------------------------------------------------------------------- Week Ending : 12 July 1997 Issue : 03/28 -------------------------------------------------------------------

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Extradition process of PAF official under way PM asks ministers not to engage in trade Gulf states asked if they have reservations about poll activities Pakistanis in ME looking for new destinations Asif Zardari, 21 others indicted KESC chief, gunman & driver killed in ambush Faiza Heights was built in violation of rules ---------------------------------


SBP's reward for chronic defaulters New deadline for defaulters Growth without social harmony futile Do we understand all of IMF-WB purposes? Software Technology Park in the offing BoI seeks simplification of procedure Govt. plans to disinvest banks, DFIs by March Inflation for 12 months estimated at 11.80pc SBP limits govt's bank borrowing to Rs55bn KSE 100-share index crosses 1,700 points barrier ---------------------------------------


The 'legend' Ardeshir Cowasjee Danger zone By Mazdak Hong Kong sunset Omar Kureishi Confronting corruption Shahid Kardar -----------


Pakistan has good chance to win Asia Cup: Haroon Sohail recalled to Asia Cup cricket squad


970711 ------------------------------------------------------------------- Extradition process of PAF official under way ------------------------------------------------------------------- Shaheen Sehbai WASHINGTON, July 10: The United States and Pakistan have reached an agreement that under no circumstances would Washington take any action in Pakistan, using Pakistani citizens, without involving the Pakistani authorities, a top US official revealed to Dawn on Wednesday. Legal process to extradite Squadron Leader Farooq Ahmed Khan, arrested on charges of heroin smuggling in New York, to Pakistan has also begun and the US side was assisting Pakistan in completing the procedures, Director of DEA's International Drug Operations, Michael Horn, told Dawn in an exclusive interview. Following are the questions and answers given by Mike Horn: Q: How were your meetings with officials in Pakistan and is it true that the US apologised to Pakistan? Horn: I have read the stories that have appeared and much of it is true. We had very good meetings with Pakistani officials. I went there and we had representatives of the Department of Justice, from our Embassy and we met with people with your anti- narcotics force, representatives of foreign affairs and some representatives from the military as well. The meetings were very constructive. I expressed our regrets for the events that caused the meeting to take place in the first instance. We have to remember that the real bad guys here, and I think we agree both Americans and the Pakistanis, are the ones that deal in drugs. Q: Has then the US position on Ayaz Baloch changed after the Islamabad talks? H: No I don't think so. I can understand how Mr. Baloch was in violation of the law. But it was unwilling, there was no malice on his part. He was trying to do a service that he thought was in the best interest of GOP and GOUS. It is unfortunate, and that is why I expressed my regrets, that it was done in such a way that your authorities were not aware of it from the very beginning. That should not have happened and I told General Mushtaq that. We certainly came to an agreement that under no circumstances would we take actions in your country, using your citizens, without involving your authorities. Q: What happens to Mr. Baloch now? H: I am hopeful that the Government of Pakistan would take everything into consideration. First of all neither Mr. Baloch nor our agents in Pakistan knew of this investigation when it was first initiated. Investigation was initiated by agents in the US because the original violation took place in the US and it was only later that both our people in Pakistan and Mr. Baloch found out about it. So I certainly hope that will be taken into consideration. Q: Have Pakistan asked for the extradition of Sq. Ldr Farooq Khan and are you considering that? H: That is not a decision that is taken by us but as I mentioned, when we travelled to Islamabad we brought with us a Department of Justice Attorney and a DEA attorney and the reason we brought them with us was to provide as much expert advice as possible to your government so that they would know exactly what procedures were necessary to expedite their request for extradition. As a matter of fact we had two days of meetings and the DOJ attorney stayed behind for a couple of days and worked hand in hand with your authorities and gave them all the information to pursue this. Q: Is it then fair to say that the extradition process is underway? H: I don't know whether your government has sent the paperwork to New York or not but the steps we took in Islamabad were the initial steps to get the extradition underway. Q: How do you react to reports that the extradition of Farooq Khan would be a quid pro quo to Kansi's extradition? H: I don't know about that. I would doubt it very much. I think your government and our government both want to address all these issues on their own merits without getting involved in trades like that. I don't think it is a professional way to do business. Based on the calibre of people I met on your side, I am sure that they would agree to that. Q: What restructuring are you planning in DEA in Pakistan? H: I don't know whether restructuring is the right word. What we did with your authorities is that we sat down and drafted the framework for a MoU to spell out exactly how we want to work together and spell out steps to preclude unfortunate incidents such as this. It will be signed fairly soon because when we left Pakistan it was about 95 per cent finished. Couple of minor items that your MOFA and our DOS had to look at. We have agreements in principle and with or without the MoU the DEA would be adhering to all the guidelines we discussed making it sure that your people are not left out in the future. DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS 970712 ------------------------------------------------------------------- PM asks ministers not to engage in trade ------------------------------------------------------------------- Bureau report ISLAMABAD, July 11: Prime Minister Nawaz Sharif on Friday asked his cabinet colleagues to dissociate themselves from their business concerns till they were ministers. "It was the first session of the expanded cabinet and had been pre-planned. The Prime Minister wanted to make it clear to his cabinet colleagues how he wanted to run the government with the new team," an official source told Dawn. Official sources confirmed that the Prime Minister asked ministers to dissociate themselves from their business concerns, and delegate their business responsibilities as long as they held cabinet positions. DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS 970710 ------------------------------------------------------------------- Gulf states asked if they have reservations about poll activities ------------------------------------------------------------------- Our Correspondent ISLAMABAD, July 9: Pakistan has asked Saudi Arabia, United Arab Emirates and other Arab countries if they would have any objection to the election activity on their soils by Pakistanis working in those countries, as Islamabad plans to give its overseas citizens the right to franchise. Chief Election Commissioner Justice Fakr-i-Alam on Wednesday told Dawn Pakistan's foreign office was working on the subject and had written to the Arab countries whether they would allow Pakistanis working there to indulge in election activities. Prime Minister Nawaz Sharif soon after taking over as prime minister had asked the Election Commission to take necessary steps to give the overseas Pakistanis the right to vote. He said that at the last couple of meetings of the Election Commission the issue was discussed threadbare and the law ministry and foreign office were asked to respond to the questions addressed to them. The questions were: a) The country-wise number of Pakistanis of 21 years of age and above living in various countries so that the Election Commission is able to devise a scheme for their enrolment as voters; b) whether the embassies in each country will be able to carry out the job of enrolment of voters by using the services of their embassy staff if the work of enrolment is assigned to each such embassy; c) The approximate time, which is likely to be required by the embassies for completion of the assignment as mentioned at (b) above; d) to indicate as to whether any of the South Asian countries has extended this facility to its citizens living abroad, and apprise what procedure has been adopted by them for enrolment of voters and casting of their votes. e) give its opinion about the legal aspects of registration as voters of Pakistanis living abroad having dual nationality; f) a precise report about the legal and political system in each such country where Pakistanis are living, and as to whether the host country will allow the election campaign and the casting of vote on its land. Justice Fakhr-i-Alam said if a Pakistani residing in foreign country had the right of vote, he could also contest elections. He said that without computerizing the voter lists the possibility of irregularities in elections could not be eliminated. The CEC proposed live telecast of a general election for restoring the credibility of the election process. He proposed that a commission/committee comprising prime minister, leaders of the main political parties, election commissioner and the members of the election commission should sit in a control room, and when there was any complaint of irregularity they should immediately switch to that constituency and ask the returning officer about the problem. If they agree that there is any problem, voting should be immediately stopped. He hoped that the election process would gain credibility in this way. DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS 970708 ------------------------------------------------------------------- Pakistanis in ME looking for new destinations ------------------------------------------------------------------- Syed Rashid Husain RIYADH, July 7: In the wake of new realities Pakistan's number one exports to Saudi Arabia, its manpower, is facing new challenges and stiffer competition in the Kingdom. A number of factors appear to be affecting the inflow of Pakistanis in the region as a whole. Of course the environment is no more the same as was in the 70s and 80s. There is a lot more emphasis on the nationals to secure jobs in the Kingdom. Earlier, it was the public sector where the emphasis was on hiring the locals. The private sector was indeed reluctant to accommodate the locals in large numbers in its workforce and for host of reasons preferred expatriate workers. Hence, in the first phase induction of Saudi nationals did not hurt Pakistanis a lot, as Pakistanis were mostly manning the private sector. Faced with a growing rate of unemployment among the Saudis and a large number of local graduates not able to find the jobs of their choice, in the public sector, many are now turning towards the private sector for employment. This combined with the thrust of the government on the private sector to accommodate more and more Saudis in their rank and files is making many expatriate workers including Pakistanis face an uncertain future. Despite this, government officials are still heard complaining that the private sector is still not ready to accommodate the Saudis in large numbers and if it does so it is only because of the government's interference. They are right in many ways. If one goes in to see the long queues every morning at the driving institutes in various parts of the Kingdom, where the tests to grant driving licences are conducted, one would still see a long queue of license aspirants and indeed a majority of them are expatriates having newly arrived in the Kingdom. There are indeed people still coming into Saudi Arabia in considerable numbers but the difference is they are not dominantly from Pakistan as they used to be in the yesteryears but in fact represent a host of nations. It is apparent that Pakistan has lost its competitive advantage to others. Only until some 7 or 8 years before, Pakistanis were by far one of the largest group of people entering Saudi Arabia on job visas. But things have changed. One could see a large number of people