by the father of the nation, Quaid-i-Azam Mohammad
Ali Jinnah. Such consensus and understanding is not easy to achieve. We
were fortunate to have it on this constitutional issue. This congenial
atmosphere should be used for achieving consensus on other issues and
challenges faced by the nation. It is necessary to take the initiatives now
on other national issues before the new bipartisan spirit is ruined by
events and developments generating conflicts and contention.
The issues which need immediate attention and consensus are those relating
to: (a) National security and foreign policy; (b) nuclear technology; (c)
solution of the Kashmir issue; (d) restoration of peace in Afghanistan; (e)
economic reforms, including settlement of terms and conditions with donor
countries and institutions; (f) administrative reforms to curb corruption
and promote efficiency; (g) Electoral reforms, including introduction of
proportional system of representation; (h) census; and (i) accountability
in a transparent and effective manner and eradication of ethnic and
sectarian prejudices, conflicts, etc.
The Pakistan People's Party by lending wholehearted cooperation and support
(which was not even sought by the other side) to the PML has once again
demonstrated that irrespective of personal gains or losses, the PPP does
not hesitate to co-operate with its opponents on national issues. It can,
therefore, be reasonably inferred that the government would enjoy the co-
operation and support of the PPP on other national issues listed above.
Some critics are of the view that the repeal of Article 58(2)(b) will
create an imbalance in power and there will be no effective check on the
abuse of authority by the prime minister. This is not a well-founded
criticism simply because if Article 58(2)(b) is retained then, there is no
check on the abuse of authority by the president. At least on two occasions
-- the dismissal of the Junejo government in 1988 and the dismissal of Nawaz
Sharif's government in 1993 97 the Supreme Court held that there was no
justification in law for dissolving the assemblies and dismissing the
governments by the then presidents in exercise of powers under Article
58(2)(b).
Since the president is not answerable to the parliament or the people,
there are virtually no checks on him in the event of abuse of authority by
him. In case of the prime minister, he can be held accountable not only by
the people when elections take place but also by the representatives of the
people in the two houses of parliament. In comparison to the president,
there are more checks built into the system for the prime minister.
However, one can justifiably argue that there is need to have more
effective checks on the abuse of authority by the prime minister or the
cabinet but such checks should be exercised more effectively by improving
the performance of the parliament and its standing committees instead of
empowering the president who is neither answerable to the parliament nor to
the people.
Abuse of power can also be effectively prevented by exercise of self-
restraint. The greater the power vested in any office, greater is the
restraint that has to be exercised to ensure effective full-term
governmental tenure. If this principle is followed by the persons in
authority, may it be prime minister or president, lesser violation, lesser
objection and lesser confusion will arise. One cannot emphasise more on
exercise of power with restraint, moderation and tolerance.
The thirteenth Constitution Amendment is no doubt a very positive and bold
step to strengthen the parliamentary form of government and to remove
undesirable provisions inserted into the basic law during the martial law.
The only disappointing aspect of the Thirteenth Amendment is that it seeks
to delete just those provisions of the Constitution which had curtailed
powers of the prime minister. It appears that perhaps the Bill has been
motivated with the personal desire to seek more powers and protection for
the prime minister rather than to correct and strengthen the system and
institutions of parliamentary democracy.
I am constrained to say so because the Eighth Amendment had made more than
40 changes in the Constitution. Besides the four provisions deleted by the
last Amendment, there are other provisions of the Eighth Amendment which
are equally undesirable and consensus exists for further amending or
repealing the same. Some of such non-controversial but undesirable
provisions of the Eighth Amendment which deserve immediate attention and
action by the Parliament are:
1. Article 41(7) relating to the appointment of Gen. Ziaul Haq as president
of Pakistan for a further period of five years from the date of the joint
sitting of the parliament after the general elections of 1985, without
following the procedure prescribed in the Constitution for the election of
the president. This Article has become redundant and deserves to be deleted
forthwith.
2. Article 51(4) relating to the reserved seats for women. Lack of
representation of women in the assemblies, who constitute about 50% of our
population has been resented by most political parties and all sections of
opinion. There is consensus on the restoration of reserved seats for women.
