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CONTENTS ===================================================================
NATIONAL NEWS Leghari to get free of charge access to govt houses Downsizing of Foreign Office proposed Appointing most senior judge as CJ not necessary, says Pirzada Reference against Benazir, Asif soon Rs105bn for health allocated Clinton's visit to Pakistan, India not postponed Six papers accepted CEC rejects Tarar's nomination Despair leads to rise in crime rate --------------------------------- BUSINESS & ECONOMY Making PIA 'great people to fly with' again Citibank appointed financial adviser for HBL Devaluation rumors keep investors away Futile attempts to conceal the whiplash of inflation Short-term foreign exchange bonds to be launched soon Sale of shares to foreign investors Forex reserves fall by $110m Inadequacies of Pakistan's IT industry exposed Rupee down 45 paisa within 3 days --------------------------------------- EDITORIALS & FEATURES Fascism on the march � II Ardeshir Cowasjee [Facism I] [Fascism III] PIA employees are its strength Omar Kureishi The bottom line of it Irfan Husain Wrong choice, Mr Prime Minister M.P. Bhandara Prospects after the crisis M.B. Naqvi ----------- SPORTS Anwar's knock helps Pakistan beat India Haroon defends Akram's captaincy in Sharjah England clinch Champions Trophy

Leghari to get free of charge access to govt houses
By Our Staff Reporter

LAHORE, Dec 16: The Punjab government on Tuesday directed all 
departments concerned to provide former president Farooq Ahmad 
Leghari free of charge access to official guest houses, rest houses 
and circuit houses in the province as he was entitled to it under 
the law.

According to a circular issued by the government to all 
administrative secretaries, commissioners, heads of attached 
departments and deputy commissioners in the province, the former 
president was entitled free access to government guest, rest and 
circuit houses in the Punjab under Section 3 of the President's 
Pensions Act, 1974.

"Therefore, necessary facility may kindly be extended to Mr Leghari 
free of charge," the circular said.

Downsizing of Foreign Office proposed  
Ihtasham ul Haque 

ISLAMABAD, Dec 13: The committee on reorganization of the Foreign 
Office has proposed complete restructuring of the organization, 
especially by closing down a number of inactive missions abroad and 
by retiring surplus staff both in and outside the country.
Replying to a question, he said his report called for restructuring 
the foreign office in such a manner as to make the service more 
attractive to brilliant individuals. He said he had recommended 
that efficiency should be rewarded with rapid promotions and 
arrangements be made for in-service training of mid-career 
officials. He expressed a hope that the task force on service 
reforms would take into account the recommendations of the 
Mr. Shahryar said the report advised the government to ensure that 
the proposed downsizing did not hurt Pakistan's interests and 
special care must be taken while pruning missions in important 
countries. Finance Minister Sartaj Aziz told Dawn the government 
would consider reorganization of the Foreign Office with a view to 
boosting trade and economic activities.  "The thrust of the report 
is to make Pakistani missions abroad effective so that the 
country's trade and economic interests could be protected 
efficiently," said the minister.
Commerce Minister Ishaq Dar was said to have proposed the early 
appointment of commercial attaches. He also called for appointing 
commercial attaches in South America and Africa.

Appointing most senior judge as CJ not necessary, says Pirzada
Rafaqat Ali

ISLAMABAD, Dec 16: Barrister Abdul Hafeez Pirzada, the counsel for 
the Chief Justice (under restraint) Syed Sajjad Ali Shah, on 
Tuesday, argued before the 10-member bench of the Supreme Court 
that the Executive was not bound to appoint the most senior judge 
as the chief justice of Pakistan.
He said the Executive (president\prime minister) had the power to 
appoint any person who was "qualified" to become a judge of the 
supreme court as the chief justice of Pakistan.
Mr Pirzada, who is arguing the case since Wednesday last, said the 
legislature had deliberately omitted the process of consultation in 
the appointment of the chief justice, and added that the courts had 
no power to rewrite the constitution. He said what was deliberately 
omitted by the legislature could not be inserted in the 
constitution by way of judicial interpretation. "The president 
appoints the chief justice who, in his sagacity, was the right 
person for the post," he said.
Mr Pirzada said under Article 177 the president/Executive had the 
power to appoint any person who was qualified to become a judge of 
the supreme court as the chief justice of Pakistan.

Reference against Benazir, Asif soon
By Our Staff Reporter

LAHORE, De 16: A reference involving receipt of Rs2 billion by 
former Prime Minister Benazir Bhutto and her spouse, Asif Ali 
Zardari, from a bullion trader is likely to be filed in due course, 
the Lahore High Court was informed on Monday.
Submitting para-wise comments on a writ petition moved by ARY 
Traders in the court of Justice Malik Mohammad Qayyum, Deputy 
Attorney-General Sher Zaman Khan said the accountability cell of 
the Prime Minister's Secretariat had completed its investigations 
and the case was likely to be forwarded to the Chief Ehtesab 
Commissioner to enable him to file a reference against the accused 
under the Ehtesab Act.
The petitioners � Haji Abdur Razzaq, Jan Mohammad, Abdur Rauf and 
Begum Rauf, all directors of ARY Traders � said in their petition 
that they were bona fide bullion traders, carrying on their 
business in accordance with the law of the land.
They had a valid licence for importing gold but were being maligned 
and harassed by the new government to coerce them into implicating 
the former PM and Senator Asif Ali Zardari in kickbacks. They 
called for quashment of the inquiry and termination of the media 
campaign against them.
DAG Sher Zaman said in his report said that the accountability cell 
had obtained sufficient documentary evidence to sustain a charge 
against the ARY directors as well as Ms Bhutto and her spouse.

Rs105bn for health allocated
Bureau Report

ISLAMABAD, Dec 17: The federal cabinet has approved a new health 
policy involving a total outlay of Rs105 billion to be spent over 
the next five years, Federal Health Minister Javed Hashmi said on 
Briefing newsmen after the cabinet meeting, the minister said the 
policy envisaged a number of legislative measures to regulate 
health services particularly in the private sector and to improve 
health standards in the public sector.
Spelling out the salient features of the policy, the minister said 
it was an attempt of the government to divert scant resources 
towards the benefit of the downtrodden instead of spending it on 
privileged classes.
NATIONAL HEALTHCARE SCHEME: The policy also envisaged a National 
Healthcare Scheme involving a total cost of Rs20 billion. The 
healthcare scheme, he said, consisted of four component: setting up 
of district health authorities, grant of autonomy to the district 
headquarters hospitals, contracting of the first-level care 
facilities to private physicians, NGOs or existing staff and 
launching of health card scheme.
HEALTH CARD SCHEME: Under the health card scheme, people in the 
rural and under-served urban areas would be issued special cards to 
facilitate provision of essential health services at nominal 
charges or free of cost through privatized health facilities.
DISTRICT HEALTH AUTHORITY: The District Health Authority would be a 
multi-sectoral district level body, with representation of 
government officials, community leaders and elected officials, 
possessing the authority and expertise to coordinate and supervise 
important district health management functions.
The policy, the minister said, had laid special emphasis on 
prevention of various diseases for which a total amount of Rs27 
billion had been earmarked.

Clinton's visit to Pakistan, India not postponed
Shaheen Sehbai
WASHINGTON, Dec 17: The White House said on Tuesday President 
Clinton's South Asia visit has been delayed but not put off and the 
President himself promised to go there in 1998.
"There are difficulties in each country which make it difficult for 
us to resolve everything and to have every kind of relationship 
we'd like to have. But I still intend to go there next year," he 
"What I'm trying to do is to develop constructive relationships 
with both of them and hope that they will have constructive 
relationships with each other," Clinton told his last press 
conference of 1997, so far his longest.
The White House said the Clinton trip had been delayed because of 
India's mid-term elections after the Gujral coalition was toppled 
last month.
"The United States has an enormous national interest in having 
greater positive involvement with all of South Asia, with India, 
with Pakistan, with Bangladesh, the other countries in the region," 
Clinton said.

Six papers accepted CEC rejects Tarar's nomination
Bureau Report

ISLAMABAD, Dec 18: Acting Chief Election Commissioner Justice 
Mukhtar Junejo on Thursday rejected the nomination papers of PML 
presidential candidate Justice Rafiq Tarar for making derogatory 
remarks against judiciary.
The acting CEC rejected the nomination papers of Mr Tarar under 
Article 63 (g) of the Constitution and conveyed the decision to 
Senator Anwar Bhinder, counsel for Mr Tarar.
Mr Tarar was not present when his nomination papers were rejected, 
however, his covering candidate Capt (retd) Halim Siddique and 
several other members of the ruling party were there.
The acting CEC accepted nomination papers of six other candidates, 
including Capt Halim Siddique, Aftab Shahban Mirani, Senator Mir 
Zafarullah Khan Jamali and Maulana Mohammad Khan Shirani, a JUI 
In a seven-page order released later Justice Junejo said: "I am of 
the view that case of Mr Tarar is covered by sub-clause (g) of 
clause (1) of Article 63 of the Constitution and since he cannot be 
elected as member of parliament, hence in terms of Article 41(2) of 
the Constitution of Pakistan, he cannot be elected as president of 
Pakistan. I therefore, reject his nomination papers."
Article 63 (1)(g) reads: "A person shall be disqualified from being 
elected or chosen as, and from being, a member of the Majlis-e-
Shoora (parliament), if he is propagating any opinion, or acting in 
any manner, prejudicial to to the ideology of Pakistan, or the 
sovereignty, integrity or security of Pakistan, or morality, or the 
maintenance of public order, or the integrity or independence of 
the judiciary of Pakistan, or which defames or brings into ridicule 
the judiciary or the Armed Forces of Pakistan."
Parliamentary Secretary for Law Syed Zafar Ali Shah, who termed the 
order of the acting CEC unconstitutional and illegal, said the 
decision would be challenged in the court through a writ petition.