now coming from countries like Sri Lanka, who were not present in significant number until only sometime back and their arrival in significant numbers for instance is a comparatively new phenomenon. Then there are also reports that some organizations are contemplating to import manpower from some of the Central Asian States of the erstwhile Soviet Union. Of course the number of Indians specially from South India, has increased tremendously over the last few years. Pakistanis seem to have lost many trades, such as grocery stores and supermarkets, to the competition and more obeying South Indians- mainly from Kerala. Filipinos are also one of those nationalities who are present now in very large numbers, specially in white collar jobs such as secretarial functions which were once the domain of Pakistanis. It seems the government in the Kingdom also supports the idea of bringing in people of different nationalities so as to balance out the population mix in the Kingdom. One key area from where Pakistanis have almost been eliminated is the labour class. Despite having an image of hardworking under trying weather conditions in the Kingdom, Pakistanis seem to have lost all their goodwill and the number of laborers has indeed gone down very significantly over the last some years. Pakistanis however, still seem to be holding on to the edge in the professionals class and white collar jobs in trade and industry. Most of these people have been in their places for years now. One could though still notice new Pakistanis faces in professionals class trickling into Saudi Arabia but the number of those coming in has indeed slowed down a lot, both because of the new economic realities and also because we have lost some ground to others. Most of the observers, who have been in this region for quite sometime are of the view that the number of Pakistanis in these senior and professional positions would also go down slowly and gradually over the next coming years. Not that every one of them would be shown the exit door by their employers, but many may opt themselves for the ultimate exit from the Kingdom. Many of these senior Pakistanis have already spent significant numbers of years in the Kingdom and with their children grown up and their educational needs varying many are compelled to call it a day finally. Then with the possibility of migration to greener pastures elsewhere, such as Canada, Australia and New Zealand, because of a level of uncertainty in the Kingdom about the future prospects of the expatriate workers and the overall socio-economic conditions backhome many are compelled to take this decision themselves. As a result the hard- earned savings and the expertise of these senior Pakistanis is slowly being diverted to newer and newer destinations. In the next few years, as a result of all these changes, the number of Pakistanis in Saudi Arabia and the other Gulf states is bound to go down considerably, many argue. DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS 970706 ------------------------------------------------------------------- Asif Zardari, 21 others indicted ------------------------------------------------------------------- KARACHI, July 5: The District and Sessions Judge, South, on Saturday framed charges against Asif Ali Zardari and 21 others for conspiring and killing Mir Murtaza Bhutto and seven of his partymen on Sept 20 last outside 70 Clifton. Reading out from the chargesheet in the presence of 19 suspects, Judge Shahnawaz Awan said Wajid Durrani, Shoaib Suddle, Masood Sharif, Asif Ali Zardari, ASPs Shahid Hayat and Rai Mohammad Tahir, SHOs Agha Jamil and Shabbir Qaimkhani, and ASI Abdul Basit, in connivance with Shukaib Qureshi, Syed Abdullah Shah, had hatched a conspiracy to kill Murtaza Bhutto and his partymen, which was punishable under Section 120-A and B of PPC. The chargesheet further read that the accused No 1 to 9 had ordered the accused No 11 to 19 who fired straight shots and killed Mir Murtaza, Ashiq Ali Jatoi, Sajjad Haider, Wajahat Jokhio, Mohammad Baloch, Mohammad Rahim, Abdul Sattar and Mohammad Bachal. This was punishable under Section 302 and 324 Qisas and Diyat Ordinance. Another charge was that the accused had deliberately destroyed the evidence. Names of Wajid Ali Durrani, a former SSP (South); Dr Shoaib Suddle, a former DIG of Karachi; Masood Sharif Khattak, a former IB chief; Asif Ali Zardari; ASPs Shahid Hayat and Rai Mohammad Tahir; SHOs Agha Mohammad Jamil and Shabbir Qaimkhani, ASI Abdul Basit and eleven others were read out. All of them were present in the court. Three of the suspects-former Sindh chief minister Abdullah Shah, former SP investigation South Shukaib Qureshi and former SHO Khokhrapar Zeeshan Kazmi-are still absconding. The judge asked the suspects whether they accepted or denied the charges. All 19 suspects present in the court declined to accept the charges. Azizullah Sheikh, counsel for Asif Ali Zardari, drawing the attention of the court towards the contents of the chargesheet, said it was a concocted case. He said the prosecution had not mentioned the place, date and time of the conspiracy and thus failed to prove that it was a conspiracy. The counsel also submitted that the witness to conspiracy be brought in the court on the next hearing. Asif Zardari was escorted from Malir Jail to the Karachi Central Prison amidst extraordinary security arrangements to attend the proceedings of the trial-in-jail. The jail authorities had also brought Dr Shoaib Suddle, former DIG of Karachi, to attend the framing of charges by the sessions court. A PPP MNA, Manzoor Ahmed Wassan, attended the court proceedings. The court asked that the complainant, Noor Mohammad, should be present in the court on July 19. DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS 970706 ------------------------------------------------------------------- KESC chief, gunman & driver killed in ambush ------------------------------------------------------------------- KARACHI, July 5: Managing Director of the Karachi Electric Supply Corporation, Malik Shahid Hamid, his gunman and driver, were shot dead by unidentified assailants in Defence area on Saturday. According to the SHO Defence, Mohammad Mobeen, occupants of a white Corolla and a green Mehran Suzuki car opened fire on both sides of Malik Shahid's vehicle, killing his driver and gunman on the spot and injuring the KESC MD, who died on way to hospital. The assailants fired scores of bullets which also hit the outer walls of house B-71 and A-71 abutting South Street No.13, off Seaview Avenue. Police have collected 155 empties from the spot. The frontal portion of the second storey of a bungalow was riddled with bullets. The gate and windowpane of the bungalow were also damaged. Police said the KESC chief left his residence B-75, South Seaview Avenue, at 8.30am in his official car (Z-2638), along with his gunman Akbar and driver Mohammad Ashraf. When his car turned onto South Street No. 13, he was waylaid and fired upon by the killers from opposite sides, the police added. Malik Shahid was immediately taken to the JPMC, but he died on way to hospital. After hearing about the incident, Malik Shahid's wife rushed to the JPMC where she reportedly disclosed the names of people she suspected to be her husband's killers. Sindh Chief Minister Liaquat Jatoi and high ranking civil and military officials attended the Namaz-i-Janaza of the KESC chief who was also the home secretary of Sindh. He was laid to rest in DHA graveyards on Saturday afternoon. His Soyem will be held on Monday (July 7) after Asr prayers at his residence B-75, Street. No 13, Phase-II, Defence Housing Society. Sindh chief minister on Saturday constituted a special team, comprising AIG Crimes Ali Gohar Mithiani, SP Special Branch Dost Ali Baloch and DSP Saddar Azeem Ghoto to investigate into the cold-blooded murder of Malik Shahid, his driver and gunman. The chief minister has also taken a serious view of this heinous crime and has ordered beefing up of security measures in the city. Mr Hamid started his career in 1974 as assistant commissioner. He also served as the home secretary of Sindh from March 1995 to Feb 1996. Various organisations have expressed their grief over the killing of Malik Shahid Hamid and demanded of the government to arrest the culprits involved in the tragic incident. In a statement faxed from London to Dawn offices here, MQM chief Altaf Hussain condemned the murder of Malik Shahid, his driver and gunman. He said the tragic incident was aimed at destabilising Sindh coalition government. The KW&SB Engineers and Officers Association also condemned the killing of KESC chief. DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS 970706 ------------------------------------------------------------------- Faiza Heights was built in violation of rules ------------------------------------------------------------------- Saghir Ahmed KARACHI, July 5: The ill-fated four-storied block of Faiza Heights (which collapsed on July 2 resulting in the death of 10 people) at North Karachi was constructed in the compulsory open space on getting permission for a separate four-storey block with a hollow plinth (car parking) with an increased plot ratio of 1:3 as against the allowable ratio of 1:2, informed sources said on Saturday. Inquiries from local people showed that the builder was initially using the compulsory open space as water reservoir for construction work at the complex. Subsequently, this place was used for dumping garbage where the ill-fated block was constructed, apparently, after the builder managed to have the plot ratio increased and had the additional block ready. Presently, the construction work was almost over. The building was being given final touches when the tragedy happened and the labourers at work got buried under the rubble. The builder, M/s Nasir Associates, had sent intimation letters to the allottees, asking them to take possession of their flats in a month's time. As to the role of the KBCA in the control on buildings and mushrooming of illegal construction activities etc., experts said that the KBCA came into being after the disaster of Bismillah building in Lyari which claimed 137 lives some time in 1976-77. The role assigned to structural department is to examine the structural details, design/drawings of each building in the city in order to control the provision of reinforcement (steel), construction quality, use of material, proper concrete cube tests, conforming to the standard strength in terms of PSI - pressure per inch square as laid down in American and British codes, these experts said. Besides, they said, it was also made mandatory that every structure of a multi-storey building shall have an earthquake resisting structure. The structural department, headed by qualified experts/engineers, was set up to ensure execution of structure/reinforcement (steel) as vetted and the use of material in terms of cement concrete defined in the drawings. Similarly, a vigilance department was also established in the KBCA with an exclusive role to examine construction activities at sites, strictly in accordance with the instructions of the structural department entrusted to vet the structure and material to be used as per drawings. In the KBCA, there exists a field zone as well, responsible to carry out inspection and supplement the efforts of the vigilance department in addition to other duties. Observers said that it was unclear if all the ingredients were checked by the KBCA departments regularly or periodically as the situation in the present case of building collapse indicated. No one is ready to go on record, apparently, considering the severity of the situation. It only goes to show the weakness of the KBCA, particularly the lethargic role of its structural and vigilance wings. They, however, expressed their concern over the functioning of the KBCA, presently led by unqualified, evening diploma holders, particularly those heading the structural and vigilance departments in gross violation of laid down service rules and practices in spite of the fact that there are highly qualified engineers in both fields, one of the structural engineer, having done his MS in structure from the US, has been posted in computer section. In fact, they added, that adhocism in the KBCA demanded restructuring of the entire KBCA to make it a strong building control authority with specialists and qualified engineers as was conceived by previous governments which should be free from any political or outside interference.