Now that the PML is committed to the restoration of reserved seats for
women and enjoys more than two-thirds parliamentary majority, there is no
reason or justification to defer or delay the matter of women's seats. In
fact, it should have been its priority to make the two houses of parliament
more representative.
3. Article 51(1) was amended in an attempt to establish separate electorate
for minorities. The issue whether the separate electorate system introduced
during Zia's martial law period is valid and in accordance with the
Constitution is still pending before the Supreme Court. The joint
electorate system was envisaged by the Quaid-i-Azam and was followed until
the martial law of Gen. Zia-ul-Haq. The addition of words "Muslim seats"
made through the Eighth Amendment, should be deleted to ensure that the
joint electorate system is restored.
4. In Article 51(2)(b) the age-limit of votes was increased from 18 to 21
years through the Eighth Amendment. This Article needs to be amended
forthwith to restore the limit of 18 years for the voters.
5. Like Article 58(2)(b), there is another Article 210A which has also
remained the centre of controversy. Though during debate in the parliament,
in 1985 this Article was improved as compared to its original version, it
is still far too wide in its application and is undesirable. It has to be
replaced by a more appropriate and reasonable provision which may
facilitate the repeal or amendment of many of the orders and actions of
Gen. Ziaul Haq to ensure the supremacy of parliament and protection of
fundamental rights.
I have listed above only few of the provisions of the Eighth Amendment
which, in my view, are least controversial and deserve correction,
amendment or repeal at the earliest. It appears that perhaps to minimise
the controversy and expedite the passage of the Thirteenth Amendment, the
treasury benches avoided touching the provisions listed above. It is still
not too late to present before the budget session of the National Assembly
another comprehensive bill to amend the Constitution to make necessary
amendments and deletions as suggested above as well as to remove the other
undesirable provisions of the Eighth Amendment.
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970412
-------------------------------------------------------------------
Destiny of the subcontinent
-------------------------------------------------------------------
Mazdak
A BREAKFAST meeting does not often hold out the possibility of shaping the
destiny of a subcontinent, but when the Indian and Pakistani foreign
ministers broke bread together in New Delhi, their talks had a symbolic
importance far greater than the outcome.
It has never ceased to amaze me that two neighbouring nations with a
combined population of a billion people could adopt such a childish stance
towards sorting out their differences. While individuals -- and immature
individuals at that -- may be able to afford the luxury of living in a
perpetual sulk, states cannot. There has been so much talk of principles in
both capitals that one would think that the rest of the world is totally
unprincipled, while only India and Pakistan adhere to lofty moral ideals.
And yet the rest of the world is moving rapidly forward, while South Asia
slips further and further behind: according to a recent UN report, we
figure behind even sub-Saharan Africa in the poverty sweepstakes. And
Pakistan is among the most illiterate nations on earth; not surprisingly,
it also has one of the highest population growth rates in the world. But
despite our ignorance, an unsophisticated, unlettered villager from the
remotest part of the country could put his finger on the problem: we have
to reduce our defence spending if we are to break free of the vicious cycle
of poverty, low productivity and backwardness.
Despite the obvious inference to be drawn from the bloated and no-longer-
tenable defence budgets in both nations, there are powerful vested
interests that have consistently opposed and blocked rapprochement. The
fact that we have been unable to even initiate a dialogue for years speaks
volumes for the frozen attitudes and rigid mindset governing decision-
making in Islamabad and New Delhi.
The conventional wisdom so far has been that being the bigger power, India
should make the first conciliatory move. However, this equation has been
overturned with the emergence of new political realities: while Pakistan
now enjoys a strong, stable government for the first time in years, India
seems destined to suffer under weak and shaky coalitions for the
foreseeable future. Thus, it will be for Nawaz Sharif to set the tempo, and
it is within his reach to make the concessions necessary to achieve lasting
peace.
This does not imply that we give up any of our key demands; it does,
however, make it possible for the Pakistan government to defer negotiations
on the thorny issue of Kashmir to some future date, while addressing other,
less contentious problems at the initial stage. Indeed, this is what Kofi
Annan, the UN secretary-general has suggested recently. Granted that this
seems a step backward from our maximalist, Kashmir-or-nothing stand, but in
the real world, one often has to make some concessions initially to get
part of what one wants.