Despair leads to rise in crime rate
Zafar Alam Sarwar

ISLAMABAD, Dec 19: The youths of federal capital and adjoining 
areas continue to suffer mentally and economically for want of joy 
and job. The cause of despair and despondency among young men, 
especially the educated ones, is unemployment which has ultimately 
led them to revolt against the status quo, according to an 
"Germs of social diseases like pick-pocketing, looting, dacoity and 
robbery have penetrated their minds, and it is no wonder if 
tendency towards crime is gaining momentum among the disappointed 
young class of society," said a professor of Rawalpindi college on 
It was the jobless educated people who were involved in about 60 
per cent cases of looting, dacoities and robberies, including those 
committed on Islamabad-Lahore Highway. The incidence of crime can 
not be ruled out on the motorway inaugurated by the prime minister 
on November 26, said a police investigator.
A retired bank officer told Dawn that a young man who graduated 
from the Punjab University applied for a job in the National Bank 
of Pakistan but there was no vacancy. "The only disqualification or 
demerit of the boy was that he did not carry with him any letter of 
strong recommendation (Sifarash) from the ruling elite". The young 
bright chap, instead of losing heart, went to a five-star hotel of 
Islamabad and asked for a job. He was prepared to work as an 
assistant at the reception desk if not accepted as a clerk in 
accounts section. He offered his service even as a peon in the 
hotel kitchen.
Denied a job, the young educated man was lured into a small gang of 
looters formed by a college fellow who too had failed to achieve an 
honourable living for a family of four living near Islamabad. The 
graduate job seeker was caught red-handed during the very first 
attempt while his accomplice escaped. The five-star hotel staff 
received a letter from that young educated man, saying: "Had I been 
given a job by you, I would not have landed in Adyala Jail".

Making PIA 'great people to fly with' again
Dr Farrukh Saleem

THERE REALLY was a time when PIA were "Great people to fly with". 
It actually was the first Asian airline to induct a jet into its 
fleet and also the first to begin operating a Boeing 737-300.
For the past two decades, however, PIA has been enriching a lot of 
private pockets at the cost of public money. Beneficiaries within 
PIA and politicians out in the government want to maintain the 
status quo.
Various political governments have also been abusing PIA as a mere 
instrument for the creation of patronage as opposed to running it 
as an efficient public enterprise. The hard reality is that the 
government now has no more money to waste. Heavily indebted as the 
government today stands, its lenders are no longer willing to 
finance the cocktail of "sifarish", that of corruption, 
mismanagement, and inefficiency.
The Government of Pakistan (GOP) must decide, once and for all, if 
it is willing to restructure its own creations of wholesale 
political malpractice. Restructure it must, whether out of its own 
will to improve the other 135 million impoverished citizens or 
under the dictates of foreign lenders. Its going to be a difficult 
Transformation from being run as a grossly mismanaged government 
department to becoming a commercially viable, service- conscious 
provider of air transport service will indeed be painful. The 
transformation would in essence mean a redistribution of power from 
politicians (who have had the discretion of appointing 'sifarshis' 
to non-existent lucrative jobs) to professional corporate managers. 
All of the 25,000 PIA employees would be hurt and our politicians 
won't enjoy seeing their privileges slipping.
Close to 8,000 people would have to be laid off. Fortunately, the 
World Bank appears to be in the mood of extending soft loans to 
form generous golden handshake packages. The ones who remain would 
have to begin contributing more in terms of revenue earning than 
they cost the company. Almost all entitlement programs would have 
to end. No free tickets for the employees or their families. 
Ideally, an all-inclusive market-based composite salary package 
that should include medical and pension benefits. A comprehensive 
bonus package should also be evolved to make employees dependent on 
customer satisfaction.
The most challenging of tasks for the top management would be to 
fibre out employees whose lost output would be smaller than what 
they are costing the company. The annual payroll must not exceed Rs 
7 billion which should actually improve the bottom line by about Rs 
1 billion. The annual fuel expenses can be made to come down by Rs 
500 million. The overall curtailment of entitlement programs and 
following the principles of running an efficient corporate shop 
would easily save the company another Rs 500 million.
The accumulated savings of some Rs 2 billion does not mean anything 
out of the ordinary. Professional airlines executives around the 
world, particularly the ones in Asia, have long been meeting 
comparable targets, earning similar profits and getting large 
annual bonuses in return. The public sector will not be able to do 
it on its own. The company is certainly not ready for an all-out 
privatization either.
The most feasible of alternatives would be to retain public 
majority ownership (at least for the time being) while 
depoliticising decision making, assigning "clarity of purpose and 
task", firmly establishing commercial principles, private 
responsibility along with financial and organizational 
independence. Given complete financial and operational autonomy, 
managers and employees should be held accountable for achieving 
specific, well-documented targets. The most critical of the targets 
being an annual net profit of Rs 2 billion.
The only thing that actually comes in the way of achieving the Rs 2 
billion profit target is the government's own will. According to 
leading airline analysts, PIA continues to dominate the "local 
airline industry on both domestic and foreign routes". It continues 
to have an overly committed customer base of "expatriates in the 
UK, the US, and the Middle East", in addition to the 100,000 
pilgrims. The airline is also a "key beneficiary of rupee 
devaluation as 60 per cent of its earnings is foreign currency 
denominated". What more can an airline ask for?
The government does not have much choice any more. Our politicians 
would have to learn the difference between patronage through 
employment and the actual running of a commercial enterprise.
Our elected leaders can surely choose to let the national carrier 
bleed a slow, premature demise. They may also want to wallow in the 
delusion that one of their colleagues would actually be able to 
restructure the PIA. The other side of the coin represents a tight 
national budget, strict lender conditionalities, and a brave new 
world that has economics and efficiency as its only guiding lights.
We are a developing country and the introduction of competition in 
the air transport sector is not a choice (the experimentation with 
private-sector airlines has all but failed). Markets continue to be 
weak and our government simply lacks the capacity to manage an 
airline entity.
Privatization may be the ultimate, but a distribution of shares 
through the stock exchanges (the British model) will not be 
successful because of lack of equity capital. Privatization by 
selling a strategic stake may not, at least at this stage, be in 
our best national interest.
Developing countries with weak markets-especially where the 
introduction of direct competition hasn't been viable- 
internationally competitive service contracts, outside management 
contracts, leases and long-term concessions have all been able to 
complement governmental efforts to restructure state-run entities.
The Brazilian government, for instance, has not only improved 
efficiency but also saved 25 per cent of its costs through the 
contracting-out of its road maintenance to private contractors.
In Malaysia, the government had decided to lease out Port Kelang 
and the private sector lessee has turned it into one of the most 
efficient ports in the country.
The Karachi Stock Exchange (KSE) values PIA at around Rs 8.90 per 
share putting the total worth of the company at no more than $70 
million. That is pathetic for an airline that flies to 46 
countries, covering four continents, 90 cities, and has a fleet of 
some 47 aircraft.
To make the most of PIA, the government should explore the idea of 
a five-year management contract with a possible three-year limited 
concession to be granted in favor of an internationally reputable 
operator with a minimum of Rs 2 billion annual lease payment 
payable to the national treasury.
As a pre-requisite to the scheme, there has to be a statutory 
regulatory body to administer pricing in a justifiable, transparent 
manner. The Asian Development Bank (ADB), along with the United 
Nations Development Program, could help draft a binding lease 
agreement with specific service quality targets � such as compliant 
rates, delays, and involuntary denials of boarding � to be achieved 
by the lessee.
The government must, at the same time, retain the right to dispose 
of part of its shareholding during the lease period. If the 
experiment is successful, everyone would come out to be a winner. 
The government's stake would be worth a good $200 million (PIA's 
book value per share stands at Rs 23 per share) and the country 
would have a viable, profitable enterprise.
What the government needs to set up is a structure that is not 
prone to political interference. What the ruling elite need to do 
is to "dilute resistance to reform". Nawaz Sharif may be the only 
political light on the horizon who can actually create a "political 
constituency to reforms." 

Comparison of Operating Expenses
              (% of Total Expenses)

Expense      Asian Average        PIA 

Staff           22.00%           29.00% 
Fuel            15.00%           20.00% 
Depreciation    11.00%            8.00% 
Maintenance     10.00%           11.00% 

(Sources: ABN-AMRO Hoare Govett; UBS/Global; Merrill-Lynch)

Citibank appointed financial adviser for HBL
Bureau Report

ISLAMABAD, Dec 15: The Cabinet Committee on Privatization here on 
Monday appointed the Citibank as Financial Adviser for the 
privatization of Habib Bank Limited.
The decision was taken at a meeting chaired by the Finance 
Minister, Sartaj Aziz. The Citibank has given an assurance that it 
will not purchase shares of HBL either on its own or through 
membership of a consortium.
The committee was presented a report on the divestiture of 25% 
remaining government shares in Muslim Commercial Bank (MCB) and 
decided to appoint a consortium led by Union Bank of Switzerland as 
the lead manager to deal with divestiture of government shares in 
The meeting reviewed the progress on the privatization of 
convention centre, Islamabad and was informed that a package plan 
has been formulated to privatize the centre. The total land of the 
centre has been earmarked for a five star hotel, shopping mall and 
the convention centre itself. The CCOP approved the plan for 
disinvestment of the centre.

