------------------------------------------------------------------- DAWN WIRE SERVICE ------------------------------------------------------------------- Week Ending : 06 June 1998 Issue : 04/22 -------------------------------------------------------------------

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NATIONAL NEWS US defends arms supply by China to Pakistan Incentive offered to forex account holders Pakistan tests sixth N-device F-16 intruded Pakistan air space, says report Bid to meet sanctions: Spending cut by half Punjab sugar mills final bidding on 9th Pakistan did it in self- defence: Zaki Budget on 13th: Tough options for government Mass-scale production of Ghauri begins Muslim world urged to help Pakistan Swiss judge 'indicts agent' of Benazir, Asif Zardari --------------------------------- BUSINESS & ECONOMY 8 bidders named for KESC sell-off CBR considering raise in sales tax rate Economic cost of the N-explosions Inter-banks cheque clearance automated Reserves fall by $101m Sanctions increase business risks $88 million withdrawn from forex accounts Punjab sees Rs8bn cut in next budget Move to end dollarization of economy? 50pc cut in expenditure impossible to apply KSE index recovers 31.01 points on buying in Hub-Power --------------------------------------- EDITORIALS & FEATURES Anthropoids Ardeshir Cowasjee Madness in May Irfan Husain Eating grass Omar Kureishi ----------- SPORTS Will Mohsin Khan be able to deliver the goods?

NATIONAL NEWS 980606 ------------------------------------------------------------------- US defends arms supply by China to Pakistan ------------------------------------------------------------------- Shaheen Sehbai WASHINGTON, June 5: The White House, Pentagon and the State Department on Thursday defended the supply of conventional arms to Pakistan by China, saying these are designed to help Pakistan defend itself and they were not covered by MTCR. "We don't regard that as a dangerous act of proliferation. These are designed to help Pakistan protect its own forces against tank attack. In fact, in the past, the United States has sold anti-tank missiles to Pakistan as well," Pentagon spokesman Kenneth Bacon told the regular news briefing. He was asked to comment on reports that a Chinese ship with anti- tank missiles had been tracked by US intelligence and was on high seas heading for Karachi. Other spokesmen of the Clinton administration dismissed the report of the Chinese ship as unimportant. White House spokesman Mike McCurry said: "I am not aware that there are any current allegations that the Chinese are transferring technologies that would be restricted by any of the export control guidelines that we have agreed..." "There are technology transfers that occur. I mean they are involved in commerce in goods and services and technologies, just as we are," McCurry said dismissing the reports. State Department spokesman James Foley also did not attach any seriousness to the reports. "On the question of anti-tank missiles, they are short range defensive and conventional weapons and they do not represent a proliferation threat," Foley said. "They are not covered by the MTCR." Bacon said: "I can't comment, obviously, on specific intelligence matters. The story pointed out, after the first paragraph, that this seemed to be bearing anti-tank missiles, and we know that China has had a long supply relationship with Pakistan, supplying anti-tank missiles. We don't regard that as a dangerous act of proliferation. These are designed to help Pakistan protect its own forces against tank attack. In fact, in the past, the United States has sold anti-tank missiles to Pakistan as well." Bacon was asked about the Indian claims that its primary concern was China as far as their nuclear development is concerned. So apparently China and India think that they are each other's rivals in this nuclear matter. Does the United States see it that way? And why is this country so silent about China's role in the nuclear matters in the Indian subcontinent? He said: "First of all, in answer to your first question, I think I'll let the Chinese and Indian officials you quoted speak for themselves. I think they are probably better able to assess their own security concerns than I am. DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS 980606 ------------------------------------------------------------------- Incentive offered to forex account holders ------------------------------------------------------------------- Bureau Report ISLAMABAD, June 5: The Economic Policy Committee of the Cabinet (EPCC) has decided to provide additional incentives to the holders of foreign currency accounts, both residents or non-residents, if they convert them into rupees before Sept 1. The EPCC which met here on Thursday and Friday decided to exempt such foreign currency account holders from probe by tax authorities. They will enjoy exemption from wealth tax for six years and the interest or profit earned on the dollar accounts before conversion would be exempted from income tax. Moreover, the accounts will enjoy banking confidentiality. About exemptions from wealth tax, the CBR would shortly announce details. It was also decided by the EPCC that foreign currency deposits having specified maturities which extended beyond August 31, could also be covered into rupees on any earlier date. In such a case, the depositor will receive a lower profit according to established banking practice. The State Bank has already clarified that the foreign currency deposits maintained by diplomatic missions accredited to Pakistan, their non-resident employees, all international organisations in Pakistan including all UN agencies, IMF, IBRD, Asian Development Bank and their non resident employees will not be affected by the recent restrictions. There were some other categories in which there was either a contractual obligation or where the SBP would otherwise have allowed opening of foreign currency accounts. SBP will be considering applications regarding this on a case-to- case basis. Such applicants may approach the SBP with relevant facts. The committee was informed that banks were making arrangements to offer alternatives to investment in rupee account of short and medium-term duration in which the depositors can earn attractive returns. In addition, various saving schemes like National Defence Certificates offer attractive tax free returns to depositors. As such all those who convert their dollars into local currency and place them in rupee accounts or saving schemes will be earning handsome returns. Arrangements are being made to ensure that credit cards issued by banks can continue to be used outside Pakistan. In this regard appropriate instructions are being issued by the SBP to all banks. Deposits in foreign currency under the National Debt Retirement Programme will continue to be received, in accordance with the original programme. DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS 980531 ------------------------------------------------------------------- Pakistan tests sixth N-device ------------------------------------------------------------------- Hasan Akhtar ISLAMABAD, May 30: Pakistan carried out its sixth nuclear test on Saturday and said it had completed the "current series of nuclear tests". Islamabad also offered to hold talks to prevent the "dangers of nuclear conflagration". Announcing the tests at a news conference here in the afternoon, Foreign Secretary Shamshad Ahmed said all the tests were fully contained and there was no release of radioactivity. He added that the tested devices corresponded to weapons configuration compatible with delivery systems, but did not elaborate. The foreign secretary confirmed that some air attacks were feared on the country's nuclear installations after the Indian nuclear tests, but he said he had no report of any such attempt by Israel. Mr Shamshad said the nuclear tests provided Pakistan with a nuclear deterrence. "It will be used entirely for self-defence. We have no intention to enter into an arms race in the region". Reading from a prepared statement, the foreign secretary said "the history of the Cold War era shows that such disastrous races are counterproductive and definitely not sustainable", particularly since over one billion people of the region did not want, and certainly cannot afford to divert, precious resources for a nuclear confrontation in South Asia. The foreign secretary emphasized that only one test was carried out on Saturday, contradicting earlier reports that two tests had been conducted. He also denied that any missile tests had been undertaken since the Ghauri test last month. He said Pakistan's nuclear programme did not seek any superiority over India's and pointed out that nuclear tests were meant to establish the nation's nuclear deterrence against aggression. He said Pakistan resorted to nuclear option as a reaction to India's nuclear tests, and emphasized that in doing so Pakistan gave only a "bare minimum response" to restore strategic balance. Answering questions about Pakistan's stand on the Comprehensive