While the explosive Kashmir problem is put on the back-burner -- hopefully
with the heat turned low -- we can get on with life and discuss a host of
outstanding issues without compromising our security or our basic
interests. The idea is for both countries to benefit from normalized
relations and then come back to Kashmir when the temperature has dropped to
normal. For instance, consumers, businessmen and the exchequers of both
countries stand to gain through an increase in trade.
The fear in Islamabad is that we will be overwhelmed by Indian products;
according to friends in the manufacturing sector, this apprehension is
unjustified as they are confident that our products have a qualitative edge
that would offset the price advantage enjoyed by their Indian counterparts.
Also, we can establish a system of quotas to ensure a reasonable balance.
In any case, if our consumers do get a break, why should we object when we
are willing to import finished goods from Europe and the far East at higher
prices?
We should also remember that within a year or so, we will be surplus in
electricity, while India is suffering from serious shortages. Also, with
gas pipelines planned from Central Asia and Iran, Pakistan is ideally
placed to charge substantial royalty payments from India. All these will
offset any surplus India accumulates on trade. The attraction of such a
huge market will also lure in foreign investment for projects based in
Pakistan but exporting to India. Our own entrepreneurs will also enjoy
economies of scale hitherto not available to them.
One low-cost, low-risk area to explore is an increase in cultural
exchanges. In 1989, the governments of Benazir Bhutto and Rajiv Gandhi had
concluded a cultural agreement which included cooperation across a wide
spectrum of activities. As far as I know, this pact is still theoretically
in force, and can be reactivated. Here again is a domain where we do not
need to fear an Indian invasion: our ghazal singers command vast followings
in India, as does Nusrat Fateh Ali. Performers and audiences will both
benefit, and our artists in both countries will gain from exposure to each
others' work. Our cinema might not survive the celluloid onslaught from
across the border, but I don't think it deserves to. Sports is another
area that has suffered from the freeze in relations: regular exchanges will
raise the standards, and would enhance the income of our poorly paid
sportsmen. It is a disgrace that our cricket teams have to travel to third
countries like Canada to compete against each other, thus denying us the
pleasure of seeing them in action.
It will be argued that these contacts will somehow weaken the resolve of
the Kashmiri freedom fighters and devalue their struggle. But if the stakes
are lowered, Indian repression would be proportionately reduced. In any
case, it is abundantly clear after two wars and eight years of bloodshed
that freedom cannot be won for Kashmiris by force of arms alone. Also, the
divergence between the Pakistani and the majority Muslim Kashmiri positions
has become more marked with the passage of time: Islamabad has continued to
insist on the 50-year old formula of a plebiscite to decide whether the
state will go to India or Pakistan, while a section of the younger
generation of Kashmiris is fighting for freedom from both their neighbours.
Given the passions this bone of contention continues to arouse, it makes
eminent sense to put it aside for the time being. In the long run,
Kashmiris will benefit from economic growth in India and Pakistan. During the
onerous restrictions that are in force today. The consulates in Karachi and
Bombay -- closed in a fit of pique -- can be re-opened.
None of these measures will cost very much to implement, but their tangible
and intangible benefits to a billion people will be incalculable. Nawaz
Sharif has shown great political maturity and courage in initiating a fresh
dialogue, and the ball is in the Indian court. Hopefully, the leadership
that emerges out of the current crisis in New Delhi will match the
Pakistani initiative, so the rest of us can get on with life without
forever being held hostage by the past.
===================================================================
970406
-------------------------------------------------------------------
Nottinghamshire sign Pakistan pacer Zahid
-------------------------------------------------------------------
Samiul Hasan
KARACHI, April 5: Pakistan's representation in the English County circuit
increased to five when immensely talented Mohammad Zahid signed a one-year
contract with Nottinghamshire.
Nottinghamshire has now pinned their hopes on Mohammad Zahid as their last
season's overseas player, Chris Cairns, has expressed his inability to come
down because of a likely surgery of the knee.