Devaluation rumors keep investors away
Muhammad Aslam.

The KSE 100-share index suffered a decline of about 30 points at 
1,759.41 points compared to 1,789.35 points a week earlier, while 
market capitalization fell by Rs 13 billion at Rs 529 billion as 
against last week's Rs 542 billion .
Owing to late short-covering in some of the heavily capitalized 
issues including Hub-Power and PTCL at the lower levels, the KSE 
100-share index managed to cut early losses and was last quoted at 
1,759.41 points as compared to 1,789.35 points a week earlier, 
showing a fall of nearly 30 points. Some of the leading shares 
managed to put on good gains under the lead of Saudi Pak Leasing, 
Sana Industries, Pakistan Oilfields, Colgate and Lever Brothers, 
rising by one rupee to Rs 6.
Shell Pakistan, which fell sharply led the list of leading losers 
followed by PSO, Nina Industries and Sapphire Fibre, which suffered 
decline ranging from Rs 2 to Rs 3. PSO, which should have responded 
bullishly to the steep increase in sales from Rs 53 billion to Rs 
79 billion for the year ended June 30, 1997 and 100 per cent 
dividend also ran into post-dividend selling from some of the 
foreign investors and fell from its year's peak level of over Rs 
500 to Rs 445 for a 10-rupee share. Bawany Air Products, Engro 
Chemicals, Fauji Fertilizer and some others, which were quoted ex-
dividend also fell.
Trading volume was light despite massive buying and selling in Hub-
Power by foreign investors after the rumors of the devaluation of 
the rupee, falling to 215 million shares. Hub-Power accounted more 
than a half of the total as its average daily volume was more than 
20 million shares. PTCL, which was removed from the spot list after 
mid-week also joined the race of larger volume with Hub-Power and 
proved to be the second most active scrip. While the former fell 
from its peak level, the latter resisted larger decline.
ICI Pakistan and some of the leading foreign sponsored energy 
shares, notably Southern Electric and Japan Power were also 
actively traded and so did Sui Northern and Sui Southern but KESC 
remained dormant the market absorbed the news of Daewoo share in 
its equity.
Among the bank shares, MCB, Faysal Bank, Bank of Punjab and Askari 
Bank remained in active demand at the lower levels and so did Schon 
and Bank Al-Habib but price changes were fractional either-way. ICP 
SEMF Mutual Fund, Dhan Fibre, FFC-Jordan Fertiliser, Fauji 
Fertiliser, D.G.Khan Cement, LTV Modaraba, Engro Chemicals were 
also traded on the higher side amid active support at the dips.

Futile attempts to conceal the whiplash of inflation
Sultan Ahmed

IN A PERIOD in which there is sustained public protest against the 
soaring inflation in the country, finance minister Sartaj Aziz had 
come up with a claim that inflation was running at only 8.5 percent 
compared to 11 to 13 percent during the last four years. He hails 
that as the harbinger of the economic turn-around to come from next 
month following the prolonged recession. But the painful market 
reality is far different, and prices of goods and services have 
been going up steadily. He claims that inflation in the July-
October period was only 2.23 percent despite the several shortfall 
in crops, raise in taxation and the spree of sales tax and a hefty 
devaluation of the rupee.
The fact is that in view of the sustained high inflation in the 
country the IMF has under the Enhanced Structural Adjustment 
Facility to provide $1.6 billion over a three-year period agreed to 
an inflation rate of 10.5 percent this year, while it has permitted 
the East Asian states to which it has offered large aid packages 
only low levels of inflation, including just five per cent or lower 
to South Korea for which it has sponsored an aid package of $57 
billion. It is only by 1999-2000 when the ESAF expires the IMF 
expects Pakistan to have an inflation rate of 7 percent.
Clearly the IMF has no illusions about the capability of Pakistan 
to reduce the inflation rate even in a period in which China has an 
inflation rate of 1.5 percent � down from 22 percent � and India 
4.9 percent following the recent increase in taxes after it had 
come down from a high double digit.
East Asian countries as a whole have a low inflation rate beginning 
with Japan's 2.5 percent and Singapore's 2.5 percent while 
Indonesia has the highest inflation rate of 8.8 percent. And that 
had enabled those tiger countries to export more and more on a 
highly competitive basis and have soaring export volumes. How can 
Pakistan break away from its low export volume around $8 billion 
when its inflation is very high for long. How can Pakistan's 
slipping and struggling textile export compete with Indian and 
Chinese textiles when China has an inflation rate of 1.5 percent 
and India 4.9 percent? Added to that, they have low interest rates 
unlike Pakistan's high rates which raise the cost of production and 
exports, even the 13 percent export re-finance rate of Pakistan is 
very high compared to that of our competitors abroad.
While the government nervously plays around with duty-draw back 
schemes for exporters and has now come up with a restricted no-
duty-no-drawback scheme its principal tool for promoting experts is 
large devaluation of the rupee like 13.2 percent devaluation of 
last year and the 8.7 percent devaluation of October 15 last. But 
that is a self-defeating tool as after a brief initial export boom, 
like the rise in exports by 15 percent in November following 
October's hefty, devaluation, exports fall again.
Soon after a large devaluation prices of all imported inputs into 
the exports, energy and transportation costs and industrial wages 
go up and exports are back to square one as has been proved time 
and again. And yet there is spirited speculation now of a 4 to 6 
percent devaluation within a few weeks as it has become the last 
resort of the government to boost exports, and now to earn larger 
revenues as well which again has proved to be a counter- productive 
exercise. While rise in exports slumps following their post-
devaluation rise, imports fall and along with that the customs 
revenues, as has happened following the 5.3 percent fall in imports 
during the October-November period. All that may result in a 
shortfall of Rs 20 billion in revenue in the first half of this 
financial year ending December 31.
Even if the rise in inflation in the last 12 months is only 8.5 
percent as claimed by Mr. Sartaj Aziz, that represents a rise over 
the accumulated inflation of the last seven years as the base for 
calculating inflation is 1990-91 and since then the Consumer Price 
Index has risen by 89. 18 points by July last. And the 8.5 percent 
rise in inflation during the last 12 months ending October is an 
8.5 per cent rise over that accumulated inflation, index-wise the 
rise over the 1990-91 base year is almost 100 by October and that 
is too alarming. Hence the IMF stipulated that inflation should 
come down to 7 percent by 1999- 2000 instead of the index rising by 
another 100 points between now and 2000 or tripling the prices by 
that year over the 1990-91 base year.
The fact is that while the Federal Bureau of Statistics calculates 
the rise in inflation on the basis of percentages the people who go 
to the marker calculate the rise on the basis of rupees which is 
always ever large. And that really hurts while a small rise over 
the accumulated inflation of seven years may seem very modest. And 
that is a statistical illusion which does not deceive any-one but 
harms the poor and the low income groups a great deal, and 
undermines the growth of middle class in Pakistan with all its 
social and political fall-out.
Look at the heavy impact of devaluation between August and last 
year and October this year! The dollar has risen by Rs. 7.40 before 
it reached the current exchange rate of Rs 44.05.  As a result 
Pakistan imports at $12 billion cost Rs. 528 billion now, compared 
to Rs. 428.4 billion then, a large increase of Rs. 100 billion 
dollars. But the consumers paid far more than this staggering sum 
as the import duties, sales tax, excise duties, advance tax, etc 
rise along with the increase in the rupee cost of imports. To claim 
a small rise in inflation after all that is adding insult to injury 
to the people who are victims of the sustained inflation and hefty 
doses of periodic devaluation.
How can inflation rise by only 8.5 percent in a year after support 
prices for wheat were raised by 30 per cent and actual Atta prices 
rose far more in the market due to market manipulation and 
speculation with the corrupt food departments playing their 
nefarious role as usual! 
Sugarcane support prices have been raised by 50 percent while many 
growers have been demanding far more and that has to push up sugar 
prides. Support prices of other crops, including rice and edible 
oil seeds, were also pushed up considerably and so there was a 
steep rise in prices of agricultural products. And when food prices 
rise all other prices rise.
When the agricultural output last year ending June 30 was a nominal 
0.8 percent vis a vis the over 5 percent of the preceding years, 
and major crops recorded a fall of 4.5 percent, how did the finance 
minister expect agricultural prices not to rise substantially and 
push up the inflation line steeply?
Taxation increases, including the spread of sales tax to many new 
items, also increased the price level. Now provincial governments 
have also increased their taxes and the local bodies have become 
too rapacious through the use of enhanced Octroi rates.

Sustained devaulation

The sustained devaluation of the rupee increases the POL prices 
from time to time and that means higher power and gas prices at one 
end and sharp, often arbitrary, rise in transportation costs both 
for men and goods. All that leads to rise in industrial wages, more 
so in the organized sector, and lower wage rise elsewhere. Added to 
that is the high interest rates which enhance the cost of 
production which is passed on to the consumers after the profits 
had been raised correspondingly.