Nuclear Test Ban (CTBT) and the Nuclear Non-Proliferation Treaty (NPT), Mr Shamshad Ahmad said the issue was being evaluated in the context of "new realities" pertaining to the regional security environment, especially the Indian threats to invade Azad Kashmir shortly after carrying out nuclear tests at Pokhran. "History tells us that non-proliferation cannot be ensured in a security void and a global security order cannot be predicated in trying to freeze inequities and ignoring injustices," Shamshad said. But the issue must be discussed with major world powers first, he added. DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS 980604 ------------------------------------------------------------------- F-16 intruded Pakistan air space, says report ------------------------------------------------------------------- Correspondent LONDON, June 3: An unidentified F-16 warplane had intruded Pakistan's airspace on reconnaissance mission hours before Pakistan conducted its nuclear tests raising fears among Pakistani officials that Israel might attempt to air attack on its nuclear installations, The Times newspaper said on Wednesday quoting Israeli and Western officials. Quoting these un-named officials, The Times said that Pakistani ministers concluded that Israel and India were in league to attack its nuclear facilities in the same way that Israeli jets destroyed Iraq's nuclear reactor in 1981 raid. Quoting Israeli media, the paper said that Pakistan's anxiety arose after an F16 was twice reported to have been spotted in its airspace. "It was assumed to be Israeli, because India does not have F-16s, but part of a force cooperating with India to launch a pre-emptive strike last Thursday, Pakistan made preparations to counter an air- strike and its missiles were put on high alert," the paper said. Quoting state-run Israeli television, the paper said that Pakistan Foreign Minister Gohar Ayub Khan had informed the United Nations and the United States hours before the first of its five tests last Thursday that Israeli jets were about to attack. It said that Israel used a variety of diplomatic channels to reassure Pakistan that it was not preparing any form of military attack. The paper said Pakistan suspected that Israeli jets were using Indian bases. "However, Western defence experts did not rule out the possibility that Israeli reconnaissance aircraft could have flown from a home base to Pakistan, using mid-air refuelling, without being seen by radar along the route," the paper said. It recalled that eight Israeli bombers had flew below the radar level across Jordan and Saudi Arabia in 1981 when it conducted air strike against Iraqi installations. The paper said that now Saudi Arabia has low-level radar systems and Israel would be unlikely to risk the overland route. "The alternative route would be to fly at low level out of Eilat down the Red Sea, with mid-air refuelling half way, then across the Arabian Sea before reaching Pakistan." The Times quoted Paul Beaver of Jane's Information Group as saying that the Israeli Air Force two-seater F-16 had been equipped with an advanced reconnaissance system which at 45,000 feet could take photographs of targets 50 miles away. The equipment is so sophisticated that it could read the lettering on the side of a truck parked at a Pakistani nuclear facility, he said. DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS 980531 ------------------------------------------------------------------- Bid to meet sanctions: Spending cut by half ------------------------------------------------------------------- Bureau Report ISLAMABAD, May 30: The National Economic Council (NEC) - the highest body on economic decision-making - on Saturday decided to make a 50 per cent cut on all expenditures, except for those on development and the salary component. "The prime minister, who chaired the NEC meeting here on Saturday, says that let there be a real austerity so that the nation could effectively meet the new challenges", said Finance Minister Sartaj Aziz after the meeting. He told newsmen that the NEC discussed the post-sanctions situation and agreed with the prime minister that there should be a 50 per cent cut in expenditure. Mr Sartaj Aziz said there would be a review of allowances and other facilities in order to effect a substantial reduction. He said except for salary and development expenditure, there would be a serious cut in expenditures on telephone calls, stationery, fuel and maintenance of dual offices. "That is the only way we can achieve self-reliance", the finance minister said. Responding to a question, he said the Rs 110 billion Public Sector Development Programme (PSDP), approved by the Annual Plan Coordination Committee (APCC), now might have some changes. To another question, the finance minister said the prime minister told his cabinet colleagues that hard times were ahead for which the whole nation seemed ready to extend full cooperation to the government. "No doubt there will be a paucity of resources and this situation will be faced by reducing our unnecessary expenditure", Senator Sartaj Aziz said. DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS 980602 ------------------------------------------------------------------- Punjab sugar mills final bidding on 9th ------------------------------------------------------------------- Reporter LAHORE, June 1: Prospective buyers of Kamalia and Pattoki sugar mills will have to pay Rs40 per share and Rs41 per share, respectively, to return the mills' loans as well as to contribute 50 per cent to the 'golden handshake fund' to pay off employees in addition to the purchase price. The two mills owned by the Punjab Industrial Development Board are being sold by the provincial government to the private sector through the Punjab Privatization Board (PPB). The pre-bidding conference for the interested investors is being held on Tuesday while the final bids will open on June 9. PPB chairman Tariq Hameed told reporters on Monday that the PIDB had lent Rs 175 million to Kamalia sugar mill and Rs157.5 million to Pattoki sugar mill which would be repaid by the prospective buyers. Furthermore, he said, the buyers would also have to pay half of Rs65 million to pay off 1,131 employees of Kamalia sugar mill and half of Rs90 million to pay off 1,350 employees of Pattoki sugar mill. He made it clear that these payments will be in addition to the purchase price to be offered by the buyers. Hameed said the PIDB had also decided to retain the current sugar stocks of the two mills to pay growers. Besides, the short-term bank loans taken by the PIDB to partly pay the growers would also be returned from the sale of the sugar stocks. At present, Kamalia sugar mills has a stock worth Rs570 million and liabilities of Rs260 million in the form of payments to be made to the growers and Rs210 million in the shape of bank borrowings. Similarly, Pattoki sugar mill has a stock worth Rs440 million against its liabilities of Rs150 million to be paid to the growers and Rs240 million to return the bank borrowings. DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS 980531 ------------------------------------------------------------------- Pakistan did it in self- defence: Zaki ------------------------------------------------------------------- Correspondent UNITED NATIONS, MAY 30: Comparing India with Nazi Germany, the chairman of Senate Foreign Relations Committee, Akram Zaki, said on Friday Pakistan had no choice but to conduct nuclear tests to restore the military balance upset by India. Addressing a press conference at the United Nations Correspondents Club, he declared that India was eyeing the wealth of the Arab nations, suggesting that New Delhi wanted to hold sway over them. Mr Zaki is heading a two- man delegation to the United States to explain Pakistan's position on the nuclear explosions. Ghulam Sarwar Cheema, chairman of the National Assembly's Defence Committee is also a member of the team. Mr Zaki said: 'I have had a very unhappy feeling that India in the '90s was pursuing virtually the same approach which the Nazi Germany pursued in the'30s." "Like the Nazi Germany of the'30s, India has expansionist ambitions. And like the Nazi Germany, it is pursuing an armament programme, including a nuclear one," he added. " Its eyes are not only on Pakistan, but also on the wealth of the Middle East. And it considers Pakistan the main obstacle to its expansionist designs,"said Mr Zaki. "Just as the Soviet southward expansion was stopped by Pakistan, acting as a shield; if India's expansionism has to be stopped, it has to be stopped now, with Pakistan acting as a shield," he said. Zaki. Mr Zaki said that after India exploded its five nuclear devices on May 11 and 13, it started threatening Pakistan, with various ministers making " irresponsible statements." " With these provocations and India's nuclear explosions, the psychological and the military balance had changed. And it was absolutely essential to restore this balance," he added. Mr Cheema, a retired army colonel and former minister of state for defense, told a questioner