"I have signed a one-year contract with Nottinghamshire at a lucrative
amount," the 21-year-old Zahid said from Sharjah where he is with the
Pakistan cricket team, adding: "I signed the contract some 15 days ago."
"I have been given an understanding that if the county finishes among top
10, I will be awarded another six-year contract. However, if the county
finished low with my performance being good I will be booked for three
years," Zahid added.
The Chief Executive of the Pakistan Cricket Board (PCB), Majid Khan,
confirmed late Saturday evening that the Notts had approached him for
Zahid. "But I have told them clearly that it was a matter between the
player and the county and it had nothing to do with the Pakistan Cricket
Board (PCB).
Sources, requesting anonymity, said Zahid has signed a pound sterling
60,000 contract besides other financial benefits chiefly through
sponsorships.
Zahid, who sounded excited, said he had consulted his seniors before
accepting the proposal. "I talked to Wasim Akram, Waqar Younis and Mushtaq
Mohammad. The three were unanimous in their opinion that I should grasp the
opportunity with both hands because County cricket was still one of the
best institutions to hone the skills of a bowler."
Mohammad Zahid burst into international scene in the home series against
New Zealand when he grabbed a match haul of 11 wickets on his debut -- the
best-ever performance by a Pakistani on his maiden appearance.
But Zahid earned real fame when he caused problems for world's best
batsman, Brian Lara, in the World Series Cup which Pakistan won for the
first time in 17 years.
Zahid, born on Aug 2, 1976 in Gaggu Mandi, a village 12-km outside
Burewala, is said to be a yard quicker than Waqar Younis and Allan Donald.
"He is very very fast. He is not only quicker off the wicket but also in
the air. His yorkers are well directed," Wasim Akram, upon his return from
Australia, had said about Zahid.
After Zahid has accepted the offer, he becomes the fifth Pakistan bowler to
play in the English County Championship. Others are Wasim Akram
(Lancashire), Waqar Younis (Glamorgan), Mushtaq Ahmad (Somerset) and
Mohammad Akram (Northamptonshire).
The interesting point to be noted here is that in the past, it were the
Pakistan batsmen that dominated the English circuit while now it is the
supremacy of the bowlers.
The Pakistan Cricket Board (PCB) not only needs to keep a closer eye that
none of its bowlers are over-bowled, positive steps are required to be
taken so that some more stroke-makers come in the limelight and attract the
English counties after excelling while playing for Pakistan.
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970407
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Betting & bribery charges damaging
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Qamar Ahmed
Pawnbrokers, punters and the betting shops are a part of the economy of a
great number of the countries. The sight of people waging money on one of
their favourite horses or on a greyhound to get past the post first is not
uncommon even in cricket playing countries like Britain, Australia, New
Zealand, South Africa, West Indies or India.
What is unusual in countries where betting is legal is the element of
bribery. Not to say that it does not happen. In fact it does, but in very
rare cases, and the officials and the people connected with sports are
known to have been apprehended because of it and held in contempt.
The bribery controversy that rages now in Pakistan because of allegations
made by a couple of cricketers against their colleagues is indeed alarming.
It has unquestionably tarnished Pakistan's cricket image.
If only Justice Fakhruddin Ebrahim had in his verdict on Salim Malik taken
full account of the whole allegations, things would not have come to this,
the ugly accusations and allegations being hurled from every corner.
Pakistan in its Golden Jubilee Year cannot afford to malign its sportsmen
for what they have achieved over the years for their country, without any
concrete evidence. People incharge of the inquiry must sit down along with
the accusers and the accused to sort out the controversy.
Or else there will be a lot more to lose than to gain. Pakistan has a very
tough schedule ahead. After Sharjah, a Test tour to Sri Lanka, Independence
Cup in India, Pakistan 'A' tour to England, Asia Cup in Sri Lanka, Sahara
Cup in Canada, India in Pakistan in September, South Africa and West Indies
in Pakistan during the year and then Pakistan touring South Africa and West
Indies in the early part of the next year is a programme which will need a
lot of thinking and planning.
What Pakistan should do now is to concentrate more on how to keep the
players in good trim for such a rigorous schedule than to grind them and
grill them under the pressure of allegations which may adversely affect
everyone if no proper evidence is provided.
