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DAWN WIRE SERVICE
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Week Ending : 05 December 1998 Issue : 04/48
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Contents | National News | Business & Economy | Editorials & Features | Sports
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CONTENTS
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NATIONAL NEWS
+ Paris Club aid put on hold
+ IMF action pushes down reserves to $450m
+ CTBT & other issues: US tells Pakistan to take solid steps
+ Nawaz links signing of test ban treaty to Kashmir issue solution
+ Three military courts start work today (05 Dec'98)
+ Pakistan expresses concern at Indian military exercises
+ Ordinance promulgated: Sales tax rate raised to 15pc
+ New Zealand confirms it will lease 28 F-16s
+ Railways reorganized to eliminate deficit
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BUSINESS & ECONOMY
+ Pakistan's credit rating further downgraded
+ Govt borrows Rs 6.36bn from banks
+ Recovery of Rs9bn: Ittefaq group executive quizzed
+ $350,000 paid in advance to PTCL adviser
+ Security for loans: SBP extends liquidation date of FCY deposits
+ 'More incentives needed to boost gold exports'
+ Freight issue: No early end to exporters' woes
+ Cement makers decline to bring prices down
+ Business facing problems on export proceeds
+ Stocks lose 63 points, break barrier of 1,000
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EDITORIALS & FEATURES
+ The city of Karachi Ardeshir Cowasjee
+ Snatching back our rights Irfan Husain
+ Beyond the bailout Sultan Ahmed
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SPORTS
+ Amjad Khan rises to No.15 in world squash ranking
+ Sohail faces the axe: Captain for Indian tour on council's agenda
+ Zimbabwe register maiden 7-wicket win against Pakistan
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NATIONAL NEWS
981205
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Paris Club aid put on hold
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M. Ziauddin
ISLAMABAD, Dec 4: Pending a final decision by the Paris Club all
repayment obligations of Pakis-tan with respect to bilateral
official development assistance (ODA) will come to a standstill
from Dec 10, 1998, the day the Club starts hearing Islamabad's case
for debt rescheduling.
This freeze will not apply to repayment obligations concerning
multilateral assistance and private loans.
Official sources did not like to hazard a guess as to the exact
amount of repayment that would remain frozen pending a final
decision by the Paris Club or to the period it would take the Club
to reach a decision.
Some of the finance ministry officials were not even sure if the
Paris Club meeting would actually start on Dec 10.
One source believed that the size of the amount would not be more
than $600 million and that it would take about three months for the
Club to give its verdict.
Others said that the total amount of repayment that would remain
frozen was over $1 billion but it would take as long as eight
months for reaching a decision by the Paris Club.
While the negotiations with the Paris Club are going on, the IMF
would monitor very closely the performance criteria and the
structural reform targets fixed in the Policy Framework Paper (PFP)
signed between Pakistan and the Fund in November. Any digression or
slippage would mean automatic curtailment of the Paris Club
negotiations.
Very few here have any idea about the complexities of negotiating
with the Paris Club for rescheduling.
However, officials said that the Club would expect Pakistan to
submit a paper at least before the start of the negotiations on Dec
10 detailing what kind of loan repayments did the government want
rescheduled, in what way, how Pakistan planned to meet the
rescheduled obligations and when.
After all these modalities are worked out and agreed upon by the
Club members by consensus, the Pakistani team will then negotiate
with each bilateral donor separately within the parameters agreed
with the Club.
An IMF team, especially trained in these matters, is expected to
assist the Pakistani team in these negotiations.
Pakistan is also looking around for a consultant of international
repute with enough experience of negotiations for rescheduling of
various kinds of debts.
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981205
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IMF action pushes down reserves to $450m
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Ihtasham ul Haque
ISLAMABAD, Dec 4: Pakistan's foreign exchange reserves have gone
down to $450 million, making the job of the planners almost
impossible to avoid default specially after the IMF's executive
board postponed its scheduled meeting on Dec 15.
Informed sources told Dawn here on Friday that the government's
hopes to meet its pressing foreign debt liabilities in December
were dashed when the executive board of the Fund unexpectedly
decided to postpone its meeting till January and that, too, without
indicating any date.
Senior officials of the ministry of finance remained busy
throughout the day on Friday discussing how to meet the debt
liabilities and improve the precarious balance-of-payments
position.
Since the finance minister was accompanying the prime minister on
his tour to the United States, finance secretaryJaved Khalid and
the special secretary for finance held a meeting and discussed the
situation arising out of the negative signals from Washington. They
both have been avoiding telephone calls from the reporters.
The sources said the government was planning to borrow $250 million
to $300 million from the overseas branches of the nationalized
commercial banks for 15 to 20 days to avoid default. "We have on
our disposal a grace period of about eight to 10 days to make
payments on our foreign loans," said a source.
"The government will delay all loan payments other than those of
the IMF, World Bank and the Asian Development Bank to try to escape
this default", he added. "Now we will have to resort to the
accountant's tricks to escape this imminent default," he remarked.
Pakistan is to make a payment of about one billion dollars in
December and it was expecting to have 500 million dollars from the
IMF after its executive board met on Dec 15 and approved the
agreement.
The sources said it had come as a great shock to the planners who
had earlier assured the prime minister that they would pull through
during the current financial year even against heavy odds.
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981204
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CTBT & other issues: US tells Pakistan to take solid steps
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Shaheen Sehbai
WASHINGTON, Dec 3: The US bluntly stated on Wednesday that Pakistan
would have to help itself and "take concrete additional steps"
before Washington could remove any further sanctions as summit
talks between President Clinton and Prime Minister Nawaz Sharif at
the White House appeared to have made no headway on key issues.
A terse, down-to-earth and at times almost rude briefing by two
senior US officials, made it clear that the two sides were
deadlocked on who should now make the next move on crucial issues
like non-proliferation, CTBT, FMCT and Osama ben Laden, and the
ball was in Pakistan's court for all practical purposes.
The tone and tenor of the White House briefing, which came after
several hours and repeated delays with correspondents waiting
almost for four hours, was harsh and authoritative. It was in sharp
contrast to Shamshad Ahmed Khan's briefing earlier in which he had
nothing concrete to say except repeatedly stressing that a "better
understanding" of each other's point of view had been achieved.
In the diplomatic jargon, a better understanding of the other
side's point of view means that each side had spoken out its case
and there was no agreement on how to proceed further as neither
side appeared to "accept" the other's point of view although they
understood it clearly.
Although Bruce Riedel began his briefing with saying that the PM-
President meeting was "very warm, very positive". The comments he
and Inderfurth made later indicated that the Pakistanis were not
very happy with what they were being bluntly told to do, in simple,
loud and clear terms.
Inderfurth stated that the US was unable to help Pakistan unless
they helped themselves and took additional and concrete steps which
were needed before the US could make any further move to remove
more sanctions.
"The President reaffirmed our view in his talks with Nawaz Sharif
that more progress was needed to be made on these issues before we
would be in a position to remove all of the sanctions," senior
National Security Director Bruce Riedel said at the White House
briefing.
Asked about Pakistan's national security dilemma as a result of
prolonged American sanctions and depleted conventional weapons and
how was the US expected to help it resolve the dilemma, Inderfurth
made the terse statement: "We can't help it unless it helps itself.
The fact is that the President was able to exercise limited waiver
authority under the Brownback Amendment on economic issues.
Brownback does not cover military-to-military relations. For us to
have any opportunity to address the conventional military needs of
Pakistan, it will have to take further steps to address our
concerns on non-proliferation, which would provide us the arguments
needed to go up to Capitol Hill to seek further either repeal of
sanctions or amendment of Brownback law to allow some form of
military cooperation."
"The conventional military sales, transfers of equipment, all that
will require further steps by Pakistan to allow us to resume that
kind of relationship."
Asked about specific steps that the US wanted Pakistan to take,
like the signing of the CTBT, or the rollback of their nuclear
programme, Inderfurth referred the questioner to the five-point
charter given by Strobe Talbott which listed signing and
ratification of the CTBT at number one, followed by a unilateral
moratorium on fissile material production.
Karl Inderfurth added further that Mr. Sharif had been clearly told
that "the nature of the President's decision (to lift some
sanctions) was limited and confined to the IMF package... That this
is limited, that we need to be able to make further progress to
provide further assistance. That will require additional steps,
concrete steps, by Pakistan to address non-proliferation and
security concerns of the US."
CTBT: On CTBT, Bruce Riedel's remarks were frank. "Both leaders
reviewed the status of the Pakistan-US talks (on non-
proliferation), underscored the importance of trying to come to
closure on them. I would not say that major new developments
occurred there. This was more a status-taking and discussing where
Secretary Talbott and the Foreign Secretary had already brought
it."
"The prime minister reaffirmed the commitment that he made first at
the UN General Assembly and when he met with the President in New
York. The president reaffirmed our view that more progress was
needed to be made on these issues before we would be in a position
to remove all of the sanctions under the Glenn Amendment. The Prime
Minister and the President reviewed the status of those sanctions."