Corruption cost

Then there is the high cost of corruption at all levels for which 
the consumers have to pay eventually. And as inflation rises and 
goods cost more, the traders resort to use of short weights and 
measures and take to adulteration in a big way, sometimes by mixing 
dangerous substitutes with the real goods.  Hence other countries 
give top most priority to fight inflation and succeed, and we 
merely understate the inflation figure habitually.

Short-term foreign exchange bonds to be launched soon
Staff Reporter

KARACHI, Dec 13: The government is planning to launch a new short-
term foreign exchange bond within the next two weeks to improve 
balance of payments position, said the Commerce Minister Mohammad 
Ishaq Dar. "The projected bond, is expected to generate a couple of 
hundred million dollars by the end of the current fiscal, year. 

The new bond would be tradable on the Stock Exchanges in the 
country. The forex bonds would be of dollar and sterling 
denominations only, he said, adding that proposals for duetche mark 
and yen were not supported. The commerce minister said that for the 
first six months it would be at the rate of 0.75% above Libor and 
for one year at 1.00 per cent above Libor. The minister said that 
the launching of the new forex bond would lead to gradually phasing 
out of long-term bonds like FEBC which is for a five-year period. 

He categorically denied speculations about devaluation of Pakistani 
rupee and said. The commerce minister also disclosed that the 
government was planning to generate at least Rs 10 billion, without 
affecting bank borrowing limits and affecting commitments with 
international donors, for financing public sector projects. In this 
regard, he said that a committee had been formed to identify such 
public sector projects. 

The public sector spending would bring about a marked improvement 
in the economy even at the micro-level, he claimed adding that Rs 
35 billion were expected to be channelized in the system by June 
next year as the government was expecting good cotton, wheat and 
sugarcane crops. Referring to government measures to improve the 
economy at the macro and micro levels the minister admitted that 
last year was a bleak period and there was a lack of purchasing 
power in the system which ought to be corrected.

 He said that the government was undertaking various measures to 
remove fiscal and trade imbalances. Dar claimed that during the 
first five months of the current fiscal (Nov 30) a reduction of 
$505 millions was achieved in trade deficit, exports grew by 7.8 
per cent over the corresponding period last year. He said that 
balance of payments deficit would be reduced by $1 billion by the 
end of the current fiscal. Ishaq Dar said there was enough 
liquidity in the financial sector and the business sector should 
take advantage of the positive indicators at the macro level. 
He was critical of the policy of developed countries to impose non-
tariff barriers such as anti-dumping duties and social barriers 
including Social Accounting (SA-8000) certification. "We will  
contest these issues in next meeting of WTO in May 1998", he added.

The minister said exporters have to produce high quality products 
for exports at a lower price to compete in the international 
market. Dar said by bringing in transparency in the textile quota 
allocation, he has deposited Rs 750 million in the national 
exchequer. Similarly, he said the government has saved $50 million 
or Rs 2 billion by bringing in changes in the wheat freight. He was 
critical of the companies which did not pay dividends to the 
shareholders and suggested that some corrective measures should be 

The minister also proposed some changes in the working of stock 
exchanges to protect the interest of small investors and discourage 
the bad practices of corporate sector, including non-payment of 
dividend and avoiding the holding annual general meetings. He 
proposed that companies who do not give dividend for three years 
should be brought to the defaulters counter. Similarly, he said, 
those who do not hold two annual general meetings and fail to pay 
annual listing fee in 9 months should also be placed in the 
defaulters counter. "It should be the joint task of securities and 
exchange commission and stock exchanges that companies pay 
dividends and rights of minority share holders are protected", he 
added. He also supported few KSE demands and said he will discuss 
these matters with the concerned authorities for the amicable 
solution. He said proposal regarding part listing, wholly public 
sector corporations will be considered by the government.
The commerce minister appreciated performance of the companies in 
1996 which he said was difficult year for the economy. 
Earlier, the KSE President Arif Habib in his welcome address 
demanded extension in one-time tax exemption from Capital Gains on 
the conversion of individual membership into corporate entities. 
Shamim Ahmed Khan, Chairman CLA said government was focussing on a 
three-pronged capital market reforms programs that included 
rationalization of fiscal treatment, revamping and restructuring 
regulatory framework and development market infrastructure. 

The companies who were awarded certificates included Brooke Bond 
Pakistan Limited, Fauji Fertilizer, Investment Corporation of 
Pakistan (ICP), Cherat Paper sack Limited, Hashmi Can Company 
Limited, Pakistan State Oil (PSO) (13th consecutive time), Greys of 
Cambridge, Engro Chemicals Pakistan Limited, Knoll Pharmaceuticals 
Limited, Attock Refinery Limited, Lever Brothers Pakistan Limited, 
Pakistan Refinery Limited, Hinopak Motors Limited, Dawood Hercules 
Chemicals Limited, First Imroze Modaraba, BOC, Pakistan Limited, 
Thal Industries Corporation Limited, Burshane Pakistan Limited, 
Spencer and Co Pakistan Limited, Shabbir Tiles and Ceramics 
Limited, Al-Ghazi Tractors, Millat Tractors Limited, Noon Sugar 
Mills Limited, Adamjee Insurance Company Ltd and Dadex Eternit 

Sale of shares to foreign investors
By Our Staff Reporter

KARACHI, Dec 16: The State Bank of Pakistan has allowed local 
companies to issue shares to foreign investors after obtaining 
"Entitlement Certificate" for investments in foreign exchange.
A SBP circular issued to all authorized foreign exchange dealers on 
Monday said that once the shares have been issued to non-residents 
on repatriable basis, the share certificates can be exported and 
remittance of dividend and disinvestment proceeds will be 
permissible according to the procedure laid down in the foreign 
exchange manual.
The Central Bank instructions follow the official decision to allow 
foreign investment on repatriable basis in services, 
infrastructure, social and agricultural sectors as spelt out in the 
Investment Policy 1997. 
The circular, however, provides that permission for remittance of 
disinvestment proceeds for investments in farm sector will be given 
on specific basis on submission of the permission given by the 
federal/concerned provincial government.
In case of investment in agriculture sector/reclamation and 
cultivation of land, transfer/sale of leased land requires specific 
approval of federal and concerned provincial governments.
As prescribed, the Entitlement Certificate will be issued by the 
State Bank on submission of required information through a 
designated authorized dealer as detailed below:
1) Encashment Certificate (EO) and/or Proceeds Realization 
Certificate (PRC) from an authorized dealer in original showing the 
amount of foreign currency received and its rupee equivalent paid 
to the company. 
Where the whole or part of the foreign equity is desired to be 
retained in Special Foreign Currency Account for the purpose of 
import of plant and machinery for the project, permission for such 
retention would be given by the State Bank on the basis of the 
financing plan of the company and the 'Entitlement Certificate' 
will be issued after the foreign equity contribution has been 
credited to the foreign currency account of the company.
2) Memorandum & Articles of Association and Certificate of 
3) An attested copy of Board of Investment's Registration Letter 
along with confirmation of the company that all required 
formalities/ approvals have since been completed/obtained.
4) Particulars of sponsor share-holders with name, address, 
nationality, proposed number and face value of shares to be issued.
APP ADDS: The private sector has been allowed to obtain foreign 
currency loans from banks without any government guarantee.
Following the announcement of Investment Policy 1997, the State 
Bank of Pakistan (SBP) issued a circular Tuesday bringing 
amendments in Foreign Exchange Manual allowing the private sector 
to obtain loans.
In terms of the Government's Investment Policy - 1997, long-term 
loans can be arranged from a bank, financial institution, parent 
companies of multinationals or under suppliers credit.
The Central Bank has issued fresh directives to authorised dealers 
in foreign exchange and brought following amendments in paragraph 
47(ii) of Chapter XIII of Foreign Exchange Manual:
'As an exception, private sector entrepreneurs may obtain foreign 
currency loans from banks, financial institutions, parent companies 
of the multinationals and as suppliers credit including credits 
under PAYE Scheme, not involving government guarantee, for 
financing foreign currency cost of the projects covered by the 
Government's Industrial/Investment Policy and the instructions 
issued by SBP from time to time.  
The loans should be contracted on the best possible terms. The 
repayment period of such loans/credits, however, should not be less 
than five years.'

Forex reserves fall by $110m
Staff Reporter

KARACHI, Dec 18: Pakistan's foreign exchange reserves fell by $110 
million to about $1.184 billion on December 13 from $1.294 on 
December 6, according to the statistics issued by the State Bank of 
Pakistan on Thursday. This brings the total decline in the reserves 
within a month to $437 million. On November 29, the country had 
$1.621 billion worth of reserves.
Senior bankers link a huge $110 million fall within a week to 
repayment of foreign debt and outflow of swap funds in the wake of 
rising cost of foreign funds and declining yield on the short term 
federal bonds.
They say that the cost of mobilizing dollar-denominated funds has 
gone up to around 13 per cent whereas the return on six-monthly 
STFBs has been less than that. Hence the outflow of swap funds.

