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DAWN WIRE SERVICE
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Week Ending :  20 December 1997                       Issue : 03/51
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Contents | National News | Business & Economy | Editorials & Features | Sports
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CONTENTS
===================================================================
NATIONAL NEWS
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

---------------------------------
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 =================================================================== DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS =================================================================== NATIONAL NEWS =================================================================== 971217 ------------------------------------------------------------------- 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. DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS 971214 ------------------------------------------------------------------- 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 committee. 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. DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS 971217 ------------------------------------------------------------------- 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. DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS 971217 ------------------------------------------------------------------- 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. DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS 971218 ------------------------------------------------------------------- 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 Wednesday. 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. DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS 971218 ------------------------------------------------------------------- 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 said. "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. DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS 971219 ------------------------------------------------------------------- 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 MNA. 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. DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS 971220 ------------------------------------------------------------------- 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 anthropologist. "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 Friday. 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".  =================================================================== BUSINESS & ECONOMY 971215 ------------------------------------------------------------------- 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 decision. 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 than70
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 Head 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) DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS 971216 ------------------------------------------------------------------- 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 MCB. 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. DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS 971215 ------------------------------------------------------------------- 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. DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS 971215 ------------------------------------------------------------------- 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. DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS 971214 ------------------------------------------------------------------- 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
taken.

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
Limited.

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971217
-------------------------------------------------------------------
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
Incorporation.

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.

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.'

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971219
-------------------------------------------------------------------
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. DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS 971219 ------------------------------------------------------------------- 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 Wednesday. 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 Pakistan. 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. DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS 971220 ------------------------------------------------------------------- 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 selling. "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. ------------------------------------------------------------------- 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. Annual Subscription Rates : Latin America & Caribbean US$ 93    Rs. 2,700
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Back to the top.
===================================================================
EDITORIALS & FEATURES
971214
-------------------------------------------------------------------
Fascdism on the march � II
-------------------------------------------------------------------
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
embarrassment.

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

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
Trust.

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.

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971215
-------------------------------------------------------------------
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
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.

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971220
-------------------------------------------------------------------
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
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
Pakistan.

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.

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971220
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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
experience.

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
Pukhtoonkhwa.

The tide that was sweeping the intellectual portals for most of
this century were the tides of liberalism, cultural unities and
cosmopolitanism.

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
farce.

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
States.

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
prestige.

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
power.

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.

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971215
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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
differ.

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
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
potentialities.

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
us.

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.



===================================================================
SPORTS
971215
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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
corner.

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
Anwar.

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971220
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Haroon defends Akram's captaincy in Sharjah
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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.

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971220
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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
runs.

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
balls.

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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