OSAMA BIN LADEN: Inderfurth's remarks on Osama ben Laden were even
more candid and direct: "In our view about bin Laden, it is very
simple, he is a terrorist, he is a murderer, he plans to kill again
and we want him brought to justice. And that view was made very
clear to our Pakistani guests...The means to accomplish that are
several in terms of working with other governments...Pakistan is
well aware of our views on this.
"Pakistan is well aware of the impact of Osama bin Laden in the
region, and we have asked Pakistan for its assistance and I think
that message came through loud and clear to Prime Minister Sharif.
We do not want to speak for him, or what his government intends to
do. That is a decision they have to take. But they have heard our
views loud and clear."
This statement was in clear conflict with what foreign secretary
Shamshad Ahmed Khan said earlier when he denied that any discussion
had taken place on Osama bin Laden as according to him, "this was
not a Pakistan's problem."
Inderfurth said Secretary Albright had told Prime Minister Sharif
that the US had very serious problems with the Taliban, including
their treatment of women and girls. "All made it clear that of
primary importance to the US government is the expulsion of Osama
bin Laden from Afghanistan so that he can be brought to justice.
"While I don't intend to go into details of what was said about bin
Laden in the meeting, I think it's fair to say that there was no
love lost, nor any sympathies expressed for him (bin Laden) in that
meeting," he said.
KASHMIR: On Kashmir the White House officials made it clear that
there was no change in the US policy of not accepting any mediatory
role until the Indians agreed to it, despite Mr. Sharif's repeated
pleadings that bilateral talks with India had failed and were not
going anywhere.
Riedel said that before the meeting, "The President made it very
clear that the US was prepared to do all it can to help, but that
it is only able to do things in any kind of mediation process if
both parties want the US to be a player in this. The President
reaffirmed that, and he indicated that it would need to be made a
request from both parties for the US to play a mediation role."
F-16S ISSUE: The F-16s issue is the only matter on which some
progress appears to have been made but there were conflicting
figures being floated around by the Pakistanis and the US side as
details of the US-New Zealand agreement became known.
Inderfurth confirmed that the US had proposed some ideas to settle
the matter before Pakistan actually filed a case to recover the
money.
While Pakistan Ambassador Riaz Ahmed Khokhar stated on Tuesday that
Islamabad had received $235 million from the US, Inderfurth gave
the figure of $157 that had been paid to Islamabad while the
balance remained $501 million.
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981204
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Nawaz links signing of test ban treaty to Kashmir issue solution
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Shaheen Sehbai
WASHINGTON, Dec 3: Prime Minister Nawaz Sharif declared on Thursday
that Pakistan would not sign the Comprehensive Test Ban Treaty
(CTBT) unless all sanctions were removed, the Kashmir issue was
meaningfully addressed, and all embargoes lifted.
Speaking at the National Press Club in Washington, Mr Sharif said
no sanctions could force Pakistan to renounce its nuclear
capability.
It was for the first time that Pakistan had linked the resolution
of the Kashmir issue to the signing of the CTBT in what appeared to
be an apparent attempt to resist the US pressure to show "concrete
progress" on the nuclear non-proliferation issue.
Analysts said Pakistan was facing an uneasy situation after the
blunt US statement on Wednesday that the ball was in Pakistan's
court as Washington had fulfilled all its commitment and now
Pakistan had to show additional progress.
The prime minister spoke to a crowded audience packed in a small
room filled with TV cameras as a handful of Muttahida Qaumi
Movement supporters walked outside the building on the footpath,
carrying banners and pictures of Altaf Hussain. Shahbaz Sharif
waved to the protesters when he left the Press Club building and
waved the "V" sign to them.
Mr Sharif was asked a number of pointed questions about Pakistan's
support to the Taliban government and Osama bin Laden but he
parried most of them saying that Pakistan had cooperated with the
US on issues of terrorism in the past and would continue to do so
in future.
"We discussed the extradition of Osama bin Laden with the US
leaders," Mr Sharif said when asked specifically whether President
Clinton had asked him to deliver the Saudi millionaire to the US
authorities.
Asked whether Pakistan would impose the Taliban-type justice, cut
hands of thieves, etc, Mr Sharif said Pakistan was a modern,
progressive and liberal state.
On the CTBT, he said Pakistan supported the treaty but it would not
sign it under the atmosphere of coercion.
The prime minister was asked about the situation of the press in
Pakistan and attempts by the government to muzzle it by taking
administrative steps against major newspaper groups.
He said he had an impeccable record on maintaining the press
freedom and if any newspaper had received tax notices, the
department of tax must be asked about it.
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981205
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Three military courts start work today
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Sarfaraz Ahmed
KARACHI, Dec 4: Three military courts begin functioning in Malir
Cantonment on Saturday, with the trial of seven people allegedly
involved in different cases.
According to police sources, the cases pertain to abduction, rape
and murder, and all the seven to be produced in the military courts
had been arrested after the imposition of governor's rule on the
province.
Two of these cases, according to the sources, are against the
alleged activists of the Muttahida Qaumi Movement and Mohajir Qaumi
Movement.
According to a senior police official, all the seven accused had
been served with charge-sheets 24 hours before their production
before the military courts.
In the rape case, a girl, who was going to a tuition centre from
her house in Sharifabad police station area, was allegedly abducted
and sexually assaulted by five people belonging to the Muttahida
Qaumi Movement, in December last year. Two of the accused have been
arrested.
Another case pertains to killing of a police constable, Mohammed
Siddiqui, in May this year in the limits of Chakiwara police
station. Three of the accused have so far been arrested.
Yet another case pertains to the murder of an assistant sub-
inspector, a head constable and a constable in the jurisdiction of
Ibrahim Haidery police station in June this year. Three people,
allegedly belonging to the Mohajir Qaumi Movement, were involved in
the killings. Two of them were arrested.
The Inter Services Public Relations announced on Friday that
military courts would start functioning in Malir Cantonment on
Saturday.
According to it, the army has evolved an elaborate system to
administer justice.
For smooth functioning of the courts, the ISPR said, prosecution
and trial wings had been set up under experienced senior officers,
and that all cases would be received by the prosecution wing, which
would ensure that cases were complete in all respects.
The ISPR said the best officers whose character and integrity were
beyond reproach, had been made available for the courts. Each court
would be presided over by a lieutenat colonel, who would have two
more officers of the rank of major, as members.
During trial, the accused would be afforded full opportunity to
defend themselves and they would be allowed to hire any defence
counsel of their choice.
"The accused, if convicted, will be allowed to file an appeal. The
appellate court will be presided over by a major-general," the ISPR
said. To begin with, three courts had been established and cases of
heinous nature, such as kidnapping, gang rape and murder had been
referred to the courts.
It may be mentioned that the three courts will try cases from
amongst the 19 finalised by the government for trial.
The sources said each case would be decided in three days, as
stipulated in the "Pakistan Armed Forces (Acting in aid of the
civil power) Ordinance, and three days would be allowed for appeal.
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981205
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Pakistan expresses concern at Indian military exercises
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ISLAMABAD, Dec 4: Pakistan, reiterating its concern at the massive
Indian military exercise across the border, said here on Friday,
that "such aggressive posturing" can only vitiate the atmosphere
between the two countries.
"The Indian military exercise comes at a time when the two
countries are engaged in bilateral dialogue," Foreign Office
spokesman said here on Friday.
"The exercise sends a negative signal and bodes ill for the
promotion of an atmosphere of peace, security, confidence and trust
in the whole of South Asia," he said.
He said, according to reports, Prithvi missiles were a part of the
sophisticated weaponry which was integrated in the exercise.
The FO spokesman said the flexing of military muscles is,
"pointless," as Pakistan is fully capable of its defence and
territorial integrity.
The exercise comes on the heels of a joint manoeuvre by Indian
army, navy and airforce held on November 17 on the western coast.
On Thursday China also expressed concern about the exercises. An
Indian army spokesman said on Wednesday the exercises had peaked on
November 27 and would end on Sunday.
In 1987 first India and then Pakistan carried out large-scale
military manoeuvres close to their border, raising the spectre of a
fourth war between them.-APP/dpa/Reuters
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981202
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Ordinance promulgated: Sales tax rate raised to 15pc
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Ikram Hoti
ISLAMABAD, Dec 1: The federal government has raised the rate of
Sales Tax from 12.5 per cent to 15 per cent with effect from
December 1, 1998.
An ordinance, to be called Sales Tax (Second Amendment Ordinance,
1998,) promulgated by the President here on Tuesday, stated that
the Sales Tax assessees shall pay the tax at 15 per cent from the
assessment month of December, 1998.
Through the ordinance, the government has also armed itself with
the powers to further amend the already issued notifications in
this connection, or modify them for doing away with exemptions
given to the Sales Tax assesees.
The new rate has also been made applicable to the fixed tax
assessees who would continue to pay Sales Tax at the standard rate
which, at present, is 15 per cent.
The fixed sales tax system, it may be recalled, was abolished from
the current financial year, but some of the assessees, who had been
given that facility, were still engaged in discussions with the
government for its resumption.