For Pakistan it is non-stop cricket for next twelve months if one takes
into account the engagements of the Pakistani professionals in the English
counties and there after Pakistan 'A' team's tour to England coming June is
also very vital. The second string must always be ready and in fine fiddle
to take over from people who succumb to injury or fall foul of the
administration.
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970407
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Sports conference; will it benefit the country?
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Lateef Jafri
MR Mushahid Husain was a noted home and international affairs analyst
before he decided to take to the unchartered field of politics and now he
sits on the treasury benches of the upper house of Parliament.
Sports was outside his chosen environ but the new government thought that a
neutral person would objectively study and assess the malaise that afflicts
the many disciplines in which the country had a pre-eminent status some
years ago. Having considerable liaison with the national Press his main
portfolio is supposed to be media development but with other departments
sports too came to his lot to put it back on the right course.
The Adviser, having the status of a Federal Minister, decided to meet
sports personages to evaluate the progress and decadence in various areas
of recreational activities. However, his initial step of meeting the
officials who, to a considerable extent, are responsible for harming many
sporting segments, was not taken as a good beginning by several right-
thinking people, particularly the veterans of the games. Why should he take
notes from an administrator in Islamabad, who is blamed for playing a role
in spoiling sports and enjoying joy rides as radio and TV commentator. Such
persons will naturally present a blinkered picture to the top
representative of the government.
Similarly in Lahore a visit to the headquarters of cricket and a
conversation with the Chief Executive of the board may not have proved
helpful, howsoever the former Test star may have been cogent in the
reminiscences of his playing days. Is Majid Khan carrying out his
assignment in a fair manner, ask the fans of the game? Is he taking the
game forward or backward? Is the great nursery of cricket, having one of
the largest and finest grounds and stadia in Asia, being ignored or not?
All the domestic cricket finals are being switched to other centres,
instead of the National Stadium of Karachi. Has not injustice been done to
numberless cricketers of the southern zone and they have been dislodged
from their slots in the national squad? When the National Stadium's right
to stage international matches will be restored? Why small issues are being
magnified to drive famed cricketers out of the national mainstream? Why is
the issue of bribery and match-fixing not being seriously taken note of and
show cause notices being given to cricketers? Certainly the cricket supremo
will not candidly admit his failings and faults and will try to shield
himself when a cricket-knowing Prime Minister is at the helm of affairs of
the country.
Mr Mushahid Husain wants to shape a policy for the development of sports
and for getting rid of a feeling of pessimism in sporting circles. The
monopolists from the associations and federations have to make way for
honest and energetic workers. The deserving players have to get their
rightful place in the national sets, be it cricket, hockey, football,
athletics, swimming, badminton, tennis and table tennis. The finances have
to be audited and vetted. Sports activities have to be initiated in the
neglected areas of the country. For bunching together proper ideas and then
thrashing out a sports policy a conference representing famed
personalities, management officials, commentators and scribes was a
priority. This should have been held purely under the aegis of the Federal
Government for it is the latter which has to take a decision and formulate
a sports policy for the first time in the history of the country.
Regrettably, the forum was hijacked by a self-styled organisation of the
sports journalists with their own angles and opinions concerning sports.
What is more, the association, with limited membership, was allowed to form
the list of invitees, some of whom had questionable credentials.
Mr Mushahid Husain as also the conference had to pursue a heavy agenda. Mr
Mushahid Husain would have got the right suggestion if he would have
invited genuine sports writers through the newspapers. Certainly a policy
to put sports back on the rails, to curb foreign joy-rides, to remove
exploiters from sporting organisations and to reform administrative
apparatuses and improve and enhance recreational activities throughout the
country cannot be shaped with the ideas coming forth from the gathering
present at the sumptuous venue in Islamabad. The persons will more conceal
things which will not help the Government in its genuine and honest
initiative.
One finds from the reports emanating from the federal capital that more
conferences, especially in the provincial centres, have been planned by the
new government to get a full view of the sports situation in the country
before the structure and parameters of a policy are worked out and enforced
in the form of an Act of Parliament. One expects the ministry handling
sports to invite true and legitimate representatives of newspapers and
honest veterans of various games to future meetings so that the Adviser is
not dodged and misled by a mafia trying to damage sports for a considerably
long time.