Inadequacies of Pakistan's IT industry exposed
Our Correspondent

ISLAMABAD, Dec 18: The none too enviable status of Pakistan's 
information technology and telecommunications production industry 
was exposed in the light of WTO agreements during the study group 
meeting of Sustainable Development Policy Institute (SDPI) here on 
The document on privatization of Pakistan Telecommunication was 
termed as seriously flawed which did not address the core issues. 
Government's necessity to borrow was cited as the major cause 
behind Pakistan's strategy for privatization of PTCL. The speakers 
spoke about the pitfalls that awaited Pakistan if the government 
did not remove the flaws in privatization strategy.
It was stated that Pakistan's imports to exports ratio in 
Information Technology products was 100 to 1 during the last six 
years. From 1991-1996 Pakistan imported IT products worth over Rs 
95 million while exports during the period came to Rs 1.1 billion 
according to the Bureau of Statistics. 
It was stated that Pakistan superficially stood to gain after 
signing the WTO Agreements but when one looked at the facts and 
figures, the reality became nightmarish. It was pointed out that 
since the eight developed countries through their multinational 
companies held control in IT, therefore it was no wonder that they 
also called the shots. When the question of exploring markets of 
fellow Muslim states was debated, it was revealed that apart from 
five Muslim states others had better telecoms infrastructure than 
Dr Arshad Zaman said Pakistan had already notified its national 
schedule in telecommunication and was bound under the WTO regime 
with effect from January 1, 1998. The component of foreign 
ownership, he said, was against the national interests. The 
government should protect its market, he added.
Besides, he said, Pakistan's range of service was limited, 
commitments were limited while at the same time there would be 
influx of foreign supplies as no longer there would be any 
restriction on those countries. 

Rupee down 45 paisa within 3 days
Staff Reporter

KARACHI, Dec 19: The rupee lost 20 paisa to a US dollar in the open 
market on Friday as the greenback buying and selling closed at Rs 
46.05 and Rs 46.10 at 3:00. pm � up from Rs 45.85-Rs 45.90 on 
Thursday. Official rates remained unchanged at the October 15 level 
of Rs 44.05 and Rs 44.27 for spot buying and selling of a dollar.
This brings the total loss the rupee suffered against a dollar to 
45 paisa within three days. On Tuesday, the dollar had closed in 
the kerb market at Rs 45.60 and Rs 45.65 for respective buying and 
"It seems the dollar buying spree has rebounded," said a money 
changer referring to the temporary stability the rupee showed in 
the open market after the State Bank denied a further devaluation 
last week. The December 12 denial had helped the rupee regain 90 
paisa to a dollar within 24 hours.

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Back to the top.
Fascdism on the march � II
See also [Facism I] [Fascism III]
Ardeshir Cowasjee

AN open letter to Justice Ajmal Mian, the honourable J-1 of the 
Supreme Court:
As a citizen of Pakistan, no more no less, I address you, today the 
principal custodian of the honour and dignity of the judiciary of 
Pakistan, particularly that of the Supreme Court. You may perhaps 
have read my column printed last Sunday, the manuscript of which is 
sent herewith.
The crucial issues pending before your court include;
* Contempt of court action against Nawaz Sharif and seven others.
* Petition regarding the unlawful allotment of thousands of plots 
by him when chief minister of Punjab.
* Petition regarding the unlawful ISI distribution of Rs 140 
million of the people's money to him and others.
* Petition regarding award of wheat transport contract by him to 
his crony Saeed Shaikh.
* Petition regarding his misuse of power in pressurising banks to 
settle loan cases out of court.
* Petition challenging his Anti-Terrorism Act 1997.
* Petitions regarding suspension of 13th and 14th Amendments.
Fascism has been on the march in our country from 1954 a mere six 
years after Jinnah's death. Governor General Ghulam Mohammed used 
fascist force to try to prevent Maulvi Tamizuddin Khan from 
arriving at the High Court of Sindh to file his petition against 
the dissolution of the Constituent Assembly. He ordered that 
Tamizuddin be arrested before he could get there, and the High 
Court was surrounded by the police. Disguised in a burqa, 
Tamizuddin managed to get through to the Deputy Registrar, Roshan 
Ali Shah, father of the Chief Justice of Pakistan, Sajjad Ali Shah, 
held by certain of his bretheren now to be "under restraint."
Roshan Ali protected Tamizuddin and took him to Chief Justice Sir 
George Constantine, who accepted the petition and ordered the 
police to disperse or face action. You will also recall how, in 
1973, District and Sessions Judge of Sanghar Mohammed Owais Murtaza 
was hand-cuffed, arrested while presiding over his own court, and 
jailed by provincial minister Jam Sadiq Ali, as ordered by Bhutto, 
for having granted bail to certain men he had imprisoned. The 
steadfast CJ Tufail Ali Abdul Rehman stood his ground and 
protested. Why was his judge humiliated, why was he, the Chief 
Justice, not consulted? Judge Murtaza moved the High Court for bail 
and Bhutto had him released before his application could be heard 
by Tufail Ali Abdul Rehman.
It was also in the 1970s, when I first heard of you. You were a 
young legal adviser of the Karachi Port Trust. My father Rustom, 
the senior-most trustee, was acting as the Chairman of the Trust. 
One fine morning, an agitated Chief Engineer Aftab informed him 
that Chief Minister of Sindh Mumtaz Bhutto had arranged to lay the 
foundations of a labour colony on port land that afternoon. The 
platform had been erected, flags were flying and buntings hung. My 
father immediately wrote off to the CM telling him that the land 
was port land reserved for its development, that he should 
therefore cancel his building programme and save himself 
Within minutes, the gruff CM telephoned. Who are you? he asked, and 
how dare you address me as you have? Dared I have, replied my 
father. Right now, I am the Chairman of the Board of Trustees of 
the Karachi Port Trust, and therefore the chief conservator of all 
the land and water notified as falling within the port limits.
Whoever you may be, responded the Talented Cousin, always remember 
that every inch of land in Sindh is mine to do with as I will. What 
will you do if I lay the foundation stone and build a colony? I 
will file a petition in the High Court, came the answer, and stay 
your designs.
At lunch that afternoon, my father related this exchange to his 
sons. But, he said, we have a clear-headed young lawyer. "Ajmal 
tagro che," and Tufail will stay Mumtaz's hand within fifteen 
minutes. However, before we could finish lunch, Aftab rang saying 
that the platform, flags and buntings had all been removed and the 
ceremony was off.
My father could act as he did, banking on an honest High Court 
presided over by a fearless CJ who would feel bound to protect the 
Moving forward to the present, may I request that this letter of 
mine be accepted as a petition, and that you take suo moto action, 
for the gravest contempt committed in the face of the court, 
against those who stormed the Supreme Court on November 28 as well 
as all those responsible for organizing, paying, and directing them 
to so do, and that severe deterrent punishment be handed down to 
all of them. (Possibly taking their cue from the Nov 28 happening, 
50 mobsters on December 12 attacked the court of a civil judge of 
Faisalabad). Collectively responsible and guilty is the entire 
federal cabinet and its primus inter pares.
As evidence, sent herewith is a cassette. You will see clearly from 
this video recording, that the disgraceful and unprecedented scenes 
that took place on the premises and inside the court building on 
November 28 were undoubtedly government inspired and led, funded by 
the peoples money. You will, as did I, recognize certain prominent 
members of the present government, of the Senate, the National 
Assembly and the Punjab Provincial Assembly. And should you be 
familiar with the Muslim Leaguers of the prime minister's own home 
town, Lahore, you will no doubt see many familiar figures, 
flaunting the flag of the ruling party, proving that the 
substantial and violent mob was bussed in from the provincial 
capital specifically for the raid.
You will see on the portion taken from BBC tracks, that prominent 
in the pushing, shoving and shouting crowd outside the court is the 
well known federal minister Mushahid Hussain who works closely with 
the prime minister. As he jostles along he is smiling the smile of 
sweet success and contentment. You will observe that he made no 
effort to pacify or dissuade the mob. Clambering over the gates of 
the court premises can be spotted the ample figure of MPA Sa'ad 
Rafiq, a former leader of the Muslim Students' Federation. 
Encouraging the attack is the since- sacked-then-reinstated 
political secretary to the prime minister, Mushtaq Ali Taherkheli, 
who later was interviewed by the BBC. You will also see the many 
law enforcers, flak-jacketed policemen, standing watching, or 
strolling by, apparently under orders not to react.
Women were well represented by Najma Hamid, a former MPA of Punjab, 
I am told.
Amongst those directing the mob within the court building was 
Senator Saifur Rahman, Nawaz's chief trouble-shooter and man for 
all affairs, and his chief-in-charge of ehtesab. It was very sad to 
spot him amongst the hooligans. I thought better of him. The night 
before, he was hurriedly sent for by provincial chief minister 
Shahbaz Sharif and he flew back with him from Lahore in the CM's 
special plane at 0300 hours that morning.
Sardar Naseem, an MPA of Lahore, was prominent, as was an associate 
of the well-known Khwaja Riaz Mahmood, a former deputy mayor of 
Lahore, famous for remarking that he cannot understand why two 
police constables were not simply sent to arrest the chief justice 
and get the whole thing over with quickly.
Other honourable Senators seen directing the rioters were Raja 
Aurangzeb, and a man recognized by some as Parvez Rashid. MNA Tariq 
Aziz did his active best. Former hockey star Akhtar Rasool, and 
Mian Abdul Sattar, both MPAs of Lahore, performed well. From 
Rawalpindi there was MPA Chaudhry Tanvir, a former vice-chairman of 
the Cantonment Board. You will see how the rowdies were guided in 
and, after forcing the court to adjourn, hurriedly ushered out. 
They were later accorded a celebratory feast at Punjab House.
The affairs of state will trundle on and soon Chief Justice of 
Pakistan (under restraint) Sajjad Ali Shah will be invited by the 
government to honour his constitutional obligation and swear in the 
new President, as required by Article 42. But, on you, for the 
present, rests the onerous responsibility of reconsecrating a badly 
desecrated and purposefully divided Supreme Court.