APP adds: The upward revision in sales tax by 2.5 per cent will
enable the Central Board of Revenue (CBR) to fetch over Rs6.5
billion in the rest of seven months (December-June) of the current
fiscal, 1998-99.
The government agreed to enhance the rate of sales tax from 12.5
per cent to 15 per cent during the talks recently held with the IMF
mission to reach an agreement on a bailout package of $5.5 billion.
The enhancement in the ST rate, sources at the CBR said, would
provide cushion against the shortfall in revenue mainly owing to
less collection under customs duty.
The sales tax has been increased from 12.5 per cent to 15 per cent
in case of registered traders. However the ordinance is silent
regarding the unregistered traders who had to pay 13.5 per cent
sales tax and it is not clear whether 15 per cent sale tax is flat
or not for both categories.
The enhancement of sales tax is expected to improve the projected
ST collection from Rs72 billion to around Rs80 billion during the
current fiscal year.
Increase in sales tax was described by the revenue circles as
inevitable, to facilitate the agreement with the IMF for the
restoration of stalled ESAF.
Increase in sales tax, economic analysts were of the view, would
escalate the prices, particularly, of those products which were
within the ambit of sale tax.
Sales tax has been a burning issue and threadbare discussions were
held between the government and the business community time and
again during the first five months of the current fiscal year.
One of the main objectives of levying the sales tax, sources
opined, was to ensure the documentation of the economy which is
included in the IMF conditionalities, attached to approving soft
term loan for Pakistan.
Sales tax payers' net is expected to be broadened to 15,000 by June
1999, sources said adding, during the first quarter of 1998-99, the
Board was able to collect over Rs8 billion and refund claims were
allowed worth over Rs6 billion.
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981203
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New Zealand confirms it will lease 28 F-16s
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DAWN Report
WASHINGTON, Dec 2: New Zealand confirmed on Wednesday that it would
lease the F-16 fighter planes for $6.6 million per plane in a 10-
year deal, leaving Pakistan still looking for the balance of about
$400 million in the deal. A spokesman for the New Zealand embassy
told Dawn that Wellington would lease the planes and make the
payments directly to the US, without any dealings with Pakistan.
The spokesman, Defence Attache Admiral James Barclay, said the 28
F-61 planes would be accepted on "as is where is" basis. Experts
said the US deal with New Zealand and the disclosure by Ambassador
Riaz Khokhar on Tuesday that Pakistan had already accepted partial
payments of $235 million out of $658 million it had paid for
purchase of F-16s, meant that the option for taking the US to the
court had been surrendered by Pakistan.
It is still not clear how the US would pay the balance amount to
Pakistan but President Clinton to a question by a US reporter
before he began his talks with Nawaz Sharif, said: "We are working
out this problem with Pakistan." The decision to take the Pakistan
planes was taken by the cabinet in Wellington on Monday, the
spokesman said.
The US officials told the New York Times that New Zealand had
agreed to lease the 28 F-16 fighters planes on a 10-year
arrangement.
The revenue collected from this lease contract would be used to pay
a part of $658 million Pakistan paid for these planes, a
prestigious and influential newspaper The Washington Post said in
an analysis here Wednesday.
The US officials confirmed the arrangement but not the price and
said many details remained to be worked out, including how much
money would go directly to Pakistan and whether the New Zealand
could later upgrade the planes. Pakistan had paid about $658
million for 28 of the 60 F-16s planes it had ordered when a
Congressional amendment was triggered in 1990 that suspended all
direct economic aid and military sales to Pakistan. But Washington
refused to reimburse Pakistan, since the money was already spent to
build the planes, and there was a search for nearly a decade to
find another customer, while the planes remain in storage in the
Arizona desert.
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981203
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Railways reorganized to eliminate deficit
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Muhammad Ilyas
ISLAMABAD, Dec 2: Pakistan Railways has made arrangements to
eliminate deficit from its operations from the current financial
year, thanks to its segregation into four companies, Chairman of
Railway Board Masud Daher told Dawn here on Wednesday.
He said that the passengers and freight companies, which had
commenced their separate operations from last September had
increased their revenues substantially in just three months. In
1996-97, PR had run a deficit of Rs1.5 billion. Even during the
first two months of the current fiscal, its deficit had amounted to
Rs80 million.
The effort was to run PR on commercial lines in order to make it an
efficient service in two to three years. Railways, he pointed out,
had been declared an industry so that private sector might come
forward to invest for its continued development.
In reply to a question, the PR chief expected the four companies
(one each for passenger wing, freight wing, infrastructure and
residual) to be registered with the Corporate Law Authority by
February next. But this would depend on adoption of appropriate
amendment in the Railways Act by the Parliament.
The railways ministry, meanwhile, was currently engaged in
resolving various measures pertaining to legal constraints and
utilizing the services of experienced chartered and cost
accountants for preparation of financial statements of the four
companies. One of the important tasks in this connection, he added,
was the preparation on commercial lines of four separate budget of
the new entities.
Since their separate operation, the passenger and freight companies
had already exceeded their revenue targets in the last two months.
The former had raised its monthly revenues to Rs410 million. This
was made possible, inter alia, by increasing the frequency of train
services between Faisalabad and Karachi from alternate days to
every day. Besides, the ratio of trains starting from their
originating stations, was 95%.
As regards the service to passengers, he said that at present only
25% of trains were equipped with lighting and water facilities. The
remaining 75 per cent would be provided fully with these facilities
by next June. Three trains running in the Lahore-Narowal section
had been provided with these facilities. In this connection,
overhauled passenger wagons were being inducted into the passenger
service at the rate of 90 a month.
Questioned about the revenue loses of PR, he said that the Federal
Cabinet had recently decided to abolish free passes for officers in
BPS 17 to 21 as well as complimentary passes. Henceforth, all the
officers would have to pay 10 per cent of the fare. Moreover, it
had been decided that the revenue-giving passengers would have
priority over the pass-holders (including those paying 10% and 33%
fare) in the allocation of seats.
To check ticketless travel and other malpractice, he said a special
campaign had been launched by PR.
In addition, revamping of reservations, ticketing and sale of
passenger tickets was also in hand and would be computerized by
next June so as to obviate the menace of black-marketing and
ticketless travel.
PR was also losing revenue on account of allotment of stalls.
Recently, however, under a Federal Cabinet directive, these stalls
were allotted on the basis of open auction. Consequently, PR had
netted Rs19 million at Lahore and a few other stations, whereas
these used to yield only a few thousand rupees in the past.
Talking about the freight company, he said the number of goods
trains leaving Karachi each day had been raised from 4 to 10 since
November 1. The number of wagons loaded with goods each day had
also gone up from 686 wagons to 1066 wagons for transportation of
petroleum, fertilizer, cement, wheat etc.
===================================================================
BUSINESS & ECONOMY
981205
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Pakistan's credit rating further downgraded
-------------------------------------------------------------------
Correspondent
WASHINGTON, Dec 4: Pakistan has met all IMF conditionalities and
has delivered what it had to, Finance Minister Ishaq Dar announced
on Thursday as a major credit rating firm further down-graded
Pakistan following reports of a 13 million dollar default in
interest payment.
Dar, however, told a special briefing for journalists accompanying
the prime minister that the default issue had been resolved and the
payment had been made by Pakistan, thus maintaining its clear
record of not missing out on any due payment.
Standard and Poor's rating firm lowered Pakistan's long term debt
from CCC- to CC with a negative outlook after Pakistan failed to
pay 13 million dollars in interest due Nov 20 on a 300 million
dollar bond issue. Short-term debt was reaffirmed at C, the firm
said.
"The negative outlook highlights the highly vulnerable state of
Pakistan's finances," the firm said. "If the payment ... is not
made within the grace period, the rating will be lowered to D."
It however said if in the medium term, Pakistan's credit standing
could improve materially, depending on the terms of any
rescheduling and, more important, the design and implementation of
needed structural reforms."
S&P acknowledged, however, that Pakistan has a 10-day grace period
to make the payment but said it estimated the country had a five-
billion-dollar financing gap in the current fiscal year and that
its reserves had dwindled to about 400 million dollars.
As news of the default and further down-grading of Pakistan's
rating broke, Finance Minister Ishaq Dar joined Foreign Minister
Sartaj Aziz at a briefing to announce that Pakistan had already
taken care of the 13 million dollar default issue and the payment
has been made.
Dar said Pakistan would not default on any of its payments any
further and would also not need any bridge financing before the IMF
tranche was released after the Board approval in January.
He said the meetings between Prime Minister Nawaz Sharif and IMF
chief had resulted in the full backing of the IMF for the programme
agreed earlier in Islamabad. "It is reassuring that the IMF MD had
backed us even before the Board approval," he said.
He said the Paris Club would be meeting on Dec 10 and once
clearance was given by the club to reschedule the debt, the IMF
board would meet in January.
He said: "We have been current with our creditors, and we will
remain current. We do not need any bridge financing and every
commitment and due payment within the grace period would be made by
Pakistan, until the IMF Board approves our programme."