It seems that the Adviser, having taken up the task of streamlining the
sporting setups in a spirit of challenge, has already moved up some steps
to clamp a ban on foreign travels. A list is reportedly being prepared of
persons undertaking trips for no good to sporting disciplines.
One of decisions taken at the Islamabad caucus was to set up a national
task force to implement the measures at which consensus is reached at
future moots. Will the panel be composed of honest persons to carry out an
assignment given to it or will it put into cold storage matters for
immediate action?
One finds that in line with the idea of convoking conferences a permanent
advisory committee has to be established to monitor sports activities and
to evaluate the progress or the process of decline in any sector or
discipline. Who will be the members of the committee? Will they be right-
thinking and honest persons wanting to improve and reform the games or will
they be the exploiters to harm the cause of the country?
Perhaps the committee will be asked to recast the associations and
federations so that lethargic and dishonest persons are removed from them
and all games may look up and march forward. Perhaps the Adviser feels that
democratic structures may help the cause of sports in the days of
democratic institutions in the country. No clear-cut picture has yet
emerged of democratic organisations. Will democracy start from the grass-
root level and lead up to the higher echelons of the administrative organs?
Will the process of appointing the top officials by the government come to
an end, especially because most of the disciplines are Olympic ones, where
government interference is strictly banned?.
Cricket will be a problem since it has its own constitution and three top
officials are appointees of the President of the State. Will the cricket
board constitution go through the necessary changes and election methods
will be used for choosing its administrative setup as is the procedure in
other cricket-playing countries.
The idea of extending the facilities of the games to rural or neglected
areas appears good on paper though one cannot but have his reservations
because the whole scheme may become a victim of mismanagement and the
capital invested may go down the drain. If the plan is properly run many-
sided benefits may accrue to the nation. Similarly encouraging and
enhancing sports activities in schools will lead to considerable gains to
the country and many talented boys and girls may be prepared for national
and international competitions right from an early age.
The sports fans have pinned their hopes on the Adviser who may have his own
long-term strategy to see that wretched days in sports are ended, not in a
brusque way but in an ordered fashion.
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970408
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Jansher bags British Open title for 6th time in a row
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Dicky Rutnagur
CARDIFF, April 7: Jansher Khan extended his run of wins in the British Open
Squash Championships to six and Pakistan's monopoly of the title to 16
years by beating Peter Nicol, of Scotland, 17-15, 9-15, 15-12, 8-15, 15-8,
in a dour, 126-minute final last night.
Jansher attaches immense importance to winning the first game and the
cushion of a 2-1 lead in games. These objectives he achieved, despite
having started the match very nervously.
The first game occupied 25 minutes. hitting three winners in a row, Jansher
established a seemingly unassailable lead - 13-9. But the gap had been
narrowed down to two when he first served for the game. He hit the tin on
his first game point. On his second he gambled on a winner with his return
of service. That shot too went down.
The first of the three points of setting went to Nicol on a penalty. The
next rally ended with a penalty point to Jansher, who took the remaining
two points with a volleyed kill and a volley-drop.
Nicol, surer on his shot game than Jansher, took the second game
comfortably. The third stood in the balance until 8-all. But then Jansher
worked Nicol very hard and winning five points in a row, forged a lead that
stood him in good stead.
Jansher looked tired in the fourth game and five of the last six points
Nicol won to capture the game were gained from Jansher's errors. However,
Nicol returned the compliment - at least in part - the start of the decider
to send him 4-1 up. But then three penalty points in a span of four rallies
put Nicol 6-4 ahead.
Tension mounted as the game developed and pushing and barging increased.
The last time Nicol led was at 7-6. Jansher now began to assert himself and
moved ahead, but the gap was still a mere two points until a return by
Nicol flew out of the court to put Jansher 11-8 in front.
Two winners gave the Pakistani a clear lead and Nicol's failure to
keep a backhand drop above the tin put him on match point. A drive
to Nicol's backhand corner was magnificently dug out, but the court
lay wide open and Jansher delivered the coup de grace with another
imperious backhander.
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