that " the nuclear weapon is essentially a political weapon. It is not meant to be used, except when it is in the hands of irresponsible nations." DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS 980605 ------------------------------------------------------------------- Budget on 13th: Tough options for government ------------------------------------------------------------------- M. Ziauddin ISLAMABAD, June 4: Finance Minister Sartaj Aziz will be presenting the second budget of the PML government on June 13 in an atmosphere of escalating nuclear tensions in the region, threats of international sanctions and burgeoning economic difficulties shaping up into a default-like situation. On the expenditure side there is not much that the finance minister can do to keep the size of the budget from going beyond that of current year's by at least 15 per cent as allocations for both defence and debt servicing are likely to go up by hefty margins. On the income side, the finance minister is facing a certain cut in the foreign flows as concessional assistance is going to be seriously affected if the sanctions take effect while the availability of commercial loans would become too uncertain because of downgrading of the country's risk rating by some of international financial evaluators. The government, therefore, has already assigned the Central Board of Revenue the task of collecting as much as Rs500 billion in taxes against the current year's target of Rs305 billion. Before the nuclear tests, the CBR was given a target of about Rs355 billion for the next year without proposing new taxes or increasing the rates of existing taxes except of course the introduction of general sales tax under which head the government had proposed to collect as much as Rs20 billion. However, the new target for collection amounting to Rs500 billion is likely to envisage enhancement of import duties by at least 10- 15 per cent which is expected to bring in an additional income while at the same time keep the imports within control. But, the fact that this would go against the IMF prescription is likely to influence the final decision on the matter because a government facing an extremely reduced foreign capital flows would not like to unilaterally repudiate an agreement from which flows of a billion dollars are expected over the next year. The biggest problem that the finance minister faces is that of servicing the foreign debt over the next 12 months and keeping the essential imports flowing in at the same time. He would need at least about three billion dollars to service the debt and another about 10 billion dollars for paying the bills for essential imports. Exports are expected to take care of at least about 8 billion dollars worth of imports. This would still leave a hefty amount of 5 billion dollars to be taken care of. It would be interesting to see how the finance minister proposes to grapple with this problem in his budget. DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS 980601 ------------------------------------------------------------------- Mass-scale production of Ghauri begins ------------------------------------------------------------------- Faraz Hashmi ISLAMABAD, May 31: The country's top nuclear scientist, Dr Abdul Qadeer Khan, said on Sunday that mass production of long-range Ghauri missile had begun at Kahuta laboratories. Mr Khan, who is the architect of the country's nuclear programme, told newsmen that the Ghauri missiles, deployed on the eastern borders a night before the first phase of nuclear tests, had been withdrawn. Dr Khan, however, did not confirm that missiles carried nuclear warheads. He simply said: "Who knows what type of weapons they were carrying." When his attention was drawn to a statement of the Foreign Office that Ghauri missiles did not carry nuclear warheads, he said: "If the government says so then let us believe it's so." After all it was the responsibility of the government to take a decision on the security of the country, he added. Confirming reports about an Indian plan to attack Pakistan's nuclear installations last Wednesday night, he said the government had received information from various quarters. "The GHQ thought sometimes people, in ignorance, take irrational steps and somebody could put in the minds of Indians that if they would first strike Pakistan, it will not be able to carry out its tests," he said. Therefore, he said, the government had put the army and moved some missiles for deployment. Dr Khan, describing the "Pakistani bomb" as a "peace guarantor" said, "my efforts for the bomb were an effort to ensure security for the people of my country." On the controversy going on between the Khan Research Laboratories and PAEC, he said the Kahuta research laboratories had been established to attain nuclear weapon capability. He said they had achieved that way back in 1984, and now when the time came for testing, the government decided that both KRL and PAEC should jointly work. DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS 980605 ------------------------------------------------------------------- Muslim world urged to help Pakistan ------------------------------------------------------------------- Correspondent RAWALPINDI, June 4: Agha Hamid Ali Shah Mausavi, chief of the Tehrik Nifaz Fiqh-i-Jafriya (TNFJ), has said that now when Pakistan has entered the nuclear club, western powers were bent upon punishing Pakistan through economic sanctions. Speaking at the Mehfil-i-Musa ibne Jafar on the occasion of "Youm- i-Noor" here on Wednesday, he said it was the duty of the Islamic world not to leave Pakistan alone in this hour of trial as all Muslims were like a body. The Islamic world should keep in mind that these sanctions were not only against Pakistan but against the Islamic world. In the present circumstances, he said, Iranian offer to coope rate with Pakistan suggested that they felt the pinch of Pakistani pain and were still following the line of action given by Imam Khomeini. Mausavi said if the Islamic world forged unity displaying courage and announced boycott of all Zionist and Indian goods then the economic sanctions imposed on Muslim states would become null. He said the 50-year-long Pakistani character indicates that Pakistan always helped Palestine, Iran, Afghanistan Iraq, Sudan, Libya, Saudi Arabia, and African Muslim countries whenever it was required. Terming the Iranian offer a good omen, he called upon other Muslim states to follow suit. He said the Pakistani nuclear tech nology ensured international peace. DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS 980603 ------------------------------------------------------------------- Swiss judge 'indicts agent' of Benazir, Asif Zardari ------------------------------------------------------------------- Nasir Malick LONDON, June 2: An investigating magistrate in Geneva on Tuesday indicted Jens Schlegelmilch, an alleged agent of Senator Asif Ali Zardari and former Prime Minister Benazir Bhutto in Switzerland, and two officials of Cotecna and Societe Generale de Surveillance (SGS) companies appointed by PPP government for evaluation of imports and exports on charges of corruption, payment of commissions and money laundering, a press release issued by a lawyer representing the government of Pakistan asserted on Tuesday. However, there was no official confirmation of the claim. The press release issued by Jermey Carver, a senior lawyer representing the government of Pakistan in cases against Mr Zardari in the UK said, the investigating magistrate, Judge Daniel Devaud, also "confirmed his intention to proceed with indictment of Mr Asif Zardari." "Regarding former prime minister Benazir Bhutto, he intends to proceed with her indictment after checking whether she benefits from immunity," the press release claimed. Indictment means that the magistrate, after detailed investigations six months in this case has sufficient evidence showing that crimes of corruption were committed, followed by money laundering of the proceeds in Switzerland. There is no appeal against the indictment. The investigations were conducted on the request of the government of Pakistan and after preliminary inquiries, the attorney general in Geneva ordered that a criminal investigation be started. It was in the course of these criminal proceedings that the judge made these indictments. Mr Schlegelmilch is a lawyer in Geneva and the sole agent of some 20 offshore companies said to have been established by Mr Zardari in British Virgin Island and who also allegedly used to manage the accounts of these companies on behalf of Mr Zardari, Benazir Bhutto and Begum Nusrat Bhutto in Geneva. All alleged commissions and kickbacks by Cotecna and SGS were allegedly handled by Mr Schlegelmilch. The judge has indicted Hans Fischer, a representative of SGS, who allegedly paid kickbacks to Mr Zardari's company, for money laundering. Similarly, the judge indicted Robert Massey, the managing director of Cotecna, who had been allegedly working in close collaboration with Mr Schlegelmilch, on the charge of money laundering.