See also [Facism I] [Fascism III]

PIA employees are its strength
Omar Kureishi

PIA's audited accounts for 1996-97 show a loss of Rs.4,795 million, 
the highest loss the airline has ever suffered. The PIA management 
deserves credit for being honest. We have become so accustomed to 
fudged accounts and jugglery of figures that even this loss being 
shown by PIA is being questioned.
That the airline has been in deep money trouble for some years was 
an open secret in banking and financial circles. Within PIA itself 
there have been suspicions that the coffers were empty though this 
did not stop the various special-interest groups, in the guise of 
trade unionism, demanding more perks and privileges that added 
substantially to the overheads nor did the airline's management 
volunteer to lead from the front by pruning their own considerable 
pay-packets and allowances.
The PIA chairman has now vowed to restore operational and financial 
discipline and make the airline cost-competitive and more customer 
service oriented. The airline has many friends, though their 
numbers are beginning to dwindle, and these friends among whom I 
count myself, would like nothing better than to see this once proud 
and eminently successful organization being turned around. But it 
won't be by an expression of good intentions and by policy 
statements that smack of rhetoric.
The first thing that PIA needs to do is to appoint a task- force 
that will pinpoint the real, as against the popularly perceived 
reasons for its slide. It is true that PIA had been made a dumping 
ground for political appointees but how much did they contribute to 
its decline? It is said that these political appointees played hell 
with the discipline in the organization. How true is this? It is 
generally believed that the directors were not directing, the 
managers were not managing and the supervisors were not 
supervising. This suggests a management vacuum. If there was a 
discipline failure it was at this level.
The reasons for this unwillingness to exercise authority go back to 
the clamping of MRL 52 in August 1981, a martial law within a 
martial law. Numbers vary but it is estimated that 5000 employees 
were sacked, arbitrarily, without rhyme or reason, without a show-
cause, without legal or moral justification. This was not 
rightsizing or down-sizing. It was a purge, a heartless action. It 
cannot be described as surgery. It was butchery.
There wasn't even the fiction that the action was being taken in 
the best interest of the airline. It shattered the morale of the 
airline and broke its spirit. PIA never really recovered. No one 
was prepared to take decisions, to show any initiative. PIA lost 
some of its best employees and they must be wondering to this day, 
what they had done to deserve such a cruel fate.
It is not going to be easy to turn the airline around. There is no 
doubt that the ageing fleet has to be replaced and this is an 
immensely costly exercise. But the induction of a modern fleet will 
not in itself improve service-standards which are now well below 
those of other international carriers.
The airline business is one of the most fiercely competitive and 
the passenger has become demanding and cannot be taken for granted. 
He will not accept sloppy handling, he will not tolerate rude 
staff. When a passenger buys an airline ticket he does not 
surrender his self-respect. This is an area that PIA needs to 
strengthen for even if the aircraft are the most modern, it will 
still be the same staff that will be handling the passengers.
When an organisation's morale is low, its employees develop an 
attitude problem. This attitude problem shows up when a flight is 
delayed. That is when a passenger is most irritable and the most 
anxious. That's when an airline shows itself to be at its best or 
at its worst. I leave it to PIA's management to decide how it 
shapes up in this increasing eventuality! But the passenger is not 
the only one who has become a victim of PIA's bureaucracy which is 
lacking in compassion. Ask an employee who has retired or his 
services have been terminated about the private hell that he is put 
through when it comes to settling his accounts. Flimsy audit 
objections are raised, the worst kind of nitpicking becomes the 
reason for delaying the settlement.
This is a display of petty-mindedness, the exercise of power by 
babus and I have known very senior officers running from pillar to 
post and being treated as if they were supplicants with a begging 
bowl instead of those demanding what is rightfully owed to them. A 
number of them have approached me in the mistaken belief that I may 
have some influence. Damn it, you don't need to have influence to 
get what is yours by right. These are employees who gave the best 
years of their lives to their airline and they are owed both 
respect and dignity. This is not a case of victimizing any 
particular individual but seems to be the work of system monster 
who seems to be out of control, with a will of its own.
I have been saddened by PIA-bashing that has now become 
fashionable. I count myself among its well-wishers. But if PIA is 
to lift itself up, it will need to look inwards, at its own faults 
rather than put the blame on extraneous forces and factors. PIA 
will need to take tough decisions, make hard choices but its 
strength has always been its employees and they must not be allowed 
to get disheartened or demoralized or disgruntled.

The bottom line of it
Irfan Husain 

AFTER the early hope and hype following Nawaz Sharif's initiative 
to improve ties with India, the Indo-Pakistan peace process now 
lies frozen.
Although part of the reason for this return to square one lies in 
the Byzantine politics prevailing in both countries, the lukewarm 
response to the peace overture among politicians and the 
establishments in Islamabad and New Delhi was not very encouraging. 
Indeed, by and large, the media reaction was pretty unenthusiastic.
Basically, the same old chestnuts were pulled out on both sides of 
the border: the Indians insisted that any compromise on Kashmir 
threatened the integrity of the Indian Union, while our 
establishment perceived any shift from our traditional position as 
a retreat from our principled stand. There is some irony here, as 
we have trampled so many principles underfoot over the years that 
one more doesn't seem to matter very much.
While the hostile reaction from much of the right-wing media was 
fairly predictable, even normally clear-headed people displayed 
considerable unease at the prospect of peace with our neighbour. We 
have become so used to cross-border tension and confrontation that 
normal relations with India seem positively unnatural.
By now, two generations born in India and Pakistan have been 
brainwashed to hate each other, so it was refreshing to hear two 
young men � let me call them Ali and Omar � on the subject of Indo-
Pak relations the other evening. Very bright and articulate, they 
had both studied abroad and had just returned to embark on their 
respective careers.
Ali innocently expressed the opinion that fifty years of enmity 
between the two neighbours was quite enough, and they should sort 
out their differences and press ahead with solving their many 
problems. "Why should we all suffer because of this hang-up some 
people have over Kashmir?" One of the older people at the dinner 
table immediately cautioned Ali against trusting the Indians, and 
gave a brief history of their treachery. Young Omar then observed 
that when he was living abroad, he got along fine with Indian 
students. "In fact", he said, "I didn't feel they were any 
different: we'd go off and have kebabs, and speak in urdu, and it 
was easy to forget that we belonged to different countries."
Although my friends didn't concur, I defended the two young men, 
and advocated their views. The fact is that whether we like it or 
not � and the establishment certainly doesn't � Indians and 
Pakistanis have more in common than there are differences. We 
listen to the same music, whether it be classical or pop; we eat 
the same spicy food, even if orthodox Hindus avoid meat; we have 
very similar wedding ceremonies, although the actual religious 
rites obviously differ; and we have a similar joint family system. 
I could go on and on, but anybody who has been to both countries 
will readily testify to the deep cultural affinities that still 
exist. The fact that they do despite half a century of bitterness 
and division shows how deep the roots go.
I have written about the high cost of our Kashmir policy before, 
and will no doubt do so again. We have become hostage to an issue 
that has bled us white, and has completely warped our development. 
Moreover, as five decades of sterile and hopeless confrontation 
should have taught our leaders, our present policy offers no 
solution. The fact is that we cannot solve the problem by military 
means despite the untold billions our bankrupt nation has lavished 
on the armed services. Furthermore, we have exhausted whatever 
goodwill we enjoyed with our traditional friends and allies, and 
today stand more isolated than at any point in our history.
And looking at the credit column of the balance sheet, what have we 
gained? Precious little. Apart from giving Kashmiri freedom 
fighters false hope of open intervention, we have achieved nothing 
concrete despite two wars fought over the valley. The covert 
support going across the border has carried a high price tag in 
terms of probable Indian retaliation through subversive actions in 
By directing all our energies abroad in a futile search for 
diplomatic support, we have followed a one-point agenda that has 
bored the rest of the world stiff. We have to come to terms with 
the economic and geographic fact that for just about every country 
in the world, India matters much more than Pakistan does. Even our 
closest friends � and we don't have many � do not want to earn New 
Delhi's wrath for supporting Pakistan on the Kashmir question.
Our policy makers must wake up to the reality of the post-cold war 
world. We have no leverage worth the name in any major capital. For 
Washington, we are just another troublesome Third World country; if 
we are noticed at all, it is because of our nuclear pretensions. 
Every few months, we make world headlines for some crisis or other, 
or for yet another gruesome act of terrorism. It seems that no good 
news ever comes out of Pakistan.
While we cling to UN Security Council resolutions on Kashmir, the 
world has moved on. The sad fact is that despite all the fine talk 
about the international rule of law, the law of the jungle still 
operates out there, and might is still very much right.
Those who choose to ignore these harsh global realities have only 
to look at Iraq: here is a county that has been bombed and battered 
back into the middle ages for defiance of UN resolutions because it 
suited the world's only superpower to neutralize a threat to oil-
rich countries. However, Israel has ignored several demands from 
the UN to vacate occupied territory, but thirty years later, it is 
still in possession of large swathes of Palestinian land without 
facing any sanctions.