970707 ------------------------------------------------------------------- SBP's reward for chronic defaulters ------------------------------------------------------------------- Fauzia Fakhar THE incentive scheme announced by Governor of the State Bank in order to induce recovery of bad and doubtful debts is being debated in financial circles. The defaulters are analysing it to their benefits, bankers viewing their portfolio to be cleansed and restructured at the same time worrying about the huge write- offs involved and the ultimate person to be held responsible after the completion of the tenure of the present policy makers. The third category which stands confused with the whole construction of the so-called inventive scheme is the group of a few industrialists who had been honest in their commitments and had been regular in their repayments despite all odds of sliding economy. Let us analyse the whole scheme by looking at it from the eyes of these three major players' participants of the deteriorating financial sector. The defaulters This category can be bifurcated into two; wilful defaulter and simple defaulters. Wilful defaulters are those who don't want to pay what they owe and find ways and means to avoid recovery teams and pressures exerted on them for payment to their creditors. This could be done by either printing dual financial statements and every time praying for relief owing to weak cash flows. No doubt some pressure on bankers have to be exerted from influential quarters to accept their point and grant relief. Simple are those industrialists or borrowers who either lack managerial qualities to run their units or fell victim of the ever changing government policies. Most of the time the basic assumptions made keeping in view that the tariff structure on raw material or end-product change to such an extent by the time project goes into operation and some times even at the implementation stage that it becomes difficult for the sponsor to carry out the execution of the whole project, in the perspective it was conceived. Sometime the cost shoots up and neither the sponsor nor the creditors are willing to increase their exposure and then running around different financial quarters at times doesn't help. Some time the whole scheme becomes redundant in view of the changed tariff structure and the sponsor loses interest not only stucking his own funds but mostly of banks and DFIs as the prevalent debt equity ratio is 70:30, not to mention the reduced stake of sponsors owing to over-invoicing. The banks are being hit from both the sides. On the one hand this sector has not received timely payments making the bank's liquidity position weak because portion of the financial sector funds, around Rs 130 billions, are stuck in bad or doubtful debts.They were deprived of potential income to be earned by channelling these funds in business operation once recovered. On the other hand, they have to make provisions out of their earned income for this bad and doubtful debt. Any initiative to recover from wilful defaulters is either curbed by influential quarters or the cumbersome litigation process helps the defaulters. To decide the cases of genuine defaults on genuine grounds even where securities are inadequate or cash flow genuinely reflects inability of the firms to service enormous liabilities and where some relief/restructuring may help to revive the sick projects from ultimately turning into dead venture, the bankers are afraid. Afraid of taking bold decisions such as granting waivers/write-offs to some extent in order to revive the projects and recovering balance repayments in due course of time. They are afraid as some of their colleagues have done so in the name of revival to favour their friends or political affiliates. These groups of people are still afraid, rather confused, how to deal with the recently announced scheme apparently finalised in a great hurry, merely to recover whatever can be recovered, ignoring the vital facts and the side issues. No one at the SBP is willing to take the responsibility of clearing the doubts of the bankers, of the defaulters or of the small breed of our borrowers making regular payments. The SBP, exercising its powers conferred upon it under the Section 33-B of the newly amended banking act has just announced the scheme which as per Para 4(a) offers incentives as mentioned below. 1. Default of 7 years and above - principal plus 5 per cent 2. Default of 3 years or more but less than 7 years - principal plus 20 per cent of the principal amount 3. Default of 1 year or more but less than 3 years - principal plus 40 per cent of the principal amount or 75 per cent of accrued mark-up, whichever is less. The incentives have been given due publicity and both the defaulters and bankers are being asked to settle liabilities according to the provisions of the scheme. The confusion is created by incentives offered or bestowed upon the defaulters. It appears that in order to avail the facility of the scheme, on has to be a chronic defaulter and above all wilful too. The scheme offers more incentive to those who paid less and managed to save their mortgaged properties from charge holders, obviously with the help of the powerful. Banks don't print their own money; banking is the business of matching liabilities with assets. The money deposited by masses is loaned to creditors with some spread. This spread after deducting administrative and operational cost is to be disbursed among the deposit-holders as profit. The people who had managed to deprive depositors of their potential profit by not paying back and not adding to the income of banks can again hit the balance sheets of the respective banks if they managed to clear their name off defaulters' list by merely paying what they had taken 7 years back plus some meagre percentage. On query from various banks, it is gathered that people approaching to avail this scheme for final settlement and asking for release of their property title are those where banks are holding adequate securities or simply where realisable value of securities are more than liabilities. On the contrary, the defaulters falling in some slab but whose case, bankers would be more than happy to accept what can they lay hands on in lieu of their inadequate or deteriorated security, no one has shown willingness to avail the amnesty for retiring the liability. A word of caution would be, not to make this scheme a custom toward defaulters instead of penalising for non-payment and in the end allowing them to purchase the title deeds of the valuable assets held by the banks at reduced SBP price. There remains a possibility that they would again be approaching some other financial institution on the same assets for borrowing once released at reduced price to start with the whole game once again. The concerned bankers are worried, as to whether to accept payment at reduced rates, better be called at charity rates, as a defaulter of more than seven years has to pay five per cent over the principal. What a pity, to accept in the end what does not even service the cost of funds stuck over that period. Not to mention again that interested parties are those where banks hold adequate securities against defaulted amount and are either 'majboor' due to cumbersome legal process or because of strong strings that particular defaulter can play at bureaucracy or political quarters. Sometimes, when a case passes on by climbing up the ladder from bad to worse, the reluctance may be due to the huge write-offs to worse, involvement in the settlement of that particular case. Most of the executives just try to avoid taking a decision, thinking that it may be diffcult to explain to the FIA officials,or the following government and explain to them the necessity of a write-off.That may push them in deep waters afterwards and just want to mark time. And, we may not blame them in view of the recently passed order by the Supreme Court holding responsible all concerned for write-off. The order came at a time when bankers are asked to accept reduced payments as per the incentive scheme involving ultimate huge write-offs. The SBP while announcing the scheme, offering incentives of reduced liability payments to defaulters has not offered any compensation for the bankers. How would their already weak balance sheets be able to sustain the negative impact of this reduced liability acceptance. No measures has been taken to pressurise those defaulters whose liabilities exceeds realisable value of their assets. Offering their scheme before enforcing the foreclosure laws or Banking Tribunals is a 'gala' for many and 'hella' for others - 'others' who have to write back against provisions, which they had been creating from their earned income for this doubtful debt and could be directly debited to income in case effective foreclosure laws enforced. Most of the honest borrowers are busy asking themselves what their honesty had paid them. Instead of being rewarded, they had been totally ignored. They are busy answering their younger folk why they had been paying regularly to their creditors instead of sending their folks abroad on pleasure trips why they had been pang 15 per cent on an average mark-up on time when they could have got off with only principal plus some meagre percentage, not to mention, the time value of money. What message this may give to the few, who honour their commitments and pay on time what they owe. DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS 970706 ------------------------------------------------------------------- New deadline for defaulters ------------------------------------------------------------------- COMPLETE indifference to what the State Bank of Pakistan termed the last chance for defaulters to settle their loan liabilities through negotiation with the banks seems to have left no option for the apex committee created for this purpose but to extend the deadline by two months (up to September 5). Earlier, the deadline for reaching an agreement on a finally payable amount was fixed for July 5. The apex committee meeting, held on Friday to review the progress, found that the response was not encouraging at all and that those who approached the banks for that purpose argued mainly about what constituted principal. Although not much is known about the exact point of their quibbling, the defaulters might now be trying to adjust against principal whatever amount they may have paid towards the clearance of interest and thus get their liability further reduced. According to reports, the State Bank view is that for project finance the amount originally lent is to be taken as principal and for working capital it is the disbursed amount, and in the case of restructuring, it will be the restructured amount. The State Bank categorically says that the extension is only one-time and that the deadline for final payment remains December 5. However the defaulters' experience in the past has been quite different when such deadlines were extended and this may now encourage them to persist in their attitude of non-compliance. It was this fact which prompted the State Bank governor to say at a seminar on Thursday that by the time the new deadline expired on September 5, sufficient number of special banking courts would be in place to expedite recovery of the stuck-up loans. Under the new recovery law - if enforced with determination and without favouritism - the banking courts are empowered to pass an interim decree in respect of a claim or an amount which is undisputed i.e. principal, and order attachment of the assets of the defaulters. The law also provides that the written-off loans are liable to be recovered if a corrupt practice or any mala fide is involved. Dishonest defaulters who had had their collaterals over-valued or had them removed would prefer to let the cases linger or have them settled with the adjustment of whatever may have been left of the collaterals. Settlement of defaulted loans would have been easier if the assets, created after obtaining the loans, were also held encumbered with the liability of the loans. DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS 970707 ------------------------------------------------------------------- Growth without social harmony futile ------------------------------------------------------------------- Professor M. Rashid THE budget for 1997-98 has been passed by the National Assembly. Sartaj Aziz and his team in the Ministry of Finance have prepared it after a lot of hard work. It is an innovative budget which sets out targets for revenue collections, for exports and imports. These could be, hopefully, achieved during the fiscal year. The budget provides incentives to the industrial-business communities for increasing productivity of the economy in recession. A more accurate description of the malaise is stagflation since the economy is suffering from recession combined with inflation. The finance minister has also announced the establishment of a committee headed by Dr Hafiz Pasha, Deputy-Chairman, Planning Commission. It would monitor the implementation of the budget so that the various targets are continuously kept under scrutiny. The relevant targets include revenue collection, export performance, foreign exchange earnings and so forth. The government has provided incentives to business and industry in the form of lower taxes and tariffs for lifting the economy out of recession. Government plans to reduce expenditure on general administration as also to downsize the public sector corporations. These are many imponderables in its way. These include the response of business and industry to the reduction in taxes, the ability of the CBR to collect revenues honestly, the bureaucracy's cooperation for keeping down public expenditure and the maintenance of law and order. It is difficult to say if all the taxes would be paid and collected. No one can tell whether export targets will be achieved to enable the country to pay for imports. Wheat and sugar imports during the year will add around $1.5 billion to the import bill. It would, therefore, be necessary to ensure that receipts on trade account of the balance of payments are adequate to meet the payments. If these do not match, the government will have to fill the foreign exchange gap by borrowing yet again. Pakistan and India are now relying heavily on supply-side measures which are designed to increase the volume of