He said speculative issues of devaluation and currency are now
clear. All prior actions that we had to take had been taken. What
we had to deliver we have delivered.
He said the IPPs issues had almost been settled. The pending issue
was three US firms which want to take their case to the private
committee and that government should withdraw NIT notices.
Dar said these notices will be withdrawn subject to the condition
that Pakistan will not prejudice its right to go to the court if
the issue was not settled by the committee. Once the IPP issue was
resolved, the restoration of investor confidence will follow.
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981204
-------------------------------------------------------------------
Govt borrows Rs 6.36bn from banks
-------------------------------------------------------------------
Reporter
KARACHI, Dec 3: The government on Thursday borrowed Rs 6.364
billion from money market through sale of treasury bills. The bills
were sold by the State Bank on behalf of the government.
Senior bankers told Dawn that SBP sold Rs 6.164 million worth of T-
bills for six months at a weighted average yield of 11.93 per cent
and Rs 200 million worth of one-year T-bills at 12.99 per cent.
They said the SBP rejected all the bids worth Rs 5.075 billion
received for 3-month T-bills.
Bankers said the SBP had received total bids worth Rs 37.609
billion for T-bills of the three maturities of which bids worth Rs
6.364 billion were accepted and the remainder was scrapped.
They said the market was fairly liquid at the end of the day with
an excess liquidity of Rs 7-8 billion. Overnight call rates
oscillated between 6.0-12.00 per cent.
Bankers said the market might remain liquid during this week as Rs
13 billion worth of inflow is due on Dec 5 through maturity of the
treasury bills sold in a previous auction and an open market
operation.
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981202
-------------------------------------------------------------------
Recovery of Rs9bn: Ittefaq group executive quizzed
-------------------------------------------------------------------
Reporter
LAHORE, Dec 1: An Ittefaq group executive was on Tuesday quizzed by
counsels representing creditor banks and financial institutions in
their suit for recovery of Rs9 billion in damages from them for
first 'engineering' default and then instituting recovery and
liquidation cases against its three units.
The three units Ittefaq Foundries, Ittefaq Brothers and Brothers
Steel are seeking various amounts totalling Rs9 billion from NBP,
UBL, HBL, ADBP and ICP.
The federation, the SBP and the defunct PBC have also been
impleaded as respondents.
Examined by Ittefaq counsel Chaudhry Muzammil Ahmad Khan, the group
executive, Haroon Pasha, said the respondent banks did not extend
their cash credit facilities in 1993-94 and then recalled their
loans. This policy decision forced the group to go into default.
The main thrust of the counsels of the banks, advocates Shams
Mahmood Mirza, M. Naeem Sehgal and Qaiser Javed Mian, was that the
three Ittefaq units obtained undue credit facilities due to the
pressure exerted by Nawaz Sharif as prime minister from 1990 to
1993. The units were unable to service their heavy debts and as
they defaulted on consecutive instalments, the mark-up piled up and
the debt burden increased manifold. In one case, it went up from
Rs60m to Rs200m.
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981201
-------------------------------------------------------------------
$350,000 paid in advance to PTCL adviser
-------------------------------------------------------------------
Bureau Report
ISLAMABAD, Nov 30: Privatization Commission has made a payment of
$350,000 to Goldman Sachs - financial advisers for Pakistan
Telecommunication Limited (PTCL) - on account of mobilization
advance, Dawn reliably learnt.
The payment of mobilization advance, which the commission had to
pay to the financial advisers by October 31, was delayed because of
restriction imposed by the government on the foreign currency
accounts.
The commission failing to arrange mobilization advance raised the
issue at the first meeting of privatization board. Prime Minister
Nawaz Sharif at the board's meeting gave the approval of raising
the amount from the open market.
However the commission later asked the ministry of finance to help
it in raising the foreign currency from the open market.
"Part of the payment has been arranged by us and a part of it was
provided by the finance ministry," said an official at the
commission. "We have made the payment and now we expect the
financial advisers to resume due diligence with in this week," he
said.
The financial advisers have chalked out a comprehensive marketing
programme including road shows and seminars to generate maximum
investors interest in the sale of PTCL, he added.
Apart from arranging the road shows and seminars the financial
advisers would also carry out a demand estimation study to appraise
exact expansion potential of telecommunication net work. At present
the PTCL network is spread over 3.58 million lines all over the
country. No such study to evaluate the exact expansion potential
has been carried out, said the official. The demand estimation
study, he said, would be of a great help in the privatization of
PTCL.
Goldman Sacks according to the agreement has to complete the
financial close and the transaction of the PTCL to an strategic
investor by the end of June 1999. The Commission for the whole
project has to pay a sum of $3.65 million.
"It is a milestone arrangement," the commission would make payments
with the progress of work done by the financial advisor, he added.
Pakistan Telecommunication Limited as per the Pakistan
Telecommunication Act has the monopoly by the end of 2002. The
delay in the privatization might reflect adversely in the price as
the monopoly period was shrinking with each passing day.
The previous government through a public offering had off loaded 12
per cent shares of the company. The remaining 98 per cent shares
are still with the government out of which it plans to sell 26 per
cent to an strategic investors along with the transfer of
management.
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981201
-------------------------------------------------------------------
Security for loans: SBP extends liquidation date of FCY deposits
-------------------------------------------------------------------
Reporter
LAHORE, Nov 30: The State Bank of Pakistan has extended the date
for liquidation of the frozen currency deposits as security for
loans till December 15 as desired by a three-member bench of the
Lahore High Court on November 27.
The reconstituted bench for hearing of petitions and appeals of the
aggrieved foreign currency account holders fixed Dec 3 for
commencing the day-to-day proceedings.
As regards interim relief, it said: "We find that there were some
arrangements made by the court with the consensus of the parties
whereunder the impugned SBP circular (No 23 of July 2) was not
enforced qua the petitioners. We hope the arrangements will
continue till the next date of hearing when we would like to pass
an order on the point."
Appearing for the SBP, Advocate Abid Hasan Minto undertook to
convey the court observation to the bank. Similar extensions were
earlier granted by the SBP for one-month periods.
The bench consists of Justice Mian Allah Nawaz, Justice Amir Alam
Khan and Justice Karamat Nazir Bhandari.
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981129
-------------------------------------------------------------------
'More incentives needed to boost gold exports'
-------------------------------------------------------------------
By Our Reporter
KARACHI, Nov 28: The new incentives to gold exporters given by the
government may not bring desired results as the jewellers feel that
there is still a lot to be offered in order to fully utilize the
potential.
Chairman, All Pakistan Gem Merchants and Jewellers Association
(APGMJA), Mehmood Chowksi looked somewhat satisfied that there was
little encouragement from the government and termed the package as
"something is better than nothing" under the present circumstances.
According to him, Pakistan's exports of gem and jewellery increased
to $15 million in 1997-98 from $9.5 million in 1996-97.
"We can increase the exports to $100 million in coming years if our
suggestions are fully approved by the government," he said.
The association has proposed to the government to make the import
of gold free for every one but the new package insists for
registration of exporters by paying a fix deposit of $10,000.
According to Chairman, GST Action Committee, APGMJA, Saeed Qureishi
the decision to allow exports will benefit only those who are
exporters and we cannot expect good results until gold import is
allowed freely like in India.
He said the government must now ensure one-window operation and
proper implementation of the new package so that some headway can
be made.
He said he has informed the finance and commerce ministers that the
association had not received the notification regarding the new
package.
He, however, hoped that import of gold would increase as
previously, the market was dependent on three big importers who
were making artificial shortage to secure higher prices.
Chowksi also urged the government to allow the use of gold stored
with the central bank like in India. According to the association,
gold worth Rs70 billion is available with the State Bank and if one
third is given to the industry on rent, the export of jewellery can
be increased within three-six months.
State Bank may be advised to loan the gold to the exporters through
designated nationalized banks.
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981202
-------------------------------------------------------------------
Freight issue: No early end to exporters' woes
-------------------------------------------------------------------
Mohiuddin Aazim
KARACHI, Dec 1: The State Bank may allow outward remittance of $22
million worth of stuck-up shipping freight from Pakistan from
Wednesday on first come first serve basis. But sources in the
shipping sector say it would not mean a simultaneous withdrawal of
the Karamahom decision that refrained shipping lines from accepting
freight for exports and imports booked from Pakistan.
Sources close to SBP told Dawn on Tuesday that some 675 cases of
shipping freight remittances worth $22 million had piled up till
Sept 30, 1998 which would be cleared on serial basis.
They said these cases had almost been serialized adding that the
process of clearing them might start from Wednesday. They said all
cases that fulfilled necessary formalities would be processed
within a week or a little more than that.
The SBP was supposed to start entertaining these cases from Tuesday
under an informal agreement reached between SBP authorities and
newly-inducted chief of Export Promotion Bureau Wajid Jawwad but it
did not come to pass.
"The SBP did not entertain a single case of freight remittance on
Tuesday," a spokesman for All-Pakistan Shipping Association Farrukh
Qaiser told Dawn on telephone.