Wrong choice, Mr Prime Minister
M.P. Bhandara

EVERY now and then, Mr Nawaz Sharif displays the nimbleness of a 
rhino in a porcelain shop. Having just been saved by the skin of 
his teeth on the matter of the Supreme Court judges issue, a 
decision that was ultimately forced on him, he follows with the 
current choice of incumbent to the office of president. The 
decision appears inept to say the least.
I have nothing personal against Justice (retd) Senator Rafiq Tarar, 
a gentleman who is not known to me. I have no reason to disbelieve 
the press reports of his integrity, piety, learning and judicial 
But this is not the point at issue. Article 41(1) of the 
Constitution ordains "that the Head of State shall represent the 
unity of the Republic."
One wonders, how the unity of the republic is promoted if out of 
the top five jobs, ranking not necessarily in protocol terms but in 
terms of de facto importance, four are cornered by Punjab. The top 
five appointments in Pakistan, given the recent sad history of the 
decline and fall of Chief Justice's office, can be said to be the 
offices of the president, prime minister, Chairman of the Senate, 
Speaker of the National Assembly and Chief of Army Staff. My 
friend, Mr Soomro, is the only stranger in this crowd.
We Punjabis (the writer belongs to this amorphous category) tend to 
be thick-skinned and mindless about the sentiments, language, 
culture and hang-ups of our smaller ethnic groups. Our ignorance of 
our own people is astounding. Memories are short. For East 
Pakistanis, in times past, the bugbear was Punjabi chauvinism.
The Punjabi politician was regarded as 'unscrupulous', the 
bureaucrat 'a brown Englishman', the soldier 'culturally 
insensitive' and the businessman 'rapacious.' Ultimately, an anti-
Punjabi phobia consumed the minds of our Eastern brethren. 
The One Unit was regarded as a Punjabi scheme (which it was) to 
impose an artificial parity on the numerical East.
With hindsight, do we not see how pointless and meaningless the 
obsession was with 'parity'? In the last months of united Pakistan, 
Mujib refused to negotiate with any Punjabi leader, labelling him 
as the "oppressor class." It is another matter that he got his wish 
fulfilled in the person of Mr Z.A. Bhutto.
Coming to recent years and present times, many of our Sindhi and a 
few Baloch friends echo some of the very same sentiments about 
Punjab which in times past fell from Bengali lips. The Pathans have 
been shareholders in all the establishment set-ups. However, once 
you cross the Indus, you are deemed to be in the territory of 
The tide that was sweeping the intellectual portals for most of 
this century were the tides of liberalism, cultural unities and 
The breezes sweeping the world today are those of cultural 
nationalism and religious dogmatism. We ignore the signs of the age 
only at our peril.
Extending this line of thinking somewhat unjustifiably, it may be 
possible to read in the recently failed judicial coup d'etat, a 
Baloch tumundar joining hands with a Sindhi Syed to give a Punjabi-
Kashmiri prime minister a run for his money. 
Both the former eminences saw a dull future. History, according to 
Karl Marx, enacts itself first as tragedy and repeats as farce. The 
exhumation of General Ziaul Haq's Article 58(2)(b) by the Chief 
Justice of Pakistan (now under restraint), one presumes, is the 
General Ziaul Haq's long-term solution to problems arising from 
cultural nationalism was to wave the magic wand of religion. 
Provided a society can be made truly Islamic, it was argued by him 
and others that the angularities arising from cultural nationalism 
could be obscured. The Quaid, too, was keenly aware of the problems 
arising from sub-nationalisms. It appears to me that the solution 
he had in mind was a sort of 'Islamic secularism.' I refer to the 
famous speech of the Quaid of August 11, 1947. 
Today, we have before us models of both types of Islamic societies 
ranging from a Taleban government in Kabul to Islamic Iran and 
Saudi Arabia and at the other end of the spectrum, 'Islamic 
secularism' as practised in Malaysia, Dubai and the other Trucial 
How are these matters relevant to the present selection of the 
president? No matter in which direction we evolve, cultural 
nationalism is bound to play a larger role in our polity in the 
years to come. This means respecting all traditions that promote 
and honour ethnic and cultural diversity. We have to make 
compromises and accommodations with these groups, if the federation 
is to survive.
There has been a long tradition in Pakistan which avoids the 
possibility of the president and prime minister belonging to the 
same province. One wonders, why this good tradition was broken? 
What other linkages are likely to be fractured as a result?
A further question arises as to what sort of a president do we 
need? Let us start on the premise that in keeping with concept of 
Article 41(1), our president should have little power but immense 
This implies that the personality of the president should be one 
having an international appeal: a person with the intellectual 
power to converse on equal and intelligent terms with, say, a Lee 
Kuan Yew on international economic evolution, with a Henry 
Kissinger on the drift of world political concepts, with a Nobel 
prize winner like Naguib Mahfouz on the renaissance of the novel in 
the Arabic language. A president who would not look bewildered or 
befogged if required to discuss DNA or black holes.
Lee Kuan Yew, on return home from his last visit to Pakistan, was 
asked by a journalist what advice he could give to Pakistan. He 
replied, "Sorry, none, I cannot pretend to advise people who 
believe that life begins after death."
Lee Kuan Yew also presents another image for Pakistan. On 
retirement as prime minister, every office in Singapore and 
international high office was available to him. 
He chose the office of senior minister, Singapore � a job without 
any power whatever. And that is precisely the point. A president 
having the necessary intellectual equipment is in need of no legal 
The moral power of a towering personality without political 
affiliations and in keeping with constitutional conventions in this 
regard appear to be the requirement for the office of president. 
What we appear to have is someone who would make a brotherly Arab 
ruler blush at his own lack of doctrinal legalities.
Our Arab brothers would prefer to discuss the next houbara bustard 
shoot � something that brings them to our shores in much happiness.
One could really wish that more sagacity were available to the 
prime minister in the taking of important decisions. As in the 
judges' elevation case, an issue has been made out of a non- issue.