production of goods and services. The supply-side doctrine postulates that lower taxes generate higher productivity. This doctrine was propounded by Dr. Laffer in 1970. President Reagan and Margaret Thatcher used the Laffer formula in the 1980s in the USA and the UK for boosting economic growth within their respective countries. Their supply-side policies succeeded in making the rich richer. The number of billionaires in the US increased while the lower-income classes did not share in the prosperity. Their relative incomes fell, heightening their perception of income disparities. The finance ministers of India and Pakistan have given tax concessions to business and industry to revive the economies. Whether their policies would translate into reality would depend largely on how the business communities respond to incentives provided by the government. They are known neither for genuine entrepreneurship nor for paying their share of taxes. The finance minister has not answered questions which the people are asking. Why haven't the fat agricultural incomes of the feudal aristocrats been taxed? How is it that the poor and low-income groups have not been provided proper relief in the budget? It is because of the primacy of politics over economics. What is he doing to deal with the menace of growing unemployment? He must know that it can lead to crime and social strife. Meanwhile, the affluent continue to indulge in conspicuous consumption. The low-income classes find it hard to make both ends meet. Income disparities between the Haves and Have-nots generate class conflict. It has become obvious that the budget for 1997-98 will add to social discord and impede the processes of economic development. Fifty million Pakistanis are living below the poverty line. Millions are waiting to enter the labour market. They will be angry when they find that there are no job opportunities for them in the public and private sectors of the economy. The swelling ranks of the unemployed are bound to create social strife. Economic growth policies must be blended with human resource development. Human beings are both a means and the end of all development effort. The neglect of human development is the root cause of the growing evils of poverty and unemployment. But the finance minister's focus is on economic growth and not on eradicating poverty. This can only be done if all the people develop their full potential, including women and children, who are the worst victims of involuntary unemployment. The vast majority in Pakistan are seething with discontent. They are sick and tired of promises made which have not been kept by the governments. They have waited in vain for the elusive dawn. Establishment economists seldom go beyond conventional economic analysis which is based on measurement of savings and investment, balance of payments, deficit, the demand for and supply of inputs for producing outputs and such other variables and equations. They use economic jargon in their prescriptions for economic growth but they feel uncomfortable with issues such as human and social development. What the people want are answers to their questions relating to the roots of their wretched poverty. Involuntary poverty in Pakistan is characterised by malnutrition, disease and illiteracy. The people of Pakistan want their children to go to school, and to work as honourable young people for their living. These are their major concerns which professional economists do not consider when preparing economic policies for the political bosses. The assumption underlying the behaviour of economic and political bosses is that the ordinary citizens would not revolt against injustice. This is a wrong assumption. Pakistan has been rocked by political turmoil, social instability, coups, corruption and chaos during the last five decades. The present government should learn from the past. What the people need is peace, progress, and shared prosperity. The roots of poverty lie in the unjust socio-economic structures. The government should address itself to finding solutions to the problems facing the people. If it does not, it will be asking for trouble. Pakistan's central problem is inequity in income distribution. DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS 970707 ------------------------------------------------------------------- Do we understand all of IMF-WB purposes? ------------------------------------------------------------------- M. B. Naqvi A CURIOUS development has resulted from the recent Denver summit of the G-7 or perhaps G-7 and a half. It is a direction to the BWls (Bretton Woods Institutions) that they should prepare banking supervision guidelines by April next year. The idea is to ensure and enforce good banking practices throughout the world, with special emphasis on improving the banking sector in the Third World. The stated aim of the operation is said to be to prevent a Mexico-like crisis being repeated in which an economic collapse may be feared. The budget would seem to be plausible, if not calculated to do something about the kind of situation that obtains in this country. There is no doubt that the situation in the banking sector in this country has been less than satisfactory. Most Pakistani banks before nationalisation in 1974 had been in private ownership and had engaged in malpractices that are well-known even to this day. Belonging to major industrial houses or empires; they certainly were a part of the cartel making processes. They were introducing the element monopoly in a big way, which is what actually justified the then PPP government in nationalising all banks which incidentally was in step with what the Indian government had also done. But what the nationalised banks did in Pakistan is not something that can warm the cockles of anyone who believes in the public sector. Different kinds of malpractices began in the nationalised banks. The government began to interfere in the internal working of individual banks and exert pressure over their management to extend loans to government favourites. What could be expected happened; most banks were saddled with big and growing bad debts because the government nominees who took loans on political recommendation were not keen on returning them at all. Most of such debts became bad debts and were written off or they continued on the banks books, accumulating interests. Most of the banks became risky operations and are basically bankrupt because of the growing corruption of other kinds, which is natural. Once a management does a thing which is economically and financially illegitimate, everyone will start doing other unprofessional things. In any case, banks have become overmanned and inefficient. Overmanning everywhere results in a loss of efficiency as extra manpower actually prevents higher productivity of those who would actually work hard otherwise. Then, other forms of corruption have also crept in. Once it became possible to advance risky and bad loans, the banking officials themselves went on a binge of advancing risky loans in which they were themselves interested by way of kickbacks or cuts. That is how banking sector today is crying out for early and efficient privatization. Such is the case in many other Third World countries. It is indeed possible to generalise: Third World being what it is, most of its crucially important economic sectors would also be inefficient. The BWls' recent literature has identified corruption as one of the major factors that has been the cause of unwinding of almost everything in Third World economies and in some of the developed ones also. As it happens, the banking sector occupies a key place everywhere. If corruption enters, the banking sector and banking operations become both inefficient and corrupt - and these two elements do go together - the rest of the economy cannot prosper; it will cause distortions in many other parts. But, as it happens, recent years have witnessed the regime of more or less control by BWls, especially the IMF, of Third World governments. As a result, most of the Third World has been forced into accepting globalisation and the discipline of the free markets. That has wrought economic havoc with many Third World economies simply because whatever little industrialisation has taken place has gone into a tailspin. There has been stagflation and recession in many Third World countries as a result of international free trade and lowering of tariffs. Local industries have gone to the wall simply because they could not compete with the more efficient foreign exporters. In this global situation, certain other weaknesses have also been introduced in the banking sector in some Third World countries such as Pakistan. The nitty gritty of day-to-day operations of the banking sector until very recently had specified that the government could borrow at much cheaper rates while banks were free to advance loans and advances to industrial and commercial groups at much higher rates of interest. That has been going on with the result that the banking operations have become very uneven. Meanwhile, bankers have prospered and increased the cost of their intermediation. In Pakistan today, it is anywhere from 4 to even 6 per cent which is a crying shame. Why? Because in the more efficient western economies the intermediation hardly ever goes beyond 2 per cent if ever; otherwise it is generally 1.5 per cent or thereabout. But new focus of interests is on other forms of what may be called either corruption or what pertains to the moral dimension. Two things have happened. One is privatization and deregulation on one hand, and globalisation through free trade with lower tariffs, on the other. These have resulted in the whole of the Third World suffering from the same set of economic troubles: recession in their economy; lower growth rates; smaller exports because of non- cheaper prices more imports and higher trade account deficits; and also hag her balance of payments deficits. Most of them have become indebted to the IMF and other international banks and a big and generalised debt crisis is looming on the horizon. Well, may the G-7 summiteers worry about the security and integrity of the western financial systems because of their having extended large loans to Third World governments which had to take them simply because of what globalisation and free trade had done to them. It is this background against which the recent recourse to the BWls by the Denver summiteers should be seen. Like the conditionalities that the IMF imposes on financially weaker governments, the international monetary authorities will now impose a different set of conditionalities on the recently privatised and miserable banks throughout the Third World. Some of the consequences can be foreseen. Led by the IMF and World Bank, they will hasten the process of privatization. Since they will insist on transparency and an elaborate way of ensuring the best transactions, the upshot is likely to be that most of the relatively small banks in the Third World would be gobbled up by huge multinational parties or financial giants. How would that effect the Third World? To begin with, it will result in the impoverishment and enfeebleness of Third World governments by isolating them from their banking system which will more or less come under the direct supervision and control of the BWls. How do the BWls act is known. Up to a point, the desideratum of their actions too is known. They work, for the most part, in tandem with American governments. In fact, their charters tell us that the veto power rests with just one major economic power which may no longer be the primus inter pares as it used to be in 1944 and 1945. But its control is as close and stifling as it has ever been. BWls' control, in the nitty gritty of life, means American control, no one can make a mistake on the subject. This is the true consequence of the globalisation. Having hobbled the Third World governments and robbed them of the attributes of sovereignty over most of the significant parts of the economy, the banks are now being brought under the hegemony of the same set of forces that would otherwise control governments all around the globe. This is a new kind of servitude that needs to be studied further by the Third World. The point is that while the IMF and World Bank prepare the guidelines for the supervision of the banking sector, it might be a good idea if some of the more articulate and aware sections of the Third World assign themselves the task of: (a) investigating what the implications of what the BWls control over the banking sectors all around the globe will be; and (b) to prepare a possible alternative set of guidelines for running private banks in the Third World that had earlier indulged in practices that are corrupt or kowtowed to government officials' demands that were illegal as well as politically motivated and thus suspect. In other words, Third World economists and banking experts have to write alternative guidelines of their own to ensure that a new universal financial imperialism does not swamp the Third World. DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS 970709 ------------------------------------------------------------------- Software Technology Park in the offing ------------------------------------------------------------------- Ansar Abbasi ISLAMABAD, July 8: The Government will soon launch a crash programme to make as much as $ 1 bn in next 30 months from the $ 600 bn worldwide effort to remove the millennium bug from the computer software, it is learnt. Both-public and private- computer experts and software companies operating in Pakistan, are being contacted by the Ministry of Commerce for the job which requires the computer operators having the knowledge of COBOL (computer language). The bug, is the basic fault in the mainframe systems that have been quietly running business and governments since the 1970s. The software designers who wrote the original codes for many of the older computer systems allocated only two digits in the date field to identify year. When the year 2000 arrives, many computers will drop back in time to 00 instead of 2000 which can yield spectacularly wrong answers to questions about dates, ages and interest calculations. To fix the problem, experts say the software has to be patched almost on trial-and-error basis, making small changes wherever dates appear, then running those changes through elaborate tests to simulate the software's performance on post 2000 dates. According to official sources, the Private Software Export Board had diverted the attention of the Government on the issue and said that the barrier 2000 problem is golden opportunity for small companies in Pakistan to earn foreign exchange. In its communication, the PSEB said: 'the servicing for this industry does not even require new high level skills. It requires knowledge of COBOL.' The government has asked different computer offices, both in private and public sector, to train the maximum possible manpower in COBOL in the minimum possible time. Minister for Commerce Ishaq Dar is holding a meeting with the vice chancellors of different universities during the week on the same subject. Meanwhile, the Minister has held a meeting with some private companies like Computer Society of Pakistan and Pakistan Software Houses Association (PASHA) to ensure their involvement in the crash programme. 