The representatives of shipping lines had assured EPB chairman on
Monday that they would strongly recommend to their principal
offices to withdraw their decision of not entertaining export and
import cargo only on C&F basis from Pakistan if their outstanding
shipping freight up to Sept 30 is allowed to be repatriated abroad
from Dec 1. The Karamahom Conference issued a circular in mid-
November announcing that from Dec 1, 1998 its member shipping lines
would accept freight for imports and exports booked from Pakistan
not in Pak rupee but in a currency acceptable to them. This meant
that the shipping lines would not be accepting shipments on the
basis of C&Fthey would only be accepting shipments on FoB basis
rather.
This forced the exporters to spend sleepless nights as most of them
feared loss of business because selling goods on FoB basis in a
highly competitive world market has lately become next to
impossible. The worried exporters rushed to EPB for rescueand EPB
chief managed to win a word from SBP authorities on clearance of
backlog of stuck-up freight remittances up to Sept 30.
Sources close to SBP may clearance of this backlog may start from
Wednesday but the question is whether it would mean an immediate
lifting of the Karamahom circular. The answer is No.
"It might take some time," said Farrukh Qaiser. He said once the
SBP began allowing remittance of stuck-up freight the local
chairman of Karamahomthe state-run PNSC would only recommend to
its headquarters in London that the circular should be withdrawn.
"I cannot say how early the Karamahom Conference would respond to
such a recommendation."
Sources in the shipping sector say the conference might not
withdraw its circular until they see "a consistent improvement in
the current situation" which may take at least two weeks from now.
Besides it is not clear now when the SBP will start allowing
freight remittances stuck-up during October and November.
Farrukh Qaiser said that the total amount of unremitted shipping
freight up to Nov 30 is no less than $45 million. This means that
there is no word yet on cases of unremitted freight worth some $23
million.
He said he had suggested to the SBP that the shipping companies
should be permitted to accept freight in dollars from their clients
in Pakistan. He said the SBP officials were yet to respond to it.
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981202
-------------------------------------------------------------------
Cement makers decline to bring prices down
-------------------------------------------------------------------
Reporter
LAHORE, Dec 1: Cement manufacturers have ruled out the possibility
to lower cement price from Rs 240 per bag. According to the
Pakistan Cement Manufacturers Association here, the industrialists
have informed the Monopoly Control Authority that under the present
circumstances the cement rates could not be cut down.
The MCA wants manufacturers to fix the cement cost at around Rs 175
per bag. It feels that the cement producers have formed a cartel to
steer market forces in their favour which practice the authority
believes is not warranted under the law.
"The association has informed the MCA about its mind as the
manufacturers are ready to face any eventuality", a cement
manufacturer told Dawn here on Tuesday.
The association claims that the manufacturers have experienced
losses to the tune of about Rs 2 billion in the last 18 months due
to high rate of excise duty, sales tax and other levies.
"Even at the present rate (Rs 240 per bag) the manufacturers are
facing a net loss of about Rs 10 per bag", it said in a fax message
sent to the federal government.
In the meantime, sources said, the industrialists were pressing the
federal government to announce for them certain incentives enabling
them to export their excessive stocks.
"It appears as if the whole war of words between the manufacturers
and the MCA which is going on for the last about six weeks is to
decide the fate of the cement which has been produced in excess of
the domestic demand and which the businessmen want to bargain
against the soared cement price for shipment", sources noted.
But the federal government, they said, was firm that no more
incentives would be given to the cement industry as it was already
enjoying some relief against some other major industries in terms
of the rates of different levies.
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981204
-------------------------------------------------------------------
Business facing problems on export proceeds
-------------------------------------------------------------------
Parvaiz Ishfaq Rana
KARACHI, Dec 3: Exporters complain that they are facing problems
with banks despite the State Bank's directive on the delayed
repatriation of export proceeds for which the last date was
extended from Nov 30 to Dec 31, '98 by the finance minister.
'My bank has threatened to declare me a defaulter for not
repatriating the delayed export proceeds up to Nov 30 and has
stopped refinance facility which is going to effect the liquidity
badly needed for fulfilling export commitments,' said a leading
exporter of textiles.
Official claims that around $650 million are stuck up in over due
export proceeds but exporters say that only $100 million fall in
this category and are mostly for reasons beyond the control of
exporters.
Exporters maintain that the banks are reluctant to listen to them
in absence of written directives from the SBP and say they will
continue to consider Nov 30 as the over due date for repatriation
of export proceeds.
The Council of Textile Association (CTA) in a written complaint to
deputy governor SBP drew his attention towards Nov 27 meeting,
chaired by Finance Minister Ishaque Dar.
It pointed out that it was decided that the application of the SBP
circular No 48, governing delayed realisation of export proceeds,
will remain suspended up to Dec 15,1998, which was subsequently
further extended up to Dec 31, as declared by the finance minister
himself during the 'Leather Show' where prime minister was the
chief guest.
The CTA further stated that it has been brought to its notice by
several exporters that their banks are creating problems in
refinance, imposing penal interest and threatening them to be
declared defaulters.
Maqsood Ismail, acting president FPCCI contacted SBP director on
Exchange Control, Mahfuz Alam in this regard to get matters
clarified.
A copy the circular made available by FPCCI to Dawn stated that all
other instructions contained in F.E Circular No 48 dated Oct 22,
'98 except those contained in para (f), shall remain suspended till
Dec 31, '98. The para (f) of circular 48 only pertains to
submission by the banks a monthly report on overdue export bills.
Exporters said it is difficult to understand why banks are
harassing the exporters at this time of the year when they have to
utilize the textile quota before Dec 31, 1998.
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981205
-------------------------------------------------------------------
Stocks lose 63 points, break barrier of 1,000
-------------------------------------------------------------------
Reporter
KARACHI, Dec 4: The KSE 100-share index on Friday broke the
psychological barrier of 1,000 points as investors sold in a bit
haste long positions built-up ahead of the prime minister's US
visit apparently disappointed by conflicting news about the success
of his talks with President Clinton. It fell 63 points or about
five per cent at 979.04 points.
Massive selling in Hub-Power, PTCL and some other blue chips led
the market decline amid fears of bleak prospects of the IMF aid.
The news of postponement of IMF meeting drove KSE index below its
base level of 1,000 points for the fourth time during the current
year.
There was confusion in the rings as many were not prepared to
entertain the pessimistic idea about the outcome of the prime
minister's visit and after early pause panic selling followed,
notably from jobbers and bargain-hunters.
"A decline of 63 points or over 5 per cent in a single session
reflects investor's perception about the long-term economic outlook
and terribly weak fundamentals," analysts at the KASB said.
However, the nervous selling could be psychological as investors
have overreacted to the prime minister's US visit and its positive
outcome but the ground realities tell a different story, they
added.
"Investors are expected to be back in the rings led by foreign ones
after more details about the outcome of talks reaches the market,"
they hoped.
The KSE 100-share was last quoted at 979.04, breaching the
psychological barrier of 1,000 points, as compared to 1,042.21 a
day earlier as losers forced strong lead over the gainers at 70 to
15, with 14 shares holding on to the last levels, out of the 99
actives.
Massive speculative buying ahead of the prime minister's US visit
took place on hopes that he will come back home with a bag 'full of
aid' but investors were disappointed as there was no word on the
issue," they added.
Floor brokers said there might be wider understanding between the
prime minister and President Clinton about each other's position
but investors were hoping an instant major breakthrough in the
prevailing thaw on the aid front and post-nuclear test economic
sanctions.
"What seems to have further accentuated the prevailing apathy was
the news of postponement of the IMF meeting, due on Dec 10, which
was to approve the bail-out package of $5.5 billion agreed late
last month in Islamabad parleys," they added.
The selling in Hub-Power was largely attributed to its payment
dispute with WAPDA, which has reduced its monthly payment from Rs
850 million to Rs 720 million against energy bill and the former's
legal action, they said. PTCL, another pivotal, also came in for
heavy selling on news of lower interim profits and having about 33
per cent weightage in the KSE 100-share index, it drove below its
face value.
Otsuka Pakistan and Millat Tractors were leading among the gainers,
rising by one rupee to Rs 2.00 at Rs 8.00 and Rs 55.00. Losers were
led by Lever Brothers, PSO and Burshane Pakistan, falling by Rs
5.00 to Rs 25.00, with Burshane being the top loser.
Other prominent losers included MCB, Adamjee Insurance, Fazal
Textiles, Bolan Casting, PTCL, Fauji Fertilizer, ICI Pakistan,
Dewan Salman and Shell Pakistan, which suffered fall ranging from
Rs 1.45 to Rs 9.00.
Owing to Shab-i-Barat, trading was allowed only for the morning
session but volume figure was maintained at the overnight level of
90 million shares due to heavy selling in the pivotals.
The most active list was topped by Hub-Power, off Rs 1.30 at Rs
13.90 on 40 million shares, followed by PTCL, lower Rs 2.00 at Rs
20.95 on 18 million shares, Dhan Fibre, unchanged at Rs 2.60 on 5
million shares, PSO, off Rs 5.60 at Rs 75.50 on 4 million shares,
Engro Chemical, off 45 paisa at Rs 72.55 also on 4 million shares.