BUSINESS & ECONOMY 980606 ------------------------------------------------------------------- 8 bidders named for KESC sell-off ------------------------------------------------------------------- Reporter KARACHI, June 5: The Chairman of Privatization Commission (PC), Khawaja Asif announced on Friday the names of eight prospective bidders participating in privatization of Karachi Electric Supply Corporation. Short listed from among 10 investors who showed keen interest in KESC privatisation by a panel comprising officials of PC, Ministry of Water and Power, KESC, and the Union Bank of Switzerland (Financial Advisor), Khawaja said they are (1) The Asea Brown Boveri (ABB) representing Army Welfare Trust which has teamed up with Deutsche Bank group (2) CMA Energy, USA (3) The Daewoo, Korea Electric Power Corporation (KEPCO) and Ansaldo (4) Marubeni, Japan (5) National Grid UK (6) Tractbel, Belgium (7) The UAE Offsets group and (8) Union Fenosa group Spain. Addressing the press conference, the PC Chairman was accompanied by UBS executive Khawaja Iqbal Ahsan, Managing Director of KESC Kamal Afsar, Chief Controller of KESC Abdul Rauf Yousuf and Amjad Pervaiz, a PC consultant. To a question, the UBS Executive indicated the completion of KESC privatization by October next but admitted frankly that the present situation is fraught with uncertainties and there could be delay for unforeseen reasons. To another question, the PC Chairman said 26 per cent to 51 per cent shares of KESC would be divested depending on the decision of the prospective investor. However, none of those who addressed press conference were clear whether divesting of KESC shares would be through negotiations with the prospective investor or through open bidding. Calling KESC "a crumbling company," the PC Chairman informed newsmen that accumulated losses and total liabilities have not only wiped out the entire capital but converted it into negative equity and hence it was not possible to work out the valuation of per share. Replying to another question, the UBS executive said the next step in privatization process is the technical assessment by a team of the prospective investor, financial restructuring and a close look at legal aspects particularly in respect of franchise licence. He said the prospective investors would do their own due diligence on all these aspects and it may take up to three more weeks before the privatization enters the final and decisive stage. He indicated that prospective investor would have to invest about 250 to 300 million dollars to refurbish the distribution system which is in very bad shape. Asked why KESC was being offered as a single entity to the investors instead of breaking it up into generation, transmission and distribution companies, he replied that transmission is a small faction while distribution is afflicted with multiple problems. The prospective investor would prefer to take entire company and would set up three divisions. The PC Chairman said the prospective investors has sought confirmation from UBS on autonomy and independence of National Electric Power Regulation Authority (NEPRA). The UBS and its associates, he said, reviewed the NEPRA Act and sought a clarification of NEPRA's independence in tariff and that comprehensive and well defined regulatory framework be set in place. Another major recommendation is on rationalization of fuel prices, reductions in transmission and distribution losses and decreasing overhead costs to achieve operational efficiencies which can be passed onto consumers. DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS 980606 ------------------------------------------------------------------- CBR considering raise in sales tax rate ------------------------------------------------------------------- Ikram Hoti ISLAMABAD, June 5: The Central Board of Revenue is considering to set the standard (slab) sales tax rate for the next financial year at 15 per cent, raising it from the current 12.5 percent. This increase in the rate is being proposed in view of the decrease in the rate of customs duty from the present highest of 40 per cent to 35 per cent, as undertaken in the light of the slab set by the World Trade Organization (WTO). The 12.5 per cent flat (standard) ST rate set in the federal budget 1997-98, is deemed insufficient to meet the tax revenue target following reduction in the customs duty rate in the 1997-98 federal budget to 45, 35, 25, 15 and 10 per cent. The CBR sources said that an additional sum of Rs15 billion is being anticipated from the increased rate of sales tax, and this sum would be over and above the growth of about 10 per cent expected collection under this head, in the financial year 1998-99. Initially, the CBR had been given a budgetary target of Rs70 billion but with the increase in rate the ST collection in the 98- 99 financial year might touch the figure of Rs100 billion. The CBR has a reduced target of ST collection of Rs57 billion to meet by the end of the current financial year. The revised target does not include a sum of Rs18 billion which was lost to the Fixed Tax Scheme, litigation over the claims of tax amounts by the corporate sector, less collection of about Rs1 billion on account of the retail tax after its target was reduced in the shape of Trade Enrolment Certificates from Rs3 billion to Rs2 billion) etc. The total loss in customs duties now being finally estimated on account of rate reduction incorporated in the federal budget, has been that of Rs25 billion. To make good the loss, the first step by the ministry of finance is expected to be removal of scores of exemptions allowed in the last 15 months. This step would be simultaneous with the increase in rate of ST to be incorporated in the federal budget 1998-99. The other step to be taken for meeting the revenue gap in 1998-99 would be imposition of increased rate of duty on scores of items, which is being actually dreaded by the importers, in the wake of the financial emergency imposed by the federal government. DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS 980601 ------------------------------------------------------------------- Economic cost of the N-explosions ------------------------------------------------------------------- Sultan Ahmed NOW THAT Pakistan has exploded five nuclear devices and come on par with India what will be the kind of economic punishment administered to us by the Western leaders who counselled against the testing? Which of the states will apply the sanctions, what will be the range of instruments chosen, or exceptions made and how long will they be valid? Will they, for example, come to an end if India and Pakistan signed the Comprehensive Test Ban Treaty and the Non-Proliferation Treaty as the Western leaders have been wanting, before or after the five Indian and Pakistani tests? Pakistan on its part has been consistent in its stand it will sign the treaties the day India signed them. But India is now quibbling and says it will sign some parts of the CTBT and insist on renegotiating some parts of the treaty with the avowed aim of destroying the nuclear stockpiles of the five nuclear weapons states. Unlike what is generally believed, Pakistan did not have total sanctions earlier since 1990 but only partial sanctions even from the US. While it suspended all military and economic aid and military sales it did not bar the World Bank, IMF and the Asian Development Bank from extending their assistance to Pakistan. And Japan which has emerged the largest aid-giver to Pakistan following the US withdrawal, did not impose any sanctions against Pakistan, but now it will, as the Prime Minister had indicated before and after Pakistan's explosions. Britain and France will not apply sanctions against Pakistan. They said the same earlier about in response to the Indian explosions. Russia will not apply sanctions on India and its cooperation with Pakistan is very limited. Germany has now made it clear it will not apply sanctions against India or Pakistan. So Pakistan has some breathing space. But when it comes to the US it will now vote against assistance by the World Bank, IMF and Asian Development Bank. Several other western countries may join it in the governing bodies of these multilateral aid institutions. The World Bank is now scheduled to give 750 million dollars, and the rest of the 1.6 billion dollar loans from the IMF after two trenches of 208 million and 180 million dollar maybe frozen. The aid of 1.8 billion dollars to be provided by the Asian Development Bank between now and the year 2000 may also be frozen. The credit guarantee of 293 million dollars to be provided to Pakistan by the EXIMP Bank of the US will also be suspended. Along with that the OPIC guarantees for US investments in Pakistan will remain suspended as it was for long from 1990, and that will discourage US investment in Pakistan in a big way. However US credit for import of wheat, and soyabean under the PL 480 will continue. And that is helpful to Pakistan which has been importing 2 millions tonnes of wheat for some years along with limited quantities of soya bean oil. What is certain now, as finance minister Sartaj Aziz has asserted after the explosions, that the over nine billion dollar aid in the pipeline on which Pakistan has been paying nominal interest be available to Pakistan. But the problem is most of the aid has been held up as the matching rupee funds are not available, and sometimes the projects are not ready. Pakistan has