'We have offered the private software companies that the government will provide all possible facilities to them in carrying out the work on millennium change,' a source in the Commerce Ministry said. The government intends to bring all different private companies in one building which would be wired up with all latest facilities for high speed data transmission. The Awami Markaz building near the federal Secretariat, is expected to be declared Software Technology Park where the private companies would be housed to conduct their operation. According to estimates, the year 2000 will cost in the range of $ 600 bn worldwide to correct the fault. It is said that the western companies will not be able to handle the job with their existing staff. DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS 970709 ------------------------------------------------------------------- BoI seeks simplification of procedure ------------------------------------------------------------------- Bureau Report ISLAMABAD, July 8: The Board of Investment (BoI) has proposed further simplification of the procedures for issuance of work permit to expatriate workers and also for giving permission to foreign sponsors to set up their project offices in Pakistan. Under the current procedure, in the case of work permit, the sponsors submit their request to the Board of Investment (BoI) on a prescribed form, giving detailed justification of employment of foreign nationals. The expatriate technical and managerial personnel working in manufacturing sector are, however, exempt from obtaining such work permits. These applications after due processing by the BoI are forwarded to the ministry of interior, intelligence agencies, State Bank and other concerned agencies. After getting necessary clearance, work permit is issued to the individual concerned by the BoI. All this procedure is to be finalised within 6 to 8 weeks time, provided the views and comments from various divisions/agencies are received within the prescribed time period. In the case of permission for opening of project offices in Pakistan, proposals submitted on prescribed pro forma are processed by the BoI in consultation with the State Bank of Pakistan, finance division, ministry of interior, intelligence bureau and ministry of foreign affairs. However, the involvement of so many ministries and agencies and the subsequent delays by these agencies in issuance of their respective clearance or views causes most applications to remain unprocessed for months together dampening the spirits of the prospective foreign investor in Pakistan. In view of this, the BoI has proposed that the exemption allowed to personnel working in manufacturing sector be extended to those projects which are approved by the government like infrastructure and power projects, petroleum projects and development projects. In other cases, where the matter is referred by the BoI to the concerned government agencies, they should make sure that their clearance or otherwise is sent to the BoI within a maximum period of two weeks. In case of no reply within the stipulated time period, the BoI may be authorised to issue the work permits conditionally to the concerned persons with the provisions that in case of adverse remarks from any agency, the same would be withdrawn. In the case of permission for opening project offices in Pakistan, if the documentation is complete, a provisional approval may be issued by the BoI forthwith subject to the condition that in case of adverse remarks from any concerned agencies the permission would be withdrawn by the government. After the issuance of provisional permission, the case will be circulated by the BoI to all the concerned government agencies for their clearance/comments within a maximum period of two weeks. If the company has the contractual obligation with any government organisation then, the case may not be referred to the concerned ministry/organisation. Normally, the permission for opening of project office is granted by the BoI for a period of one to two years, which is extended after its expiry. For extension the same procedure of consultation is adopted, which is time-consuming and unnecessary. It has, therefore, been proposed that the permission once granted remains valid till the foreign company remains operative in Pakistan. In case, there are any adverse reports, permission can always be withdrawn. In the case of work visas, any potential investor who remits a minimum sum of 150,000 dollars for himself and 25,000 dollars for each of his dependents, may become eligible to obtain work visa up to 5 years' duration for himself and the dependents. It is also proposed that potential investors from those countries from whom the inflow of annual investment in Pakistan exceeds 10 million dollars for two consecutive years, may be extended the facility of three years multiple entry visa. In the case of expatriates from India, Israel and the so-called terrorist states, it is proposed the ministry of interior may continue normal consultation with the concerned agencies prior to issuance of work visa. However, in case of the investors from major developed and capital rich countries, it has been suggested that ministry of interior shall intimate the concerned Pakistani embassies for issuance of work visas within 15 days from the date of issuance of permits by BoI. DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS 970708 ------------------------------------------------------------------- Govt. plans to disinvest banks, DFIs by March ------------------------------------------------------------------- Ihtashamul Haque ISLAMABAD, July 7: Privatization Commission has finalized a plan to disinvest all the nationalized commercial banks and financial institutions including NBP, HBL, UBL, NIT and ICP by March 1998. A decision has also been taken to disinvest the remaining 49 per cent shares of the Muslim Commercial Bank and 24 per cent shares of the Allied Bank before the end of March 1998. Sources said 10 per cent shares of each bank were likely to be offloaded through the stock exchanges of the country. The First Women Bank, according to the Privatization Commission plan, will be sold by the end of September next year. During the period the remaining 10 per cent shares of Bankers Equity would also be offloaded. "Next in line for privatization are Pakistan Railways, all the eight area electricity boards of WAPDA and Sui Southern and Sui Northern Gas Companies which are scheduled to be privatized during 1998-99", said an official of the Privatization Commission. Later, Karachi Electricity Supply Corporation will be put on sale. Although the privatization of all state-owned units will be disinvested on case-to-case basis, decision in principle has been taken to dispose of the units on cash without determining any time-frame for receiving such payments. "We have set an example by selling the Habib Credit and Exchange Bank on cash to a Dubai-based consortium", another official said adding that the policy of selling on cash had been adopted to retire short-term debt expeditiously. According to the plan, Heavy Electrical Complex, Heavy Mechanical Complex and Heavy Rebuild Factory will be disinvested later. In case of privatization of sensitive and defence-related units, the government would deal with the matter carefully as had been the case with the Pakistan Telecommunication Company. The remaining shares of the PTCL were also likely to be sold by June 1998. The officials of the ministry of finance and the privatization commission claimed they would get at least 15 billion dollars by privatizing all the state-owned entities in next three years. During the current year, the privatization of units is expected to fetch one billion dollars. DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS 970712 ------------------------------------------------------------------- Inflation for 12 months estimated at 11.80pc ------------------------------------------------------------------- Faraz Hashmi ISLAMABAD, July 11: The rate of inflation for the 12 months ending June 1997 has been estimated at 11.80 per cent, the Federal Bureau of Statistic disclosed on Friday. In June 1997, the CPI jumped to 196.95 from 175.14 in June 1996 but showed slight decrease of 0.31 per cent from 197.96 over the last month. The Consumer Price Index in the running quarter April-June 1997 increased by 2.22 per cent over the previous quarter from January to March 1997. However, the Sensitive Price and the Whole Sale Price indices also showed increasing trend in the quarter and registered a rise of 3.56 per cent and 1.60 per cent, respectively. All the three indices compared to the previous month May showed a marginal decline. The SPI decreased from 206.17 to 205.78 and WPI from 208.61 to 207.76. DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS 970710 ------------------------------------------------------------------- SBP limits govt's bank borrowing to Rs55bn ------------------------------------------------------------------- Bureau Report ISLAMABAD, July 9: The State Bank on Wednesday told the government it would not offer more than Rs55 billion as borrowing during the current year to narrow down the budget deficit. An adviser of the State Bank briefing the National Assembly's Standing Committee on Finance and Economic Affairs on the monitory policy of the country said the government would have to adhere to the bank borrowing limit of Rs55 billion to avoid unnecessary problems during the later part of the current financial year. He said that the committee was informed by the State Bank adviser that Habib bank and National Bank were showing profits while the UBL and the First Women Bank were showing a deficit of Rs270 and 280 million respectively. "We have proposed a number of measures for improving the performance of the nationalised commercial banks", said Mr Wattoo, the former finance minister. "We are informed that private banks are showing good profits and it is incomprehensible why the NCB's are not functioning properly", he added. Sardar Mansoor Hayat Tamman, MNA, who is the chairman of the Standing Committee on Finance and Economic Affairs presided over the meeting. The committee was given a comprehensive briefing by the State Bank adviser and other officials of the ministry of finance. The committee was informed that the nationalised commercial banks would be privatised in a record period of time and that the First Women Bank would be disinvested by September this year. The matter relating to the profitability of commercial banks before and after the privatisation also came up for detailed discussion. The meeting was attended by Mian Yasin Wattoo, Haji Abdul Lateef Afridi, Rana Tanvir Hussain and Haji Muhammad Bota. These members reportedly said they would very much like to take part in all discussions on economic matters and that the government should invite them off and on in the ministry of finance with a view to informing them about the state of the economy. They said they had no desire to unnecessarily criticise every issue but would be frank and honest in giving their opinion on economic issues. DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS 970709 ------------------------------------------------------------------- KSE 100-share index crosses 1,700 points barrier ------------------------------------------------------------------- Our Staff Reporter KARACHI, July 8: The KSE 100-share index on Tuesday crossed the barrier of 1,700 points as the strength of the base shares spilled over to other counters, aided largely by the presence of strong foreign support, but the buying interest remained largely selective. The net gain over the day was 34.49 points at 1,726.17. At one stage, early in the morning, it moved as high as 1,720 points and looked headed for its new resistant level of 1,750 points before profit-taking in the heavy weight index shares clipped its initial gain. Both Hub-Power and PTCL were massively traded but later selling brought their prices down, although on balance they managed to finish with an extended gain. However, in the evening trading, the index resumed its upward journey thanks to fresh covering purchases made by the foreign funds, the local institutional traders and bargain-hunters, pushing it to 1,726.17 points, showing a big rise of 24.76 points in CTS trading. "The KSE 100-share index is progressively moving towards its new chart point of 1,800 at which level it could take a technical breather," most analysts believe. However, its spectacular rise by 130 points or 8% just within a week could well be deceptive as it owes its relative strength to massive buying in PTCL and Hub-Power which together hold weightage of 35% in it. Although foreign speculative support is largely centred around half a dozen shares, notably Hub-Power, PTCL and ICI Pakistan, which together accounted for more than 50 million shares, it generated a good bit of sympathetic local buying on other counters. Analysts said the current change in the market psychology is certainly not reflective of the local tense scenario and could be deceptive in the long run. Some others said the advent of the foreign support that on massive scale could possibly change the current trading pattern and those who could peep into future are building up long positions where there is a potential of capital appreciation. "The foreign fund buying might not essentially be outflow from the Hong Kong stock