Prospects after the crisis
M.B. Naqvi

PRESIDENT Farooq Ahmed Leghari resigned on December 2. It was the 
denouement of a 10-week long crisis. The tension and the suspense 
suddenly subsided. It is time to take stock of the national 
situation to see who gained what and who lost.
One obvious fact to emerge is the pre-eminence of Prime Minister 
Mian Nawaz Sharif. His rivals, detractors and opponents have been 
worsted. The office of the prime minister stands much strengthened. 
That of the president has suffered a setback, having suffered a 
decline in importance. No future President will easily dare to harm 
or hurt the PM, central government and National Assembly or take 
them for a ride. But what of the famous troika: the tripod of power 
comprising the president, prime minister and army chief?
As noted, the office of the president has taken a devastating 
knock. Even the office of the army chief has now to be somewhat 
more subdued and less important in day-to-day decision-making even 
on sensitive issues. No one can believe that its basic importance 
has disappeared; all politicians, president and PM included, have 
demonstrated that army continues to be the power of the ultimate 
resort. But the kind of decisiveness it had before has given way to 
its being one among many, though very prominent among them. This is 
a subject on which the opinions among the analysts and commentators 
There are two schools of opinion. One holds that during the crisis 
every single player � the president, prime minister and the chief 
justice � eagerly sought the help of the army chief and was all 
ears to hear his advice. They have concluded that for the future 
also the absolute centrality of the army in the national life has 
been demonstrated. Its voice will thus remain the decisive 
political factor in the country. But there is another school which 
says the opposite, although quickly conceding that no one can make 
the mistake of downgrading the importance of the army; it will 
remain one of the major factors in the national life. But its 
central importance is no longer an outstanding reality. Both the 
army high command and common people have seen the limits of the 
army's power. The fact that it did not succeed in its mediation for 
several weeks and that the final denouement came only after it was 
demonstrated to the satisfaction of all that the army cannot and 
will not involve itself in the working of political institutions by 
siding with anyone among the feuding three � president, PM and CJP 
� that the president had no option but to resign from his already 
exposed position. It was the failure of the army to sustain the 
president's position � the presidents have always depended on the 
army for their actions against the government � that President 
Leghari called it a day. The fact that the army decided not to 
involve itself in politics can be interpreted in two ways.
One is to praise the present leadership: they are so democratic and 
civilian-minded that they couldn't think of doing such a horrid 
thing. The second interpretation is that they simply could not 
intervene for fear of a division within their own ranks. The army's 
involving itself in politics, at this stage, would have meant 
taking sides. Which would have made the army controversial and 
opinion within the forces would have strongly differed. That threat 
was all too real as numerous press stories had mentioned it. 
Therefore the fact that the army chief did not participate in 
political matters by siding with the president or anyone else and 
that he in fact refused to bail out the president and the CJP 
bespeaks the fear that the leadership had of the consequences of 
upholding any of them. Moreover, Mr. Nawaz Sharif was no pushover 
like Benazir Bhutto was. It could legitimately be foreseen and 
feared that there would be a backlash in Punjab and the situation 
may not be easily controllable even by the army. And of course, 
there was the danger of the army being divided within itself. In 
fact the limits to army's political power have become visible even 
to ordinary citizens. That can only mean a reduction in its 
political role in the future.
Before going on to consider the impact of the office of the prime 
minister having become strengthened and or as PM Sharif puts it, 
the role of the Parliament having become stronger, it is necessary 
to give one look at the heavy price that has been paid. Victory of 
the Parliament and the PM has been at the expense of the Supreme 
Court of Pakistan and indeed superior judiciary as such. The SC 
judges have not helped their image and prestige by becoming 
controversial. It was a pathetic spectacle to see two Supreme Court 
benches suspend the chief justice of their own court while the 
chief justice retaliated by recommending disciplinary action 
against all four of five judges involved. Repeatedly, one order by 
one bench was overturned by another. Then political workers invaded 
the Supreme Court several times and abused the judges and indulging 
in violence. This was been the darkest hour for the judiciary in 
the country. Gone were the days when it was universally respected 
as the cleanest and the most upright institution. Both sets of 
judges have been accused by their detractors of being motivated by 
personal and other extraneous considerations in their mutual 
bickering and tussle.
The price paid by the superior judiciary is certainly very high. 
But the opinion-making classes are unanimous in accepting the 
doctrine of judiciary's independence and its right to interpret all 
laws and the Constitution. Whatever view may be held of the conduct 
of the judges in the recent crisis, two points can be made. One 
that the new chief justice, Mr. Justice Ajmal Mian, is a man of 
unimpeachable integrity and judicial temperament. His 
pronouncements and conduct during the crisis and after it have 
remained without any blemish. He refused to sit in any bench that 
questioned Justice Sajjad Ali Shah's right to remain chief justice 
on the ground that having been the senior- most judge throughout, 
he could be said to have a personal interest in the matter.
Immediately on being appointed acting CJP, he asked all SC judges 
to stay quiet and speak only through their judgments or only in the 
court; all conversations with the press are to be frowned upon. He 
himself has been very consistent in the regard. If anyone can 
rebuild the prestige of the judiciary, he is the man for it.
Secondly, an independent, impartial and high-calibre judiciary is 
the dire need of the country. Everyone is conscious of this and 
wants to revere the superior judiciary � so long as superior courts 
and the Bar will not let the people down by their own conduct. Ups 
and downs in politics would provide ample occasion to the superior 
judiciary to repair the damage that has been done to its name and 
prestige. It may be difficult but it can be done. Many will hope 
that this would happen.
A very large number of people in the opinion-making classes and 
within the bureaucracy have been apprehensive about Mr. Nawaz 
Sharif. He has an intense power drive. He tends to be regal in 
style and imitates Zulfikar Ali Bhutto of yore. His instincts too 
are said to be authoritarian.
He has already knocked out the president as a significant political 
actor and he has brought the Parliament virtually under his thumb 
through a constitutional amendment that, in the name of fighting 
'lotaism' and defection tendency, has reduced MPs virtually to the 
status of serfs and minions of party leaders; they dare not indulge 
in criticism of their own party leaders, much less vote against the 
party whip, which they can do on pain of losing the membership of 
the house.
The net effect of the measure is to make the Parliament a rubber 
stamp for Mian Sahib because he has two-thirds majority in it and 
has demonstrated that he can carry through any constitutional 
amendment within minutes. Will he keep Parliament and everyone else 
subservient to the whims of the government?
Both for the sake of argument and as a likelihood, it is for the 
Parliament, in the first place, and common citizens in the next, to 
keep Mr. Nawaz Sharif on the straight and narrow path of political 
rectitude and democratic proprieties. Name of the game in politics 
from now would be to raise the level of vigil against any abuses of 
the fundamental rights of citizens by the government. Political 
activism by human rights workers is to be increased and 
intensified. The press, Heavens be praised, is already free and 
does not face an imminent threat even from a much strengthened 
Prime minister. It has a lot of work to do to ensure that human 
rights of the weaker sections of society are not trampled upon by 
an overbearing executive.
The bureaucracy in this country is both corrupt and inefficient. 
Lower officials also tend to act as tyrants, insofar as weaker 
sections of society are concerned. Constant vigil by professional 
organizations and others in the press, universities, trade unions, 
bar associations and other organs of state is essential. Let the 
people remain on guard. Democracy is all about the autonomy of all 
such institutions and individuals. It is for the citizens to ensure 
that democracy is available to them and stays with, and for, them. 
But the change in the power status of the prime minister and by 
inference in the Parliament and government is to be welcomed in a 
general sort of way. It will lead towards a more streamlined 
administration and political decision-making. The role and clout of 
extra-constitutional centres of power will diminish and one hopes 
will one day vanish. Even this diminishing is to be welcomed. One 
has already considered the general checks and balances relating to 
the power of the PM, the government and the Parliament should be 
provided by society itself; and as for the government and the PM, 
the Parliament has to bestir itself and bring forth its 
No doubt, the image of the MPs in the country is mud, certainly 
about their calibre and competence. But this is the only human 
material we have. The country has to depend on these MPs for 
keeping the government under control and, of course, they should be 
reinforced and supported by the common citizenry and the thousands 
of small professional associations. But what of the possible 
authoritarianism of the PM? The decision-making within the 
governing processes should be unified and streamlined. The buck 
should stop at one definite place. And that has now been 
facilitated: it is the prime minister's office whose word will be 
the final one rather than of the troika's. Let the PM make all the 
sensitive and major decisions while not suppressing any dissent or 
criticism no matter where it comes from. The whole society would be 
hopefully on guard against any transgressions by the PM, the 
government and the executive in general. This is inevitable. The 
problem will remain. The solution is unending vigilance by all of 
The country is facing extremely difficult problems in the economy, 
in the political sphere and even in foreign affairs. Strengthening 
of the government's decision-making process is the need of the 
hour. In a sense, a division of the ultimate authority into three 
or four centres of power was a prescription for inefficiency, 
delays, wrong compromises and bad execution. It is hoped that a 
strengthened executive (in being more linear) would serve the 
country better. The government as a whole is required to devote its 
attention undividedly to making the economy come out of the trough 
of despondency in which it has fallen.

Anwar's knock helps Pakistan beat India
Tanvir Ahmed

SHARJAH (UAE), Dec 14: A sparkling century by Saeed Anwar 
spearheaded Pakistan to a four-wicket win over India.
Anwar struck an exquisite 104, his 14th century and seventh in the 
desert Emirate, as Pakistan achieved the victory target of 240 with 
16 balls to spare. The victory also helped Pakistan keep their 
chances alive for a final berth along side England who are already 
through with an unbeaten record from two matches. To confirm a 
place in the final, Pakistan needs to beat England.
Anwar's 104 came off 124 balls and included seven boundaries and a 
six. He was the last Pakistan wicket to fall when the target was 
reduced to just 14 runs from 22 balls.
Pakistan had its ups and downs while chasing India's 239 for seven. 
After Rajesh Chauhan brought off a scintillating caught and bowled 
to dismiss pinch-hitter Shahid Afridi at 48, Pakistan were reduced 
to 102 for four with only one recognised batsman, Inzamamul Haq, 
waiting in the dressing room.
Inzamam showed a lot of guts to play the match by taking four pain-
killing injections but still was weak and lacked complete fitness. 
He tried his best but could last briefly and when he was dismissed, 
Pakistan were in serious danger of missing the bus as they were 144 
for five. But Anwar was joined by ever-reliable Moin Khan who made 
the scoreboard moving with ones and twos. And when Anwar's 
brilliant innings ended, Pakistan victory was just round the 
Moin remained unconquered on 49 off 50 balls with two fours and a 
six but most importantly shared in a 82-run sixth wicket stand with 

Haroon defends Akram's captaincy in Sharjah
Sports Reporter

KARACHI, Dec 19: Pakistan cricket manager Haroon Rasheed came for 
the rescue of Wasim Akram when he said all criticism against the 
captain was unjustified.
"No captain or coach likes to lose. But one-day cricket is a 
different ball game and anything can happen. We should now learn to 
digest defeats instead of holding the skipper by the scruff of his 
neck," Haroon said.
"Akram tried everything but none of the plans worked out."
Akram is the target of the critics who argue that bad captaincy led 
to Pakistan's elimination in the league matches.

England clinch Champions Trophy
Tanvir Ahmed

SHARJAH, Dec 19: In a blitzkrieg 70-run seventh wicket partnership 
between Graham Thorpe and Matthew Fleming guided England to a 
three-wicket win over the West Indies in the final of the Champions 
Trophy here Friday evening.
Thorpe and Fleming cut loose when England were struggling at 165 
for six after having lost Adam Hollioake and Mark Ealham in a space 
of 13 runs. The situation at this point far from rosy, England 
needing to score 71 runs from nine over and three balls.
The two England batsmen blasted the West Indies bowlers, Rawl Lewis 
and Phil Simmons in particular. The onslaught was so severe that in 
panic Simmons bowled four no balls in his last over conceding 13 
Thorpe returned unbeaten with 66 from 74 balls with included five 
boundaries. Fleming was run out on the last ball of the 46th over 
when the scores were tied at 235 after a breezy knock of 34 from 27 
England started badly, losing Alister Brown at 14. Alec Stewart and 
Nick Knight added 75 very useful runs for the second wicket but the 
run-rate at this stage was slightly behind the target.
The West Indies received 25,000 dollars.

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