now to mobilise such rupees resources to be able to use these blocked funds. India too faces a similar situation with similar quantity of aid in the pipeline. Stopping of Japanese aid to the extent of 500 million dollars a year can be truly hurtful to Pakistan. That credit is cheap and made available on easy terms. Will some of the Arab countries, particularly oil states, come up with large assistance? In recent years their assistance or loans have been small and they had now been hit hard by the fall in world oil prices by 40 per cent. Oil experts now say that oil prices would remain depressed for a few years because of over-production and fall in demand, particularly after the East Asian crisis began. The fall in world oil prices is, indeed, very helpful to Pakistan and has reduced its oil import bill and the balance of payments deficit considerably and it has enabled the collection of large revenues as development surcharges which are in fact revenue surcharges. China will continue to assist Pakistan to the extent possible as it holds India as the Primary culprit in the nuclear area. Indian leaders have held China's nuclear capability or nuclear threat as a major reason for exploding their five bombs on May 11 and 13. But we have to manage its aaid really well, and productively, and not disappoint China in our methods of aid utilization. When it comes to the US it is not loss of direct aid which we have not been getting sine 1990 which can be hurtful to Pakistan as much as the bar on US investment after the US emerged recently as the largest investor in Pakistan. Without the EXIMP credit, OPIC guarantees and general official approval of support for investment in Pakistan, the US investors will not be forthcoming. And Pakistan has made things far worse in the foreign investment area by the manner it mindlessly entangled with the 21 Independent Power Producers and eventually by the outrageous manner our officials behaved with the staff of HUBCO recently. Meanwhile Pakistan is trying to conserve the dollar deposits of Pakistanis in Pakistan which total 11 billion dollars by freezing those accounts promptly and saying the depositors could draw those amounts in rupees. Many depositors hold this a gross breach of trust, but the fact is if the depositors try to withdraw their funds, neither the banks nor the government, which has only $1,386 million foreign exchange reserves, has the money to spare. In fact, the banks gave the money to the government which used that up and has only over $1 billion in its reserves. Hence the prompt action. DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS 980605 ------------------------------------------------------------------- Inter-banks cheque clearance automated ------------------------------------------------------------------- Reporter KARACHI, June 4: Inter-banks cheque clearance in Karachi has now become fully automated and computerized. Bankers say about 57,000 to 60,000 cheques issued by all the 45 banks and their 700 branches operating in the city are being cleared every day through automated computerized system. Automated cheque clearance system replaces the age-old practice of commercial banks' representatives gathering every morning at Clearing House of the State Bank, where cheques were manually handed over to the banks on which they were drawn by those who collected it. For those account holders, who deposited these cheques, it used to take two to three days to collect the amount. "You should now get the payment of such inter-banks clearance cheques next day you deposit at your bank", Anwar Samad, a former senior executive of Habib Bank who was associated with the automatic cheques clearance project since 1995 informed Dawn. After retirement, Anwar Samad is now a director of Automated Business Services (ABS). ABS has provided technical infrastructure to the National Institutional Felicitations Technologies (NIFT). NIFT is doing the job of inter-bank clearance and also inter- branches cheques clearance. "Not only cheques, but all payment instruments that include pay orders, demand drafts, dividend warrants are being processed and cleared through the automated system," he said. Bankers say that the present system benefits their clients as they get prompt payment of the cheques or any other payment instruments drawn on banks other than where they have accounts. The system is also reported to be proving a boon for the banks in terms of saving of manpower and expenditure on clearing of cheques. DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS 980605 ------------------------------------------------------------------- Reserves fall by $101m ------------------------------------------------------------------- Reporter KARACHI, June 4: Pakistan's foreign exchange reserves fell by $101 million to about $1.271 billion on May 30 from about $1.372 billion on May 23. The State Bank said on Thursday Pakistan had approved foreign exchange reserves worth $873.8 million whereas its balances held abroad stood around $397.4 million on May 30. A week ago the two figures were quoted around $910.2 million and $461.6 million. Bankers link the fall in the reserves to lesser inflow export proceeds and remittances and a stand-still in inflow of foreign currency swap funds vis-a-vis increased imports and outflow of funds on maturity. They say had the government not closed banks on May 29 after conducting five nuclear tests on May 28 the reserves would have fallen drastically. The government and the State Bank have taken a number of steps including a ban on withdrawals from foreign currency accounts to keep the reserves from falling. Bankers say the reserves position of the next week (May 31-June 6) would show how effective these measures are. DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS 980603 ------------------------------------------------------------------- Sanctions increase business risks ------------------------------------------------------------------- Reporter LAHORE, June 2: The international economic sanctions clamped on Pakistan after it carried out nuclear tests on Thursday appear to have increased both the business and financial risks for local corporate entities, Pakistan Credit Rating Agency (PACRA) said on Monday. PACRA, however, said it was 'too early to determine the extent of risk enhancement of each rated entity because that depended on the impact and duration of economic sanctions already imposed and those being contemplated'. Moreover, PACRA said, it recognized the overall adverse impact of the changing economic scenario on the operating environment. 'This element will be duly factored into PACRA evaluation for all ratings currently under process.' In reply to inquiries about PACRA's intentions to downgrade already notified ratings consequent to lowering of Pakistan's sovereign and foreign currency deposit ratings, its Managing Director Javed Masud said: "the PACRA ratings are domestic ratings, that is, local currency obligations. Therefore, these ratings do not take into account the potential transfer or convertibility risk which may exist for foreign currency obligations." Therefore, he said, the rating downgrade as notified by Moody's did not necessarily impact on domestic ratings in the country as notified by PACRA from time to time. PACRA does not intend to notify 'rating alert' across the board. However, it will continue to actively monitor the changing economic scenario, and where it feels that rating needs to be reviewed, such ratings would be put on 'rating alert' pending a formal review. DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS 980603 ------------------------------------------------------------------- $88 million withdrawn from forex accounts ------------------------------------------------------------------- Reporter KARACHI, June 2: A sum of $88 million is reported to have been drawn from the foreign exchange currency accounts during May 25 to May 28, banking circles reveal. On May 28, the day when Pakistan blasted nuclear device in response to five nuclear explosions by India earlier on May 11 and 13, the government put a clamp on the foreign exchange accounts. Banking circles say that a few senior bankers associated with the privatized, private and foreign banks anticipated the oncoming measures and informed their clients and obliged them by offering various outlets for drawing foreign exchange from their accounts. Even on the day, May 28, after the government made midnight announcement to suspend operations of the foreign currency accounts, branches of a number of privatized, private and foreign banks remained open till early hours of Friday. Banking circles name a prominent foreign bank in Pakistan that has branches in Lahore and Islamabad apart from Karachi which went out of the way to oblige its clients. This bank offers a variety of services and products to its clients in Pakistan which many others do not. A privatized bank is also reported to have been involved and one of its branches in Karachi was seen functioning on May 28 and 29 midnight by the State Bank inspectors. Another bank, a private bank is also reported to have obliged its clients till early hours of Friday in withdrawing foreign currencies from their accounts. The Inspection Branch of State Bank is understood to have gathered all the facts. DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS 980603 ------------------------------------------------------------------- Punjab sees Rs8bn cut in next budget ------------------------------------------------------------------- Shaukat Ali LAHORE, June 2: The Punjab government believed to have undertaken drastic changes in the proposed provincial budget for the fiscal year 1998-99 under instructions from Islamabad, which wants all the provinces to reduce expenditure by about 50 per cent, informed sources said here on Tuesday. The province's finance officials, hope to slash the non- development budget by around Rs8 billion. Similarly, the size of the Punjab's Annual Development Programme is being brought down by about Rs 550 million. Actual ADP size was said to be around Rs 10.3 billion for 1998-99. Only a few days ago the government had announced that it would not compromise on the development sector in its current austerity drive. Sources close to the budget making process told Dawn that a fresh summary of the ADP break-up, showing cuts in the proposed development expenditures, had been prepared and would be discussed in the next provincial cabinet meeting to be held within a few days. "Although the Public Sector Development Programme of the federal government has set aside Rs32 billion for the development sector of different provinces for 1998-99, projecting an increase of Rs6 billion over the current financial year's allocation, there is hardly any net gain in economic terms for the federating units keeping in view the inflation rate. As such, the development sector is bound to suffer. A good number of new development schemes in the latest ADP proposals may be dropped as a result," sources at the Punjab finance department said. The Punjab Planning and Development Board, which has been assigned with the task of re-structuring proposals for the next provincial budget by squeezing funds, is mapping out details for every department where savings are possible. The government, sources said, might abolish some grade 20 and above posts, ban purchase of durable goods and uplifting of offices which in recent years had become an obsession with senior bureaucrats whenever they were transferred from one office to another. Cutting down the number of new development schemes, according to sources, is a hard decision for the government to take as provincial legislators have been building pressure on the government to approve the schemes for their respective areas. Till only two weeks ago the MPAs knew details of the new schemes about which they also took people of their respective constituencies into confidence. But the new situation may cause embarrassment for them, they added. Nonetheless, as the summary indicates, the government will spend around Rs8.5 billion on the new development schemes and the rest will be utilized on the on-going projects. "The government, despite the odd situation, is however determined not to compromise on building roads and bridges linking major Punjab cities for this is the area which has long been neglected and hampered the province's development", sources pointed out saying that about 20 per cent of the total development budget would be spent on infrastructure development during the next fiscal year. Under the new instructions, each and every provincial government department is making adjustments in their allocation of resources in close coordination with the Punjab Planning and Development Board. DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS 980531 ------------------------------------------------------------------- Move to end dollarization of economy? ------------------------------------------------------------------- Sabihuddin Ghausi KARACHI, May 30: A midnight clamp-down on foreign currency accounts (on Thursday/Friday night in the wake of Pakistan's five nuclear explosions on May 28) under the umbrella of "emergency laws" has raised a very pertinent question. "Is this the beginning of de-dollarization of the national economy"? The question is being raised because account holders have been denied payment in the foreign currency in which they had opened the accounts, but also because there is a restriction on opening up of new foreign currency accounts. "Is this the end of the scheme?". This question, too, is also being raised in response to the strong comments made recently by the IMF and the World Bank against the foreign currency accounts. None other than the CBR chairman, Moeenuddin Khan, in a meeting of Management Association of Pakistan recently held in Karachi, also made two candid observations on foreign currency accounts, which are sort of loud thinking of the decision-makers in Islamabad. He had said the deposits amounting to about $11 billion are a liability on the government against the $1.3 billion reserve which is not a very enviable situation. Almost $11 billion deposits in terms of local currency amounts to well over Rs500 billion and is equal to the size of Pakistan's annual budget, which is outside tax net and a source of creating distortion in the economy. Contacts with a top executive of a leading multinational, local businessmen, a senior banker of nationalized bank and two executives of private banks to solicit their views showed that none was clear in their perception for the future. All, however, agree that government's decision to stop foreign currency payment to depositors was practical and pragmatic. But no one foresees whether it would eventually lead to shrinking of this scheme or it is a stop gap arrangement to overcome the present uncertain situation. DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS 980602 ------------------------------------------------------------------- 50pc cut in expenditure impossible to apply ------------------------------------------------------------------- Sabihuddin Ghausi KARACHI, June 1: The provinces are finding it almost impossible to implement the decision of the National Economic Council of applying a 50 per cent cut on their current expenditure budgets. The NEC, during its meeting last week in Islamabad with the prime minister in chair, decided to apply a 50 per cent cut across the board on non-development expenditure. However, the salaries and pensions are exempted from this cut. Suffering heavy cuts in their share of fund from the Federal Divisible Pool for two consecutive years, the provinces had already slashed down considerably, their present expenditure in the current fiscal year. This forced cut, according to a well placed source in Sindh government, had rendered key services like education, healthcare, irrigation and agricultural extension services almost inoperative. In Sindh, almost 50 per cent of the total budget is consumed by salaries and pensions. While 25 per cent goes for debt servicing to Islamabad and it is in the remaining 25 per cent that development and maintenance of existing stocks is taken up. For example in current fiscal year Sindh expects to receive about Rs 26 billion by the end of this month, as its share in the pool. It is about Rs 6 billion less than Rs 32 billion promised at the beginning of the current fiscal year. The 1997 National Finance Commission award had projected a total transfer of Rs 39 billion. In addition to Rs 26 billion, Sindh was expected to raise Rs 7.9 billion from its taxes and non-tax revenues. Total revenue generation in Sindh is now expected to be Rs 7 billion. Islamabad provided capital development loan of Rs 3.75 billion to finance the Annual Development Programme and Rs 2 billion for Tameer-e-Sindh Programme. Total development outlay in 1997-98 is estimated at over Rs 8 billion. >From these total resources of about Rs 38.75 billion, a sum of Rs 19.2 billion was spent on salaries of 448,000 employees and pension for the retired servants. A sum of Rs 10 billion was deducted at source to service Islamabad's loans which amount to about Rs 80 billion. For financing development programme and to meet operational cost of various provincial services, Sindh government is understood to have borrowed more than Rs 3 billion from the State Bank this year. For next fiscal year 1998-99, Sindh has been promised Rs 36 billion as against 1997 NFC award projection of Rs 42.5 billion. The province is also expected to take up a development work of Rs 3.9 billion. The planners in Sindh have no idea whether Islamabad would provide loan to finance this development outlay or it would have to be generated by the provincial government. However, Islamabad has promised Rs 1 billion for Tameer-e-Sindh next fiscal year. All the four provinces were forced to cut down heavily on their current expenditure in the current fiscal year of 1997-98. A high- level meeting presided over by the Finance Minister, Sartaj Aziz in March this year had reviewed the provincial expenditure of all the four provinces during July 1997 to January 1998. Punjab was found to have slashed down its expenditure by Rs 15.8 billion. Its total expenditure budget was Rs 80.66 billion and its proportionate expenditure was Rs 47.05 billion but had spent only Rs 31.21 billion. So was the case with Sindh which was forced to save Rs 5.24 billion as its expenditure was Rs 18.7 billion against budget estimate of Rs 23.94 billion. Balochistan too, cut down its expenditure by Rs 1.96 billion and NWFP Rs 6.54 billion. Now, the federal government wants all the four provinces to maintain same level of expenditure and has advised to take up modest scale development plans. DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS 980606 ------------------------------------------------------------------- KSE index recovers 31.01 points on