Other actively traded shares were led by Fauji Fertilizer, off Rs
2.65 on 3.256 million shares, followed by ICI Pakistan, off Rs 1.40
on 2.823 million shares, Dewan Salman, Rs 1.40 on 1.717 million
shares, KESC, easy Rs 1.15 on 2.918 million shares, Sui Northern,
lower 70 paisa on 1.280 million shares, and MCB, off Rs 1.45 on
1.082 million shares.
DEFAULTING COMPANIES: National Motors came in for active selling
and was quoted sharply lower, by Rs 3.00 from Rs 6.00 to Rs 3.00 on
500 shares, followed by Al-Qadir Textiles, steady 10 paisa also on
500 shares.
BOARD MEETINGS: Pakistan Engineering and Nina Industries on Dec 5,
Dhan Fibres, Chakwal Cement, AKD Securities and Safe Deposits
Company and Lucky Cement, Dec 7, Nimit Resins, Sarhad Cigarette
Industries, Adil Polypropylene Products, Universal Leather and
Footwear Industries and Al-Khair Gadoon, Dec 8.
DIVIDEND: Shezan International, cash 35 per cent, and Ismail
Industries, 15 per cent, for the year ended June 30, 1998.
Back to the top
===================================================================
EDITORIALS & FEATURES
981129
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The city of Karachi
-------------------------------------------------------------------
Ardeshir Cowasjee
GO TO the municipal office, or to the Civic Centre, and try to
impress upon the men there holding high offices that under any
circumstance it is a crime to desecrate a public park or a
vehicular road, and hand it over for private benefit, and you will
meet with blank expressions and empty looks.
You wonder if these men are made of wood from the navel upwards or
are merely routinely corrupt. Even after giving them the benefit of
the doubt, you conclude that routine prevails.
Descending the stairs of the municipal office you pass two marble
plaques, neatly embossed (rather than engraved) commemorating "the
consecration ceremony of the building on January 17, 1932, the
presence of the citizens of Karachi. May all be blessed in this
city." You wonder how many who have passed by have understood the
message and its import.
The other day, by chance I came across a copy of a speech delivered
over 70 years ago by a City Father of Philadelphia. It has spirit.
It marches.
"Back 144 years ago, this great nation, the United States of
America, was born in my city of Philadelphia, and so it is quite
natural that a city having such a historical record should have
that strong American spirit that has not only made it the greatest
industrial centre in this country, but also one of the largest and
the most beautiful cities in the whole world.
"Philadelphia has a population close to two millions of people, and
our city has an area that is equal to the combined size of
Milwaukee and Boston, Paris and Berlin, and out of our 130 square
miles of territory we have given up nearly 8,000 acres of our best
land for beautiful parks, squares and boulevards, so that our
people would have the proper places for recreation and pleasure,
and the right kind of environment that belongs to every decent
American.
"Philadelphia, friends, is not only a large, clean and beautiful
city, but it is also known everywhere as the great workshop of the
world, and the reason it is called the workshop of the world is
because we have a vast army of over 400,000 people employed in
9,200 industrial establishments that turn out one hundred thousand
dollars worth of useful commodities every ten minutes of the
working day, and according to a well known statistician, there is
no city in this country that equals Philadelphia in the production
of woolen goods, leather goods, knit goods, textiles, felt hats,
hardware, tools, storage batteries, steel ships and a great many
other things. We build a railroad locomotive every two hours day
and night, and more than one half the people in this great country
ride in street cars made in the city of Philadelphia.
"We manufacture a thousand cigars every minute and last year, in
our 115 hosiery mills, we made two pairs of stockings for every
man, woman and child in this country. We make more carpets and rugs
than all of Great Britain and Ireland combined, and, in fact, our
total commercial and industrial business is so stupendous that our
banks clearing last year, amounting to thirty-seven billions of
dollars, would have paid for every Liberty Bond in the entire
company.
"But, friends, while we are very proud of our wonderful industrial
progress, and while we are also very proud of being one of the
largest medical, art and educational centres in this country, yet,
we feel a still greater pride in the fact that we have more
individual homes in the City of Philadelphia than there are in any
other city in the whole world. In Philadelphia we have 397,000
separate homes, and if these homes were placed on twenty-five foot
lots, side by side, in one single row, that row would reach all the
way from Philadelphia clear through to this Convention Hall, at
Kansas City, and then on to Denver, a distance of 1,881 miles.
"But what I want to call your special attention to is the
significance of the fact that tens of thousands of these homes are
owned and occupied by the working people of our city, and when a
man owns the ground upon which he stands and the roof over his
head, there is no argument ever presented that would infect that
man with those imported diseases, known as Socialism and
Bolshevism.
"Philadelphia is no fertile soil for European anarchy, because our
homes, our educational institutions and our gigantic industry have
been produced by that true American spirit that was born in our
city, and is a heritage from our forefathers. Philadelphia is the
mother city of this great country, and the very fountain-head of
American liberty. It is the city where the first American flag was
made; it is the city where the first Congress of the United States
met; it is the city where the Declaration of Independence was
signed; it is the city where that best loved relic in America, the
Liberty Bell, has inspired tens of thousands of our men, women and
children, so that we believe we have a sacred mission, which is not
to worship the golden calf, but to spread the American spirit, and
to keep the fires of freedom burning, so that with God's
permission, the Government of Washington, Lincoln and Theodore
Roosevelt may be an inspiration to all humanity."
The Karachi municipality was established in 1852, almost 150 years
ago. Its ex-officio president was the Commissioner of Sindh, that
able administrator Sir Henry Bartle Edward Frere, assisted by a
secretary who was paid the grand sum of Rs 50 per month. The
secretary's assistant, a native of Karachi, was described as 'an
English-knowing clerk' who in turn was assisted by a munshi, all of
whom had the services of three peons. With the passage of time it
grew and by 1918 had assumed proper responsibility for the affairs
of the city, with representatives on its Board of a large cross-
section of Karachi's residents, both British and Indian.
It was in 1918 that Jamshed Nusserwanjee Mehta was elected a
councillor, which he remained until 1922, when he was unanimously
elected to succeed his senior Ghulam Ali Chagla as President of the
Council. He was re-elected year after year, eventually becoming the
first mayor of the city in 1933, when the Karachi Municipal
Corporation was formed. On being elected mayor, Jamshed made it a
rule that mayoral elections were to be held annually, and that no
candidate could serve for more than one term at a time. When
Jamshed stepped down in 1934, he reverted to his councillorship,
finally retiring from public office in 1937.
The second mayor of Karachi, the great lawyer, Tikamdas Wadhumal
(mentor of Dingomal Narayangsingh Ramchandani), had been the
municipality's honorary legal adviser for many years. He was
followed by Kazi Khuda Buksh, Khan Bahadur Ardeshir Hormusji Mama
(the founder of Mama Parsi Girls High School), Durgadas Advani,
Hatim Alvi, Rustom Khurshedjee Sidhwa, Lalji Melhrotra, Mohammad
Hashim Gazdar, Sohrab Kawasjee Hormusjee Katrak, Shambonath Mulraj,
Yousuf Haroon, Manuel Misquita, Vishramdas Devandas and Mohammad
Ahson, as mayor when Pakistan came into being.
The foundations of the corporate body were laid by Jamshed, and he
conceived its majestic building. Sir Montagu de Pomeroy Webb, doyen
of Karachi's British community, on Jamshed's retirement recorded:
"I consider that Jamshed has done greater and better work for
Karachi for its citizens and the people of Sindh than any other
individual private citizen of this capital whom I can remember. His
sacrifices of time, money, strength and peace of mind have been
unequalled and wholly admirable. The city owes him an immeasurable
debt of gratitude which I hope that each and every community will
ungrudgingly recognize."
Coming to the present, the city is fortunate in having, by
accident, two good bureaucrats Allahrakhayo Aasi as director-
general of the Karachi Development Authority, and Syed Arshad Ali
as administrator of the Karachi Municipal Corporation. They and a
few of their officers genuinely wish to do good by the city, but as
must be expected, the corrupt in their organization, fed by the
builders' mafia and the land grabbers and desecrators, impede them
at every step. The corrupt include many of the incompetent legal
advisers of these bodies who have well entrenched themselves (the
KMC man has been there for 22 years).
Their latest ruse is to encourage the builders to file dubious
'contempt of court' applications against the correctly acting
officers, engineering the issuance of notices for personal
attendance and then getting the cases adjourned week after week.
Some judges tend not to excuse personal absence and the officers
have to wait in the corridors each day the case is listed. This
further stifles remedial action while illegality rises, swiftly,
brick by brick.
"May all be blessed in this city."
DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS
981205
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Snatching back our rights
-------------------------------------------------------------------
Irfan Husain
A COUPLE of years ago, an English friend asked me what I thought
were the defining characteristics of Pakistanis. At that time, I
could not think of any that set us apart from other nationalities.
But since then, I have thought often and hard about this question,
and have developed certain ideas and views that I would like to
share with readers.