market but it has certainly some meaning," they added. They said massive buying in FFC-Jordan Fertilizer, which has suddenly burst into activity and has assumed the role of an active scrip, could attract any amount of foreign support below Rs 20. Floor brokers said the buying on selected counters was massive but price changes were mostly orderly as there was no speculative increase in any of them. "For the first time in its trading history, stock trading is not influenced by the city situation and moving in quite opposite direction," they said adding "It means bull forces have the capacity to offset the negative impact of political twists and the law and order situation." PSO, which rose by Rs 5, was leading among the gainers, followed by Ghandhara Nissan, Pak-Suzuki Motors, Bengal Fibre, Engro Chemical, IGI and National Refinery, which posted gains ranging from Rs 1.75 to Rs 3. Barring fall of Rs 1.20 to Rs 2 in Crescent Bank, Pakistan Tobacco, Sitara Chemical and Telecard, losses were fractional and reflected lack of buying rather than large selling. Volume rose to 81 million from the previous 59 million shares, bulk of which again went to the credit of PTCL, up 30 paisa at Rs 34.70 on 24 million shares, followed by Hub-Power, higher 50 paisa at Rs 47.80 on 21 million shares. Other actively traded shares were led by FFC-Jordan Fertilizer, higher 70 paisa on 12 million shares, ICI Pakistan, easy five paisa on 7 million shares, and Dewan Salman, lower 20 paisa on 4 million shares, KESC, up 30 paisa on 0.490 million, Dhan Fibre, steady five paisa on 0.437 million, and MCB, higher Rs 1.05 on 0.201 million shares. There were some other notable deals also. There were 324 actives out of which 135 shares rose, 122 fell with 67 holding on to the last levels. DIVIDEND: Dadex Eternit, interim for the year ended June 30, 1997, at 37.5%. ------------------------------------------------------------------- SUBSCRIBE TO HERALD TODAY ! ------------------------------------------------------------------- Every month the Herald captures the issues, the pace and the action, shaping events across Pakistan's lively, fast-moving current affairs spectrum. Subscribe to Herald and get the whole story. 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970706 ------------------------------------------------------------------- The 'legend' ------------------------------------------------------------------- By Ardeshir Cowasjee TWO days after the publication in this newspaper earlier this week of his letter referring to me and my column on Rafi Raza's book, and claiming that ZAB was a 'legend', I ran into 'Devotee' Abdul Haleem Pirzada in the Supreme Court. We stopped to talk and he agreed with me that Medea, Calighula, Torquemada, Attila the Hun, Charlie Chaplin, Hitler et alia were all 'legends' in and after their lifetimes, who stood alone and strong, tyrannical or entertaining. Their memory cannot be destroyed. Abdul Haleem was appointed advocate-general of Sindh during Benazir's second round. Interference in his job and pressures put upon him to do wrong were too much for him to cope with, so, being a 'reasonable' man, he resigned. In his letter to the editor, he writes "Dr Mubashir had submitted his resignation twice before finally resigning in October 1974 as minister of finance. Mr Rafi Raza actually resigned twice, first as special assistant when he was virtually prime minister in that position and again as production minister in March 1977." Why did they both stay on after resigning the first time round? When a man is not shamming and knows his own mind, he puts in his resignation and goes. He cannot be persuaded to, and does not, stay on. And, incidentally, why did they both wish to resign? What was wrong? Was the government rotten? Was it doomed? Was their leader becoming impossible? Had his end become evident? Was the ship sinking? What crimes had the two committed for their leader and party? Why, after the 1977 elections, did Mubashir recommend that Rafi leave Pakistan? Why did they both leave before July 1977? From what were they fleeing? Pirzada further writes: "Cowasjee held two positions under the Bhutto government, as Chairman of the Tourism Corporation and the Port Qasim Authority. Did he voluntarily resign?" Of course I did not resign. In both positions (offered unsolicited to me by Bhutto and accepted without any obligation) I had sufficient powers to do what I thought was right and not do what the ministers and the secretaries ordered or suggested. In Port Qasim, for instance, I was offered a rare chance - given a bare beach on which to build a port. I had no reason to resign from Port Qasim, or from the innocuous entertaining tourism job. As I would not under any circumstances toe the official wrong line, I did not last long in either post. There was no choice but to sack me. Rafi Raza's book covers a crucial period in the history of what was, and what was left of, this country during the time Bhutto and his hand-picked men presided over the misfortunes of our land. It covers the period when our army shot at and killed our own people, when as a result of the misadventures of a few half the country was lost to the many. This was no mean disaster. The book is a cover-up, a vain excuse. It leaves unsaid far more than it says. It pleads ignorance. Close as the writer was to the 'Legend' (and he never fails to stress how close and indispensable he was), he states that the details of what transpired at a meeting between Yahya and ZAB on January 17, 1971, were not known. At a meeting between the two on March 5, "there is no full account of what transpired." They met again during the first half of March when Yahya was on his way to Dhaka, no one else was present at the meeting and the precise nature of the talks remain unknown. In Dhaka, between March 16 and 25, Yahya had meetings with Mujib and ZAB joined them during the last five days. What transpired during those ten days is difficult to verify. Yahya and ZAB met for a briefing on March 21, but no one knows what transpired. Yahya left Dhaka on March 25 without the PPP team's knowledge: "If ZAB knew anything about this in advance, he certainly gave us no inkling." On April 27 when they met, ZAB declined to comment or disclose details. In fact, most of ZAB's team mates, Rafi included, knew nothing of what transpired at the many meetings between ZAB and Yahya, but, Rafi concludes, facts inevitably suggest collusion. When for 25 days, between April 2 and April 27, Yahya did not meet ZAB, ZAB complained to Rafi that he felt "cut off." The 'Legend' was responsible not only for the Tashkent secret that was never revealed and in fact probably never existed, he was also responsible for the mystery of the Hamoodur Rahman report, which, as Rafi says, remains questioned in both its scope and its findings. According to him, it was ZAB who, in deference to the services chiefs, decided not to publish this report - a massive wrongdoing and a deception practised against the country and its people. Rafi can now make amends for just one of the wrongs. He admits that it was he who submitted the PPP position to the Hamoodur Rahman Commission, but that ZAB would not let him show the paper to any other party member or even discuss it. He states he is "probably the only person apart from the members of the Commission who has examined both the main Report and the evidence on which it was based." If this be so, then he should now come forth with the truth and tell us all what was in this Report that made it unfit for public consumption. Yahya is dead. He can tell us nothing. Why was he not accorded the benefit of a public trial, which time and time again he requested until his dying day? Was the truth so horrible that it had to remain hidden? Why was Yahya incarcerated? My good friend Admiral Ahsan, Governor of East Pakistan, "a gentleman to the last", is dead. He never put on paper what he knew, but he did disclose to those he trusted and to whom he was close that his firm belief was that it was ZAB and ZAB alone, the 'Legend' himself, who manipulated Yahya and the entire situation so that he could be - what he never could be were East Pakistan to remain - top-dog of his country. Yahya's faithful Lt-General, S.S.G.M. Pirzada, "de facto chief of staff and virtual prime minister", the chief of the CMLA's office, is dead. Lt-General Sahibzada Yaqub Khan, MLA in East Pakistan and after Ahsan its Governor, will not speak. He still awaits 'the call.' Air Marshal Rahim Khan, the then chief of the Air Force, is dead. Good old Gul Hasan, Lt-General of the Pakistan army, lives to regret that he was manipulated and dumped. General Tikka Khan, who took over from Yaqub, lives but has to protect himself by his silence. The good Vice-Admiral Muzaffar Hasan, the then commander-in-chief of the navy lives, has nothing to hide, and is not silent. Muzaffar, in September 1970, led a delegation to China. Zhou en-lai told him that trouble was brewing in East Pakistan, that it would have to be settled on a political plane. He categorically told him that he saw war clouds and if war did break out China would give Pakistan supplies, economical and political help, but that it would not commit a single soldier. He recalls that at the end of February 1971, a very disturbed Admiral Ahsan, the Governor of East Pakistan, then staying with him at Navy House, pleaded with Yahya yet again. A military solution will not work, he told him, our people are not flies, we cannot kill them. Under no circumstances, whatever be the pressure, the scheduled assembly meeting in Dhaka must not be postponed. An exasperated Yahya told him: "Convince Bhutto." On February 27, Bhutto along with Generals Yaqub and Pirzada came to meet Ahsan at the Navy House in Karachi, to try to 'convince' him. Muzaffar was not present. After the meeting, and after the other three had departed, Ahsan confided in Muzaffar. ZAB had calmly advocated the use of force, the killing of a few thousand 'bingos', would subdue them and resolve the matter. Ahsan was horrified. The two generals concurred, swagger-sticks under their arms, "Maar, maar kay inko thik kardenge." Muzzafar's diaries may not fill a book but can add another important missing chapter. He should make public what he has recorded. What followed is history. Ahsan resigned and came back to Karachi. Yaqub lost his stomach, and a few days later he too resigned and returned. There was carnage, there was a war of sorts, too many were killed. Then there was surrender and humiliation. What are we celebrating this year? Our aptitude and ability to shoot and kill thousands of our own people? Or, perhaps, how to lose half a country in half a century? DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS 970712 ------------------------------------------------------------------- Danger zone ------------------------------------------------------------------- By Mazdak A BULLET fired at close range travels at around a thousand feet per second and can drill through flesh, bone and tissue, inflicting terrible trauma and damage. Those of us who live in Karachi - and increasingly now in all the major cities of Pakistan - have come to accept news of murder and mayhem as yet another set of statistics at a par with the weather, the stock exchange and the depressing state of the economy. "5 Dead in Karachi", "3 Gunned Down in Lahore", and similar headlines in all our newspapers have become so routine, and we have become so battle-hardened, that most of us don't even bother reading the details. But when killers gun down somebody very close, the reality behind the headlines enters your private world, hovering like a vulture over the wounded. If you are lucky, the assassins' bullets do not hit a vital organ, and the rest of the family holds its collective breath as you walk in the shadowy world between the living and the dead. In a sense, Navaid Husain was lucky when two gunmen confidently walked into his office, shot him calmly in the head and the abdomen, and walked out, leaving him for dead. Fortunately, his office staff wasted no time in getting him into a car, and Navaid had the presence of mind to tell them to take him to the Aga Khan University hospital where he got very swift first-aid, and then a crack surgical team performed a medical miracle to save him after six hours of unrelenting struggle. The fact the Navaid is still alive four days after this very professional attempt on his life is due to a number of fortuitous factors that include the lack of panic among his colleagues and the treatment he received at the country's best hospital. But even more important, Providence seems to look after the foolhardy and the stubborn. A practising architect, Navaid is far better known for his crusading role with Shehri, an environmental NGO that is trying to protect Karachi against the depredations of the building mafia. Although he has received many death threats from members of this very powerful group, and indeed was once beaten up by the son of a Balochi sardar and his henchmen for trying to stop an illegal high-rise they were involved in, he and his colleagues have continued their lonely battle against the forces of darkness. They have received very little support from the rest of us, and now Navaid is struggling for his life because of what he was trying to do for the whole city. Clearly, activism of any kind is a dangerous business: recently, Umar Asghar Khan was roughed up and threatened over the development work his group, Sangi, is doing in the northern areas. Dr Akhtar Hameed Khan was dragged through the courts, facing a concocted blasphemy charge that carries the death penalty. Asma Jehangir, the famous human rights lawyer and activist, is no stranger to danger: she and her family have been threatened, and her house attacked for her unflinching commitment to the underdog. These are only some of the people who risk their lives on a regular basis so that this country can somehow stop its headlong slide into anarchy and chaos. But there are many other categories who would have to pay a hefty premium for life insurance: lawyers are suddenly at risk because they have accepted cases from clients on either side of the Shia-Sunni divide. There has been a spate of killings in Punjab in which lawyers have been targeted and gunned down in broad daylight for fighting legal battles for one or the other of the sectarian parties that are currently terrorising much of the