buying in Hub-Power ------------------------------------------------------------------- Reporter KARACHI, June 5: Leading shares came in for strong short-covering at the lower levels boosted apparently by strength of Hub-Power and PTCL. The KSE 100-share index recovered 31.01 points at 1,087.51 as compared to 1,056.50 a day earlier, indicating that it might breach the barrier of 1,100 points when trading resumes on next Monday. On technical grounds also the market needs a breather and that could be extended in the coming week, some dealers said. "The recovery could be very slow and progressive as no one is ready to ride bandwagon without taking into consideration the external factor, notably after the nuclear tests carried by both Pakistan and India," they added. The market advance was led by heavy buying in Hub-Power on news that the Supreme Court has modified interim order of the Lahore High Court confining it to only repatriation of profits and allowed WAPDA to pay Rs 845 million each month to it in addition to the energy cost. "The uncertainty on the IPP tariff issue might not be over as the apex court order on Hub-Power petition seems to have allayed many fears entertained by foreign sponsors," some analysts said. After opening at Rs 19.10, Hub-Power steadily advanced to hit the peak of Rs 23.50 after the news of apex court order on its petition reached the rings. Weekend profit-selling, however, brought it down to close at Rs 21.50, up Rs 2.40 on 8 million shares. Other current favourites, notably PTCL and ICI Pakistan, followed it pushing the market in the plus column despite bearish predictions by some analysts. "Whether or not the market sustains the weekend snap rally is anybody's guess but some analysts say the prime minister package could give it much-needed push." They said an air of optimism prevailed in the rings ahead of prime minister's new agenda to meet the challenge of sanctions. Although there could hardly be anything for the share business, as the agenda could lead to some more taxes to make up the shortfall of funds caused by an expected decline in the inflow of foreign aid, some brokers made anticipatory buying to sell at higher levels. However, unlike previous sessions, speculative forces were not that active and mostly played safe keeping most of the options open for the next week. Moreover, the weekend rally always paves the way for a sustained run-up next week as technically-inspired buying manifests itself in a bigger way, they added. All the sectors, notably bank, energy, chemical and pharma, participated in the run-up and there are reasons to believe that their lower levels could attract any amount of technical buying provided there is no external bad news. Big gainers were led by Capital Securities, Adamjee Insurance, Hub- Power, Business Insurance, Fauji Fertilizer, Reckitt and Colman and PSO, which posted gains ranging from Rs 1.75 to Rs 7. Losers were led by Telecard and Shell Pakistan, falling by Rs 3.50 to Rs 11 on active selling, followed by Gadoon Textiles, Al-Faysal Bank, Mitchell's Fruits and Gul Ahmed Textiles. Trading volume fell to 46 million shares from the previous 81 million shares, while gainers outpaced losers by 51 to 37 with 29 holding on to the last levels. ICI Pakistan again topped the list of most actives, up 75 paisa on 26.301 million shares, followed by Hub-Power, higher Rs 2.40 on 8.181 million shares, PTCL, up 65 paisa on 3.223 million shares, FFC-Jordan Fertilizer, firm 80 paisa on 2.111 million shares, Al- Ghazi Tractors, easy 50 paisa on 1.251 million shares, and Faysal Bank, up 45 paisa on 0.681 million shares. Other actively traded shares were led by KESC, up 20 paisa on 0.881 million shares, Southern Electric, firm 45 paisa on 0.412 million shares, Sui Southern, firm five paisa on 0.389 million shares, Sui Northern, steady also by five paisa on 0.336 million shares, Engro Chemical, higher 50 paisa on 0.268 million shares, and D.G. Khan Cement, unchanged on 0.259 million shares. DEFAULTING COMPANIES: Bolan Casting was the only share which came in for trading on this counter and was quoted lower on 500 shares.
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EDITORIALS & FEATURES 980531 ------------------------------------------------------------------- Anthropoids ------------------------------------------------------------------- Ardeshir Cowasjee THE anthropoids across the border measured our tails, and were happy to conclude that they were longer than their own. We anthropoids in turn measured their tails, and concluded that ours were shorter. Both are happy, and claim popular support for their findings. The blame for where we now find ourselves lies squarely and fairly on us, the people, the overwhelming majority of whom accept meekly and mildly whatever is pushed down their throats by their leaders- cum-rulers who laze around in Islamabad, robbing them, impoverishing them. But it is the people who elect these men and women, it is the people who elevate them to the pedestals upon which they perch. We must try briefly for one moment to to be honest and ask ourselves two hypothetical questions: Firstly, were all those who have been alternately in power and in the opposition since 1988 to be herded together in the National Assembly and in the Senate, and were God in His infinite wisdom, mellowed by His infinite mercy, to send down a bolt of lightning to blow up parliament building with them in it, would we, the people, be better or worse off? Secondly, were the crimes and misdemeanours of all those in all the jails of Pakistan added together into one total sum, and were all the crimes and brigandage of those who have robbed, pillaged, misgoverned and maladministered us since 1988, and yet remain free, also added up into one total sum, which would outweigh the other? Which lot is it, in ratio to the crimes committed, who should rightly be incarcerated? Back from hypothesis to the cold earth of the Motherland and to reality. We are bankrupt (here I plead with my editor not to use his blue pen and add 'almost' before bankrupt). We just cannot earn any more. Every vital utility costs more by the day. For years, not a cent of remunerative investment has come in apart from buns and burgers, pizzas, fried chickens, chips, colas, ice-cream in short, junk enabling foreigners to bring in one dollar and take out six. It is fine to boast that we can eat grass, but then is there enough grass for the 140 millions to munch? Certainly not in any of our cities. There is not sufficient water to drink, let alone to grow grass. All that can save us is thrift. The poor man, the common man, knows Mr Micawber was right: "Annual income #20, annual expenditure #19. 19s. 6d., result happiness. Annual income #20, annual expenditure #20. 0s. 6d., result misery." The government must cut its spending, what it terms developmental as well as non- developmental, and concentrate on providing potable water, and health care, and building schools. On Friday night, on PTV, Spin Doctor Mushahid was shown outside the turreted and domed prime-ministerial secretariat informing us of the prime minister's "measured and mature" response to the emergency, his decision to shut this particular shop. Apart from the fact that this monstrosity should never have been built, and that Nawaz Sharif should never have moved in, he has now actually done the right thing, late though it may be. The next immediate step is to hand back to the bankrupt national airline the Boeing 737 which he uses each weekend to go home to Model Town. The financial crash was anticipated, and financial ordinances one can bear with. But there was no valid reason whatsoever to declare a State of Emergency and to suspend the fundamental rights guaranteed by the Constitution. The anthropoids over the other side did not deem this to be necessary. Why should we let them get the better of us and be one step ahead? Having imposed the Emergency upon the country, under Article 232, the president has issued an order under Article 233(2) by which "the right to move any court, including a High Court and the Supreme Court for the enforcement of all the Fundamental Rights conferred by Chapter I of Part II of the Constitution, and all proceedings pending in any court which are for the enforcement of any of the said rights, shall remain suspended for the period during which the said proclamation is in force." Suspended is Article 8, which holds laws inconsistent with or in derogation of fundamental rights to be void. Suspended are the fundamental rights guaranteed by Articles 9, "No person shall be deprived of life or liberty save in accordance with law"; 10, safeguards as to arrest and detention; 11, prohibition of slavery, forced labour and child labour; 12, protection against retrospective punishment; 13, protection against double jeopardy, i.e double punishment, and self-incrimination; 14, "the dignity of man and, subject to law, the privacy of home, shall be inviolable," and "no person shall be subjected to torture"; 15, freedom of movement, the right to reside and move about freely throughout Pakistan; 16, freedom of assembly; 17, freedom of association; 18, freedom of trade, business or profession, "every citizen shall have the right to enter upon any lawful profession or occupation, and to conduct any lawful trade or business"; 19, " . . the right to freedom of speech and expression, and there shall be freedom of the press"; Also suspensed are Articles 20, "every citizen shall have the