Above all, we are a pushy, impatient people who simply can't wait
whether it is at traffic signals, queues at airport check-in
counters or for our turn on a waiting list for telephones,
electricity or gas.
Even when there is no advantage in jumping the queue, you will find
Pakistanis jostling their way forward. For example, instead of
waiting their turn to get a boarding card, many passengers will
instinctively head for the counter, disregarding all the others who
have been patiently waiting in line. They seem to forget that their
plane will (hopefully) take off at the scheduled time irrespective
of when they reach the departure lounge. And after the plane has
landed and is taxing towards the terminal, these same jumpy types
will stand up and retrieve their oversized hand luggage from the
overhead racks despite repeated announcements to stay seated.
But these same people will stand meekly in line at Heathrow or
Dubai and will stay seated if a white airhostess sternly insists
that they wait until the aircraft has come to a complete halt.
Indeed, it has always fascinated me to observe how the behaviour
pattern of my countrymen changes when they are abroad and on their
own. Of course, Pakistanis are just as obnoxious abroad when they
travel in large herds, but are quite tame singly or in pairs.
Far too often, very respectable and highly educated people will be
seen jumping the queue in Karachi when they wouldn't dream of doing
such a thing in London. So what is it about our environment that
encourages such anarchic behaviour? I suspect that the example set
by people at the very top is the cause. The elites are unused to
waiting, and are emulated by those below them. All of us are
familiar with the sight of flunkies going behind the PIA counters
to get boarding cards for the best seats for their masters. Lesser
mortals then try to muscle in ahead of the rest. And so it goes.
Having established that impatience is a typically Pakistani trait,
we are faced with a paradox: how to explain the bovine placidity
and endless patience displayed by our people when faced with the
plethora of ills and shortages that plague our society? Why do they
put up with a creaking infrastructure, a collapsing educational
system, the shocking venality of our leaders and the corruption and
incompetence of our bureaucracy?
Why don't they go on a rampage against crushing prices and the
unavailability of the most basic commodities and services? Why in
God's name don't they rebel against those responsible for their
sub-human living conditions, the widespread unemployment and the
nonexistent medical facilities for the poor?
This apathy is hard to reconcile with the aggression we observe
every day on the streets, at the railway stations and in most
public places in Pakistan. Or take large dinner parties as another
example: guests with ample girths in no obvious danger of
starvation will be seen pushing their way to the tables, stacking
their plates with huge helpings and shovelling the food into their
mouths as though this was their last meal. Although they are hardly
the types revolutionary armies are composed of, one wonders why
they put up with the power breakdowns, the pot-holed roads and the
filthy water that flows from our taps when we are lucky?
The answer again lies in the attitude of the educated elite in
Pakistan. Since they can afford to insulate themselves from much of
the nastiness that makes life unbearable for so many, they are not
moved to protest. On the lower rungs of the social ladder, people
are so accustomed to being shafted by the state that like prisoners
in a penitentiary, they take whatever is thrown their way by their
jailers.
Those who refuse to put up with it join extremist groups and gangs.
Indeed, what has been happening in Karachi for years can (and
should) be seen as an unfinished rebellion against the state. It
has taken on criminal overtones, but then uprisings against the
status quo are seldom orderly affairs. Had the MQM been able to
transcend its ethnic appeal and origins, it might well have struck
a more responsive chord in other parts of the country.
If things are to change in Pakistan, we need more aggression and
impatience rather than less, but directed against the
representatives of the state, and not against other citizens. The
problem is that the natural leaders of such a grassroots movement
lead fairly comfortable lives, and are therefore not motivated to
take on the state. The major political parties are now agents and
supporters of the status quo and can therefore not provide the kind
of leadership that is required.
Change can only come about if we can exert pressure on the state
and its organs. Currently, this is taking the form of sporadic
violence and critical articles in the press. The former only
provides the state with justification to strengthen its repressive
machinery and laws, while the latter is easily ignored or brushed
aside. But if a groundswell is to build, ordinary people must make
their dissatisfaction known emphatically and loudly to those
responsible.
For instance, if enough consumers bombard the home phones of the
KESC senior management when there is a power shutdown, it might
make them aware of the suffering of their customers. Ditto for all
the other utilities. Similarly, if candidates asking for votes are
grilled about their performance and not about promises, we may see
them do more once they get to the assemblies.
Ultimately, we do have it in our power to change the status quo,
but we must assert ourselves to make a difference. Rights are never
given; they have to be snatched. So if we live up to our natural
impatience and aggression in a constructive way, we may finally get
somewhere.
DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS
981203
-------------------------------------------------------------------
Beyond the bailout
-------------------------------------------------------------------
Sultan Ahmed
THE IMF has given financial breathing space to Pakistan for the
time being by agreeing to a bail-out package of 5.5 billion
dollars, inclusive of rescheduling repayment of external loans
worth 3.5 billion dollars.
That has been made possible by President Clinton who suspended some
of the sanctions, imposed in the wake of Pakistan's May nuclear
tests, after US Congress gave him the authority to do so for a year
within the scope of America's strong anti-nuclear proliferation
policy. Meanwhile, Congress has come up with tough conditionalities
for the IMF while approving 18 billion dollars which the IMF had
sought to augment its depleting financial resources for arresting
the "contagion" from one country to another in an economically
destabilised world.
Those in Pakistan who call our nuclear capability as the Islamic
bomb or describe it jubilantly as the only Muslim country with the
proven bomb, should not ignore the fact this is not a development
which Israel relishes, and Israel, which has strategic cooperation
with India, has not concealed its distaste for Pakistan's nuclear
capability. The Zionist lobby in the US, which has a strong
influence on both houses of Congress, can be expected to keep a
sharp eye on Pakistan's nuclear pursuits and exert pressure on
President Clinton and Congress to restrain Pakistan from expanding
its nuclear capability further.
While President Clinton and the IMF have provided breathing space
to Pakistan for a year, the country still faces other severe
economic problems. The external debt of 32 to 34 billion dollars
keeps on swelling as we continue to devalue the rupee from time to
time. The government has first to mobilise the rupees through
taxes, convert them into dollars and repay the loans. In addition,
there is the domestic debt of the government which by June 30 last
had risen to Rs 1,161 billion, and that calls for a debt servicing
cost of Rs 164.5 billion while the debt servicing cost of foreign
loans is only Rs. 42 billion out of the total debt servicing cost
this year of Rs 275.6 billion, including repayment of loans for Rs
69 billion. Total national debt was recently stated to be Rs 2,150
billion. In fact the total seems to be rising fast following the
heavy borrowing of the government and the resort to devaluation of
the rupee, and more of it to come soon despite Mr Ishaq Dar's
denial.
It is a long way before the high interest rates can come down and
the government could borrow at cheaper rates than 16 to 18 per
cent. High inflation despite the official denial, heavy borrowing
by the government and inability of the banks to recover much of the
defaulted loan repayments stand in the way of interest rates coming
down soon.
Pakistan has other problems like arresting the declining exports
and falling revenues and reducing the large deficits on both
scores. It is tough to export more in a hostile or unfavourable
export environment. The Export Promotion Bureau accepts many of the
reasons advanced by exporters of textile made-ups for the 13 per
cent fall in their exports in the first four months of this
financial year. They are currency turmoil in East Asia, decline in
the rupee value, and dumping measures and high cost of inputs in
Pakistan. Cotton prices shot up at home and made textile fabrics
and other made-ups more costly. While India has come up with a 5.5
billion dollar textile package to strengthen its export sector,
Pakistan is not helping the textile exporters in the futures market
by not ensuring cotton deliveries to the mills on the basis of
prices agreed in advance.
Now we are told that six ginning factories in Sindh have closed
down because of heavy losses. They had bought cotton at high prices
and sold at low prices as prices fell. And the cotton we export get
lower prices because of the admixture of other elements. We have a
singular capacity to add to our miseries and getting far less for
doing far more. All that may be a part of the under-development but
in a world in which many developing countries have shed their old
habits and weaknesses and become industrial states, there is no
reason why Pakistan cannot do the same.
It is time the agriculturists, businessmen and industrialists gave
up their old habit of seeking mere reliefs and concessions from the
government and contributing little, in return, to the development
of the country. Now that the controls on trade and industry have
eased substantially, they ought to show greater enterprise. But the
requisite effort is not forthcoming. The manufacturers still have
their eyes on large profits instead of seeking profits through
larger turnover. And the government is slow in reaching decisions,
and usually comes up with half measures.
The new chief of the Central Board of Revenues Mr Iqbal Farid has
called for revenue collection by his officers on "war footing" to
fulfil not the reduced revenue target but the old target of Rs
354.5 billion. That need not mean that the proverbial corruption in
the departments would be given up on a war footing and virtual
doubling of revenues would take place on that score alone. If
instead the taxation officers step up the heat on the formal sector
indiscriminately that could deter the economic revival and
industrial recovery.