country. Obviously, the idea is to frighten other members of the profession to the point that they refuse such cases. Even religious scholars and leaders are at risk: if you espouse a sect or a branch of the faith that opposes another, keep looking over your shoulder because you never know when the hit-squad will ride by on a motorcycle. But this hazard is not restricted to any one faith: if you are a member of any of the minorities, your life is at risk from the day you are born. Hindus, Christians and Ahmadis have all felt the sharp edge of fanaticism in the Land of the Pure, and they are familiar with the daily discrimination and danger their minority status brings. The policeman's lot isn't a bed of roses either. Considering their salary and the arduous nature of their duties, it is difficult not to sympathise with this generally unpopular profession. In Karachi especially, cops have been dragged over the coals: for three years, they were told that the MQM was the enemy. They were killed by the score as they fought a vicious urban war in which no quarters were given. To all intents and purposes, they were given a licence to kill, and by the same token, they were ambushed, tortured and gunned down. Finally, they succeeded in bringing a modicum of peace to our terrorized city. Then suddenly, the government of the day was sacked and the rules of the game were changed overnight. The erstwhile enemy became a coalition partner, hundreds of suspected criminals were released and the police were put in the dock for "custodial killings." It goes without saying that cops are generally (and correctly) perceived as a corrupt and ineffective lot. I know this is not very reassuring, but this is the only force we have between us and the rising tide of ethnic and sectarian violence. So the current round of cop-bashing in Karachi has only helped morale to fall even further, thus eroding whatever little effectiveness the police force possessed. There are other groups who are perpetually at risk. For instance, being a woman in today's Pakistan is not an enviable position. Repression and exploitation are part of the package, and as a bonus, there is the occasional rape, or the beaker of acid hurled in your face. As a special treat, some feudal jerk in the boondocks will parade a group of women around naked to prove his manhood and shame some rival. These are only some of the incidents of violence and the groups that are the targets. The common thread running through these disparate elements consists of weapons of all kinds. More and more, guns are available to the lowest common denominator, and the meanest thug is more than willing to pull the trigger on the slightest pretext. You can hire a Kalashnikov for about four hundred rupees a day, and a contract killer comes for around ten thousand. Under these conditions, what chance do people like Navaid Husain have? He and his colleagues at Shehri risk their lives every day, standing up to some of the most powerful interests in the country. The state and society give them virtually no support: on the contrary, all governments have viewed NGOs like Shehri and mavericks like Navaid with deep suspicion. The only answer is to dust off a proposal for a gun-free society that Shehri had advocated a couple of years ago, and try to disarm everybody. But unfortunately, the immature, macho elements in our society would feel undressed without their Uzis or their Mausers. Until their power is broken, brave but unarmed people like Navaid will continue to be gunned down, and our society will continue its slide into chaos. DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS 970707 ------------------------------------------------------------------- Hong Kong sunset ------------------------------------------------------------------- By Omar Kureishi I FIRST went to Hong Kong in 1947, en route to the United States. I remember it as a lovely island of about a million and a half people and not a single high-rise building on its skyline. I stayed less than 24 hours, enough time to take in the sights, such as they were. I thought no more of Hong Kong till 1956 when I went there again, this time en route to the People's Republic of China. It had changed beyond recognition. Lots more people, lots more bustle and a helluva lot of hustlers. Indeed hustling seemed to be its main industry. I stayed at the Miramar Hotel on the Kowloon side and took the Star ferry to get to the Hong Kong side. I recall sign-boards warning "Beware of Pick-pockets." It seemed an apt comment on Hong Kong itself. On that visit I met the writer Han Suiyin and had tea with her at the splendidly colonial Peninsula Hotel. She came to Beijing later and she became a good friend, translating China for me, not only linguistically but politically and socially. Hong Kong in those days was the tailoring capital of the world and you could get a suit made in a matter of hours. And that's why I walked into the tailoring shop of Melwani. Whenever I think of Hong Kong I think of Melwani. He represented the free spirit of the colony. He was a con-artist par excellence. Yet there was something lovable about him; I think it was his gift of being able to slit your throat without using a knife. He exuded great charm. Getting a suit made by Melwani was not an ordinary business transaction. It involved negotiations, bluff and bluster, a fascinating cut and thrust. One pitted one's wits against an opponent who was quite capable of dealing from the bottom of the deck. I made several trips to Hong Kong after this one and always found myself in Melwani's shop, starting from where we had left off on a previous trip. Melwani symbolised Hong Kong for me. He was there to make money. It was hard to define Hong Kong. It seemed to have no distinct identity. It had one singular characteristic. It was like a Las Vegas of commerce. But one always felt a little uneasy in Hong Kong as if great conspiracies were being hatched and great intrigues were being plotted. Apart from being a commercial hub, it was a listening-post and before China opened up, Hong Kong was the conduit for political information and disinformation and correspondents of Western media were camped there spinning their yarns. All this has become history now. Like many people I watched the ceremonies of Hong Kong's return to the Motherland on BBC and I thought ruefully that there was no BBC Television when the British left India. Mountbatten would have been in his element unlike Chris Patten who appeared to take Hong Kong's return to Chinese sovereignty personally. Tears were being shed by the battery of BBC's experts for Hong Kong's lost freedoms and civil liberties. There was not just the presumption but the certainty that these would be taken away and what we were seeing was mourning for them in advance. Strange indeed that the colonial rulers did not give two hoots for democracy in Hong Kong when their power was secure. The British ruled Hong Kong for 156 years and one did not hear any lament about unelected councils. Indeed, the Hong Kong Chinese were not even allowed inside the elite clubs leave alone become their members. The British saw the Chinese as "coolies" and it was the People's Republic of China, its formidable presence that brought a measure of dignity to the Hong Kong Chinese. Now, of course, there is concern for the future of democracy and the BBC chose to express this concern by showing picture after picture, dramatically lit up, of the People's Liberation Army trucks waiting on the border, to cross over at the stroke of midnight. These images were intended to convey something sinister, as if tanks would roll in and Hong Kong would be occupied. Much was made of the PLA's presence, as if the Chinese had already reneged on the agreement. It seemed elementary with Hong Kong reverting to the Mainland, there would be a stationing of their armed forces in their own country. There was very little mention of how the British acquired Hong Kong and why. While much was made of corruption in China, fears were expressed that this corruption would pollute Hong Kong, it was conveniently forgotten that it was the British who had introduced, indeed rammed opium down the throats of the Chinese. Nor of China's humiliation with the treaty ports that enjoyed extra-territorial rights, that is to say foreign concessions in Chinese cities where Chinese law did not prevail. This was only ended in 1945. When I visited Shanghai in 1956, my interpreter pointed out a building to me and told me that it had been a club where "Chinese and dogs were not allowed." I am sure there must have been clubs in Hong Kong as well with similar restrictions. The return of Hong Kong is a matter of great rejoicing not only for the Chinese people but for all those who lived through colonial rule. To speak of democracy in those days was tantamount to advocating sedition. Now, suddenly, democracy has become a virtue. The British left China peacefully and with dignity. There's no point in shedding crocodile tears over that was never their. DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS 970712 ------------------------------------------------------------------- Confronting corruption ------------------------------------------------------------------- Shahid Kardar FEW would disagree with the contention that nepotism, extortion and bribery have become a way of life, and not just with politicians - except that in their case it is exhibited more shamelessly. Corruption has become systematic. It has become institutionalised at all levels in such a way that it has become an integral part of the administrative, social and political culture. It evokes strong emotional reactions within the society and there is widespread concern about its extent. And in the recent elections it was one of the key issues. What are the reasons for this growing concern about corruption? It appears that the main reason is the growing scale of corruption which is gnawing away at the vitals of our society. The scandals involving political leaders, senior civil and military officials have resulted in the complete loss of faith of the people in government. Their frustration and disenchantment with the rising level of corruption has given way to cynicism and a sense of resignation and despair. They no longer believe that any meaningful action will ever be taken to control it and punish those perpetrating such crimes. They appear to have accepted corruption in the public sector as inevitable and uncontrollable, on the plea that the society as a whole is corrupt and beyond correction. This school of thought also argues that the rather low level of active societal resistance to corruption reflects how people have taken corruption in their stride, accepting it as part and parcel of a transaction with a public agency. The credibility of those in high places could never have been so low as it is today. Since citizens are the eventual financiers of the administration machinery they rightly feel indignant that their trust has been betrayed and the resources provided to the public sector from their tax contributions are misspent. It is not that corrupt practices are not found in the public sector in other societies. Corruption exists in one form or another in all societies. The major difference in the case of Pakistan is the extent of its pervasiveness and its implications for governance and the value system in general and the political culture in particular. Several activities undertaken by government - given its normal mandate in most societies - put it in a monopolistic position. Take, for instance, the granting of licences, and the regulatory role that the public sector is called upon to perform, like the formulation and enforcement of building laws. Some of these functions, like building regulations, cannot be left to the competition generated by market forces. Then, there are the discretionary powers that public agencies exercise in certain spheres. For instance, if the rules and criteria are simple to understand and administer and information about them is readily available then the government's decisions could be challenged by the citizens. Then there is the problem of poor accountability. Power corrupts when it is wielded without fear of accountability and reprisal. And when supervisors are in collusion with their subordinates it becomes difficult, if not impossible, to have an effective arrangement for accountability. The problem is accentuated by the difficulties of measuring both the performance of personnel as well as the impact of their decisions. The problem becomes more difficult to resolve simply because of the lack of appropriate reporting systems and supervisory controls, especially if cases involving disciplinary action can take years. Moreover, even under this definition, accountability is viewed more as a problem within the organisation and not as the accountability of the service provider to the recipient of the service, the consumer, which is the more important level of accountability. The users of the service generally do not know the rules governing service provision, especially regarding service standards, partly because such standards have seldom been developed. Current legislation in Pakistan does not require the government or public agencies to disclose information on decisions taken or actions initiated. The public has also been brought up on the tradition that they have no right to any information and hence do not protest against the lack of information and the secrecy maintained on even the most basic matters. Hence, they are simply unaware of their rights and the recourse available to them if these rights are denied to them. Even the political leadership wants to operate behind a cloak of secrecy, like the bureaucracy, and is not concerned at the denial of such a fundamental right to the ordinary citizen. The immediate, although limited, advantages of hiding the truth, since it suits the party in power, has far-reaching long-term implications. Although ultimately everyone loses, it does not prevent public representatives from taking a myopic, extremely short-term view. This situation is skilfully exploited by the bureaucracy, which is the real long-term beneficiary of a regime operating under the cloak of secrecy and confidentiality. Furthermore, most citizens do not encounter corruption on a daily basis, but on the basis of distinct episodes involving interaction with public