Prime Minister Nawaz Sharif should know the problem better. While
he presented awards for the best performing companies in terms of
profit to share holders in 1997, he agreed with the chairman of the
Karachi Stock Exchange Mr Yasin Lakhani that companies which did
not pay taxes and give fair dividend to the share-holders should be
blacklisted. Some of the members of the KSE sitting there asked
each other how many of the 30 companies in the Ittefaq Group had
given good dividend to their minority or small share-holders. They
could not recall any despite the fact the Ittefaq Group of
companies are very well managed and the Management Association of
Pakistan had recently given an ward to one of the companies for its
managerial excellence.
At a time when foreign investment in Pakistan has become a major
issue, particularly investment in the power sector, look what China
has done! In the last 20 years it has absorbed 360 billion dollars
of foreign investment, including direct foreign investment of 200
billion dollars. It is only second to the US in the world in the
quantum of foreign investment.
By the end of 1997 China had approved 314,533 foreign-funded
companies with contracted foreign capital of 545 billion dollars
and had actually used 242 billion. As a result of the industrial
expansion, China's export-import volume in 1997 reached 325 billion
compared to Pakistan's under 20 billion dollar performance. China
has foreign exchange reserves of 140 billion dollars after it
dropped from 160 billion dollars in June compared to Pakistan's
425 million dollars. And yet China insists it is a developing
country with many major economic problems.
Compared to that, foreign investment in Pakistan, including re-
investment, by the end of 1996 was under eight billion dollars. And
that too because foreign investment in power production sector went
up sharply in recent years, and that has become a major
controversial issue now.
The quantum of external assistance to Pakistan in recent years has
been equally low. While the IMF has come up with a package of only
5.5 billion dollars for Pakistan, to Brazil it has advanced 41
billion dollars for three years. Out of that, 37 billion dollars
could be available within 12 months if needed, says the managing
director of IMF Michel Camdessus. Our first tranch, according to
our expectations, is to be 500 million dollars but indications from
the IMF is that it may be 250 million dollars.
Evidently we have to do a great deal more to develop the country
fast. We must develop agriculture in which, too, we have a large
deficit. Agriculture minister Lalika is right in wanting to give
farm loans of Rs 60 billion next year against the current year's Rs
40 billion. But equally important is its proper use and regular
recovery instead of the richer among the big farmers grabbing too
much of that and returning too little, while not using enough of
that on their farms plagued by a host of ills.
It is interesting to note that mega-mergers in the world are
becoming common. Exxon with a market capitalisation of 181 billion
dollars and Mobil with 66 billion dollars are to merge to become a
company with a market capitalization of 247 billion, while Exxon is
already the largest company in the world on the basis of revenues
of 182 billion dollars, followed by General Motors and Ford Motors.
In Europe the expanding Deutche Bank of Germany is taking over
Bankers Trust by paying 10.1 billion dollars to create the world's
largest bank in terms of assets. Simultaneously the chief executive
of Barclays Bank Martin Taylor has resigned because profits will
fall by 8 per cent this year.
An here in Pakistan, with the kind of political set up we have and
public institutions being too weak, we are finding it tough to
break out of the small but hard shell. But individuals and
institutions have to try hard to achieve what we must without fail.
===================================================================
SPORTS
981202
-------------------------------------------------------------------
Amjad Khan rises to No.15 in world squash ranking
-------------------------------------------------------------------
Reporter
KARACHI, Dec 1: Ever-improving Amjad Khan, who last month won the
Pakistan Open, has gone up to no 15 in the world squash while
record eight time world champion Jansher Khan has further slipped
from six to eight in the PSA December rankings announced on
Tuesday.
Jansher Khan, who last his number one ranking in February this year
to Scotland s Peter Nicol who remains at the top,had pulled out
from a good number of tournaments following his knees surgery in
April and also because of goring problem he suffered at Hong Kong
Open.
Peshawar-born Amjad Khan, the 18-year-old former Asian junior
champion, has taken a giant step forward by improving his ranking
from 24 to 15.
The top 24 in the December rankings are: 1- Peter Nicol (Scotland),
2- Ahmed Barada (Egypt) 3-Jonathan Power (Canada), 4-Paul Johnson
(England), 5-Martin Heath (Scotland) 6-Dan Jenson (Australia), 7-
Rodney Eyles (Australia), 8-Jansher Khan (Pakistan) , 9-Simon Parke
(England), 10-Derek Ryan (Ireland), 11-Alex Gough (Wales), 12-Chris
Walker (England), 13-Mark Chaloner (England), 14-Byron Davis
(Australia), 15-Amjad Khan (Pakistan), 16-Mark Cairns (England),
16-Graham Ryding (Canada), 18-John Whites (Scotland) 19-David Evans
(Wales), 20- Paul Roice (Australia), 21-Stefan Casteleyn (Belgium),
22-Omar Elborolossy (Egypt), 23-Anthony Hill (Australia) 24-Amir
Wagih (Egypt).
DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS
981203
-------------------------------------------------------------------
Sohail faces the axe: Captain for Indian tour on council's agenda
-------------------------------------------------------------------
Samiul Hasan
KARACHI, Dec 2: The fate of skipper Aamir Sohail hangs in the
balance as the Pakistan Cricket Board (PCB) called its executive
council meeting on Dec 8 to discuss the cricket team's inept
performance.
PCB chairman Khalid Mahmood said from Lahore on Wednesday that the
meeting was a scheduled one but the timing of it definitely conveys
the message.
"Naturally, every cricket board official is concerned about the
performance of the team and that's why we have called the meeting,"
admitted Mahmood.
Informed sources, however, stated that the two-point agenda for the
meeting also includes the appointment of captain for next month's
tour of India.
He said the team's performance against Australia and Zimbabwe would
be discussed in detail "and if the council thought necessary that
certain decisions have to be taken, then it wouldn't hesitate in
taking those steps.
"Not only captain's role would be discussed, the selection
committee and the coach would also come under discussion. Not
necessarily the captain would be changed, the entire setup can be
replaced or nothing could happen. The executive council is the
supreme body and has all constitutional powers to take decisions
which can be in the best interest of the game."
Wasim Akram and Moin Khan are emerging as likely replacements for
Sohail whose seven Test innings as captain have yielded 223 runs
with one century besides a 1-0 series loss to Australia first in
39 years and a seven-wicket drubbing at Peshawar by Zimbabwe
earlier this week.
Insiders, nevertheless, said efforts were being made from all
quarters to bring Wasim Akram back as he enjoys a clean support
from the entire team.
"Indian tour is very crucial and the best player who can lead from
the front and motivate the side into a winning one should be
appointed the captain. At present, Wasim Akram is the only player
who can deliver the goods," a councillor, on the condition of
anonymity, said.
Javed Miandad said from Lahore that he would be attending the
meeting "and would honestly brief the executive council. I don't
know what they would be asking me but I am prepared to answer all
questions to the best of my knowledge.
"I plan to ask for additional powers to criticise the team and the
players if they don't come upto expectations."
DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS
981201
-------------------------------------------------------------------
Zimbabwe register maiden 7-wicket win against Pakistan
-------------------------------------------------------------------
Samiul Hasan
PESHAWAR, Nov 30: Pakistan touched their lowest ebb on Monday when
Zimbabwe nailed them by seven wickets to win their maiden Test
abroad with more than five sessions to spare in the first cricket
Test at the Arbab Niaz Stadium.
Murray Goodwin, who has a phenomenal record of a century and six
half centuries in seven Tests before this one, dashed Pakistan's
hopes of an unlikely victory on the fourth day when he powered his
way to a magnificent unbeaten 73.
Zimbabwe resumed this morning at 70 for one chasing 162 for
victory. They wrapped up the proceedings in just 101 minutes when
former captain Andy Flower handsomely drove Aqib Javed to cover
boundary to give Zimbabwe a historic win.
Flower remained unbeaten on 17 with a six and two boundaries as
Zimbabwe scored almost run-a-minute on a wicket which didn't lost
bounce and assistance for the seamers.
Wasim Akram, nevertheless, stood tall amidst Pakistan's humiliation
when he once again showed his wits and hunger for more success by
picking up two more wickets to his last evening's scalp of Gavin
Rennie.
He finished with three wickets for 47 runs for match figures of
eight for 99. He is now two short of becoming seventh all-time
great by taking his tally of wickets to 354. He needs one more
wicket to share the place with Dennis Lillee.
However, Akram's brilliance was not enough to break the resistance,
determination and application of Murray Goodwin. The stylish
batsman slammed 13 exquisite and beautiful boundaries in his 124-
ball innings.
He had reached his seventh half century in Tests from 82 balls with
eight boundaries.
Together with Grant Flower (31), Goodwin added 81 runs for the
second wicket to provide Zimbabwe the launching pad for their first
success abroad in 16 attempts. They now have three wins in 32
Tests, including two against Pakistan and one against India.
A rush of blood on Flower's account brought his demise when he was
caught by Moin Khan after facing 101-balls out of which five were
converted into boundaries. Akram then bowled a nasty bouncer to
Alistair Campbell and the best the Zimbabwean captain could do was
to save himself from being hurt seriously by getting a glove and
Ijaz Ahmad holding easiest of catches.
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