agencies in specific circumstances. If a citizen is not exposed to corrupt practices frequently (from which he also does not benefit directly), he is less likely to invest time and effort in taking up cudgels against it and lobby vigorously for structural and systemic reform. The discussion above has hopefully described the phenomenon of corruption and its broad categories and the generic reasons underlying the high level of tolerance for corruption in Pakistani society. Corruption can be the product of collusion, in which both parties co-operate willing to enter into a transaction - for example, transactions involving award of contracts, deal fixing, fiscal concessions, rulings in favour of a party either at the expense of someone else or by depriving the agency of revenues from penalties imposed on transgressions, etc. Then there is corruption involving forced extractions in the form of bribes for rendering certain services or granting permissions, even of a routine nature, taking advantage of the plight in which the supplicant finds himself. At times bribes are paid in the hope of getting a favourable ruling. Much of the corruption of this variety is a product of the tradition under which people have been brought up, to keep in good humour the authority with the mandate to grant a permission; at times the purpose may not be to obtain a favour but to simply remain in the good books of the person carrying the authority to take a decision. Bribes paid either to extract favours or to ensure a level playing field - "in keeping with the traditions of the department involved" - are not only difficult to detect but also difficult to address by enlisting sizable support for reform. It would be relatively easier to garner support against corruption involving forced payments. The structures presiding over the functioning of our public institutions, the systems overseeing their operations and the general style of governance have a lot to do with the nature and extent of corruption. To address these issues in a meaningful manner by creating a favourable environment against corruption and corrupt practices, we will have to reduce the opportunities for indulging in corrupt practices and by reducing the incentives for public office, through greater privatisation and deregulation of the economy, decentralisation, merit-based recruitment, disclosures of the incomes and wealth of all representatives and key public functionaries, etc. A beginning in this direction will have to be made by reforming the political process. The way in which political parties are financed, particularly around elections, is central to this issue. Next we need to identify areas where control of corruption will be relatively easier and the gains will be high, especially in political terms. Some of the obvious proposals in this regard would be the following: There should be a requirement that all reasons advanced to justify the use of the discretionary power should be documented and accessible to all parties to the transaction. By introducing transparency the practice of exercising discretionary powers frequently, and with impunity, without fear of accountability will be automatically curtailed. People should have access to information on the decisions and actions taken by public authorities. The right to information is critical to the effective functioning of democracies. The Freedom of Information Act needs to be promulgated after appropriate revisions. Service standards need to be developed and the citizen should have information on the procedures and mechanisms for obtaining redress and the institutions to be approached for the associated remedial action. Wider distribution of such information will go a long way in empowering citizens to challenge corruption and abuse of power. Today the media is playing a major role in exposing corruption, thereby rendering a laudable service. It can strengthen the hands of crusaders against corruption by supporting and extolling the efforts of such people. The chambers of commerce and different associations of businessmen can collectively take the stand that they will not be a party to corrupt practices. So far, despite their complaints on the pervasiveness of corruption, they have chosen to remain silent on how this issue should be tackled. We all know the reason for this stance. Individual entrepreneurs only take into consideration the short-term interest of their own concerns, regardless of the fact that the business culture is being damaged in the process. Public interest litigation is also an initiative now beginning to gain some support. However, eventually, awareness and commitment on the part of public representatives and opinion makers to control corruption will determine the degree of success of the initiatives taken to check the growth of this cancer and to cleanse the system. We cannot expect the elite, the beneficiaries of the present system, to change a system that is heavily biased in their favour by devising mechanisms that will result in the withdrawal of their present privileges and the elimination of the rents that the current system confers on them. They will have to be forced into responding to organised and persistent pressure from groups in civil society for the reform and restructuring of the system. Currently, Pakistan does not, like countries with long standing democracies, have corrective and institutional mechanisms restraining the excesses of the decision makers. However, a host of changes are taking place both at the international and domestic levels which will facilitate the development of institutions, mechanisms and processes to bring to book the dishonest running of the national apparatus. In this regard, the most important opportunity today is being provided by the rapid pace at which barriers of knowledge and communication are being removed. The information revolution, thanks to satellite television and Internet, has improved our knowledge about the initiatives and efforts being taken by other nations, especially within the Asian region (such as the cases of corruption against political leaders being pursued vigorously in India and South Korea) to check the scourge of corruption. There is, therefore, some reason to believe that it will be difficult for the ruling elite, including the civil and military bureaucracies to continue to ignore, and keep at bay, those demanding greater transparency in the working of public agencies. Should one, therefore, feel optimistic about the future, that a ground swell will be created for putting in place credible accountability systems for the long-term viability of state structures?


970710 ------------------------------------------------------------------- Pakistan has good chance to win Asia Cup: Haroon ------------------------------------------------------------------- Our Sports Reporter KARACHI, July 9: The cricket manager of the Pakistan team Haroon Rasheed believes that his side had a good chance of winning the Asia Cup but added that Sri Lanka would start as favourites. The four-nation Asia Cup begins in Colombo on Monday with Pakistan playing the opener against Bangladesh. For the event, the team leaves here on Thursday morning. The former Test cricketer stated that Sri Lanka were a better knit team in the background that it comprise players who have been playing together since 1991. "Moreover, the Sri Lankans will be better aware of the conditions and, nature and behaviour of the strips." However, Haroon Rasheed, on his first assignment, said Pakistan had a good chance of winning. "The way the team played in the Independence Cup followed by the three-nation event in Hyderabad, Deccan, I am quite optimistic that we would be able to win the elude title." Haroon said the boys were determined to do well. "There is harmony in the team and the boys are keen to win with collective efforts rather than depend on a couple of players. "I agree that we will be without our senior bowlers but I think we are still the better team. The batting is reliable and there is more variety in the bowling department. "If slow and turning tracks are prepared, Arshad Khan, Saqlain Mushtaq and Mohammad Husain can really cause problems. "We are going there with an open mind but in one-day cricket no one can predict the outcome. Pakistan, India, Sri Lanka are capable of winning the title but all depends on which team plays well on those particular days." Haroon was anticipating a strong reply from India. "They will be aiming to settle the defeats they suffered at the hands of Pakistan in the two tournaments. "Azharuddin's inclusion has made the batting line-up more balanced but bowling is still India's weakest area. "Only complacency will be our enemy against India," said Haroon Rasheed. Haroon said Aamir Sohail's inclusion has been welcomed by all the players. "Of course, he is a valuable player who has an experience of over 100 one-day internationals under his cap. "He had been attending the camp and there was no ill-feeling as he was taking part in the team meetings and other training sessions." The cricket manager said during the training camp, fielding was given top priority "because it still remains our weakest area. Efforts have been made to improve it but 15 days is not an enough time to change it drastically." Haroon admitted that there could be a problem in batting. "Yes, it is a matter of concern but we have decided that Saeed Anwar and Aamir Sohail will open the innings and if either of two depart early, Shahid Afridi will be promoted so that 15 overs can be utilised. But if we get a sound start, Afridi will bat after Moin Khan. DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS 970706 ------------------------------------------------------------------- Sohail recalled to Asia Cup cricket squad ------------------------------------------------------------------- Ilyas Beg LAHORE, July 5: The dashing left-hand opener Aamir Sohail has been brought back into the Pakistan cricket team announced for the fourth Asia Cup Cricket Tournament on Saturday. Ramiz Raja, who captained the team in the Independence Cup in India, has been retained as captain and Saeed Anwar, who created a world record in one-day international matches by hitting the highest individual knock of 194 against India, will continue to be the vice-captain of the side. Former Test star Zaheer Abbas will accompany the team as manager, Aamir Hayat Rokari as associate manager and Haroon Rashid as coach. The Pakistan team will leave here for Karachi on July 9 (Wednesday) morning and from there fly to Colombo on July 10. Four teams participating in the competition, which gets under way on July 14 are: Pakistan, the host Sri Lanka, India and Bangladesh. The Pakistan Cricket Board (PCB) chief executive Majid Khan, in his Press briefing soon after the Council meeting said that the PCB Council approved the report of the disciplinary committee to finish the case of Aamir Sohail as he had paid the fine and also tendered "unconditional apology". Aamir did not provide any evidence in support of his accusations of match-fixing and betting against his teammates and requested to close the case. The National Selection Committee, which met on Friday afternoon with Salim Altaf in the chair and Zaheer Abbas and Haroon Rashid taking part in the deliberations, had decided to include Aamir Sohail in the team. The PCB Council did not object to inclusion of any player in the team including Aamir Sohail and endorsed the committee's decision. It also gave approval to the appointment of the above-mentioned officials. "In order to probe into any sort of allegations pertaining to cricket or cricketers, the Council appointed a committee with Justice Ijaz Yousaf as its convener. Its members are Mian Munir (Okara), Khalid Mahmood (LCCA) and Waqar Ahmad", said Majid Khan. The 14-member Pakistan cricket team has four openers. Besides the three experienced players Ramiz Raja, Saeed Anwar and Aamir Sohail, it also has the belligerent hitter Shahid Afridi Because of the turning pitches of Sri Lanka, the national selectors have made the department of spin-bowling very strong. Aamir Sohail is also a fine left-arm spinner. The team also has off-break bowlers Saqlain Mushtaq (who would be flying straight from England, where he is playing for Surrey, to Colombo) and Arshad Khan. It also has the left-arm spinner Muhammad Husain. The team includes three pacemen. The experienced Aqib Javed will be supported by the young right-arm medium-fast bowler Shahid Nazir and the left-arm medium-fast bowler Kabir Khan, who has also been re-inducted into the team. The pacemen lack the class and pace of stalwarts like Wasim Akram and Waqar Younis but can play their role in the side. Moin Khan is the only wicketkeeper of the team who is also a reliable batsman. The middle-order batting also looks formidable. It has the experienced old horses like Salim Malik and Inzamam-ul-Haq and a talented teenager Hasan Raza. The last-named will be temporarily leaving the Pakistan "A" team now touring Britain and coming over to Colombo to play in the Asia Cup Cricket Tournament before flying back to re-join the side. The team is not very strong in bowling but has a good batting line-up, although it will miss the in-form player Ejaz Ahmad Senior. Still, it has the capacity to do well in Sri Lanka. The full contingent is: Captain Ramiz Raja, vice-captain Saeed Anwar, Salim Malik, Aamir Sohail, Shahid Afridi, Inzimam-ul-Haq, Hasan Raza, Moin Khan, Arshad Khan, Saqlain Mushtaq, Muhammad Husain, Aqib Javed, Kabir Khan, Shahid Nazir. Manager: Zaheer Abbas, Associate manager: Aamir Hayat Rokari. Coach: Haroon Rashid. A new pattern of domestic cricket is being introduced from the coming season in October. The Quaid-i-Azam Trophy, Patron's Trophy and the National Under-19 Cricket Championship Grade One matches will be organised side-by-side. All the teams of the country will play matches during six months. Even the programme of Tests and international one-day matches will be run simultaneously without disrupting the domestic competitions. The Wills Cup Cricket Tournament of one-day matches is expected to be held in March or April next year. Majid Khan said that Haroon Rashid would continue to serve as a national selector. He also confirmed that the appointment of the Haroon Rashid has also been formally approved and regularised by the PCB Council. Back to the top.

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