right to profess, practise and propogate his religion," and "shall have the right to establish, maintain and manage [his] religious institutions"; 21, safeguard against taxation for purposes of any particular religion; 22, "none will be required to receive religious instruction, or take part in any religious ceremony, or attend religious worship, if such instruction, ceremony or worship relates to a relgion other than his own" etc; 23, "the right to acquire, hold and dispose of property in any part of Pakistan"; 24, deprivation of a citizen's property; 25, equality of citizens; 26, non-discrimination in resepct of access to public places; 27, safeguard against discrimination in services; 28, the right of every citizen to have a distinct language, script and culture and the right to preserve and promote the same. As it is, much of the legislation enacted by Nawaz Sharif's government is anti-people and violative of human rights, and is under challenge before the superior courts. The courts have already struck down a significant part of the Anti-Terrorism Act and watered down the 14th Amendment. Now, the government, through the imposition of the Emergency, has protected all its unconstitutional legislation from judicial scrutiny. This is draconian. The suspension of fundamental rights is uncalled for. "Niyet bud ast," as has already been written by the discerning. The inherent fascistic tendencies have now truly come to the fore. We cannot suffer a dictatorship, we do not want to live in a police state, we cannot allow ourselves to be dragged down any further. If this 'elected' government cannot govern as decreed by the Constitution, without suspending the costitutionally guaranteed fundamental rights, then it must admit its incompetence and go. First things first: the people must agitate, must protest, whilst firmly remaining within the realms of law. Our fundamental rights must be restored to us. The prevailing conditions and the desperation of the government necessitate that we remain protected as guaranteed. DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS 980606 ------------------------------------------------------------------- Madness in May ------------------------------------------------------------------- Irfan Husain THE 1965 Indo-Pakistan war threw up a number of jokes. My favourite was the one about the meeting between officers of the opposing armies on the ceasefire line in the immediate aftermath of the fighting: The senior Indian officer, a Sikh, asked his Pakistani counterpart, an old friend who had been to Sandhurst with him: "Yaar, we Sardarjis are supposed to go mad at mid-day; but what happened to you guys?" What, indeed? This rhetorical question is more relevant today in the wake of the tit-for-tat nuclear tests we conducted last week than it was nearly 33 years ago. With eyes wide open, we have stumbled into a trap out of which there seems no escape. The people who danced with joy in the streets of Pakistan's cities have little idea of the high price they will have to pay for their short-lived celebrations. And let us make no mistake about it: it is the common man who will have to bear the brunt of the sweeping economic sanctions we face. When food grows scarce and prices shoot up, those who took the decision to push the button will still be able to afford all the luxuries they enjoy today, Nawaz Sharif's brave words notwithstanding. After all, his children have never shared the miserable existence that is the average Pakistani's lot, so why should they start now? For the week preceding the tests, I had been travelling abroad. All the people I met expressed their disgust at India over its recent nuclear chest-thumping, and said how impressed they were with Pakistan's mature and measured response. While agreeing, I crossed my fingers in my pockets. Then, I learned that, as I had feared, Pakistan had been unable to resist following India's bad example. While I have been a proponent of the Internet, there are times I wish it did not exist. Normally, when I am abroad, I take enormous pleasure from the fact that I am out of reach of the Pakistani media, and hence out of touch with the hurly-burly of our national affairs. But after the recent round of madness in South Asia, I must confess to reading the Internet edition of this newspaper every day, and getting more and more depressed. The British and American newspapers have been full of hypocritical cant about how awful it was for the two poorest states in the world to waste billions on nuclear weapons, conveniently forgetting that these same countries had sold billions of dollars worth of conventional arms to India and Pakistan over the years. The message seemed to be that while it was OK for us to kill each other with guns supplied by them, it was immoral to develop weapons that might affect their comfortable lives. Also, no commentator said anything about Israel's surreptitious acquisition of nuclear weapons with Western help. So my opposition to our tests has nothing to do with international public opinion. Basically, we should make policies in our own best interests, but I refuse to believe that by blindly following India's example, we have in any way enhanced our security. Over the years, Pakistan's policy-makers have stuck to a very narrow interpretation of security: for them, it has mostly been limited to the physical boundaries of the state. Far too often, ideologues have voiced concern for our spiritual security as well, citing the Internet and the satellite television broadcasts from India and the West as threats to our moral wellbeing. We tend to lose sight of the economic and social dimensions of security. If the country is confronted with fiscal meltdown as it clearly is now then surely our nuclear arsenal becomes an expensive irrelevance. A major reason for the collapse of the Soviet Union was that in the final analysis, it could not keep up with the United States in military spending, and the strain of trying to match its adversary's high-tech weaponry finally became too much. The same dynamics appear to be propelling us to financial suicide. Before the tests, the finance ministry had projected our requirement for foreign assistance in the next budget at five billion dollars, and despite a good wheat harvest, we still need to import two million tons. By the end of the year, we will need around three billion dollars to service various foreign loans. If we default, no private bank will lend us a penny, no letters of credit will be opened for imports, and the rupee will be in free fall, much as the Indonesian rupiah has been in recent weeks. To overcome this financial crisis, the government has announced a special fund to which overseas Pakistanis will be urged to contribute. Now why anybody in his right mind would wish to contribute a penny to such a dicey venture is beyond me. We have been informed that the government is going to launch an "austerity drive." Considering that nearly 90 per cent of the federal budget goes towards defence and debt servicing over which no civilian government has any control, it is hard to see where the government will save money from. As things stand, it is barely able to pay salaries, so it is difficult to imagine that these feeble measures will enable the government to meet the yawning gap between income and expenditure. Had we not tested, we would still have been a nuclear power and we could have squeezed some financial and political gains by occupying the moral high ground, apart from isolating India. As it is, we have entered the dangerous and uncharted territory of an open nuclear stand-off in which there will be enormous pressure to go nuclear as soon as there is a perceived threat on the "use it or lose it" principle. True, India was the first to raise the stakes, but just because the revanchist, reactionary BJP government in New Delhi behaves in this illogical manner should not mean that we follow suit. But now that we have done the macho thing and exploded half-a-dozen devices, what prevents us from unilaterally signing the Comprehensive Test Ban Treaty? Or do our leaders want to keep the option of more tests if India indulges in another round of explosions? Surely enough is enough. If we can negotiate an end to sanctions as the price for signing the CTBT and the NPT, we should be grown up enough to do so, and stop chanting the mantra of "India must sign first." DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS 980601 ------------------------------------------------------------------- Eating grass ------------------------------------------------------------------- Omar Kureishi DURING the World Cup 1996 in Australia, our High Commissioner Bashir Babar invited a few members of the Pakistan cricket team and me to lunch at a very posh Chinese restaurant that overlooked the Sydney Opera House. The view was breathtaking and the prices on the menu suggested that the restaurant was levying a surcharge for the view. The first course of our lunch consisted of some finely shredded green vegetable that looked suspiciously like blades of grass. Wasim Akram who was seated next to me asked me what it was. I told him that it looked and tasted like grass. Wasim then announced to his team-mates in Punjabi that we were eating grass. Albeit, very expensive grass. Then again, driving from Adelaide to the Barossa Valley, I cam across a field of blue grass. So there is grass and grass, one which is served in expensive Chinese restaurants and the other kind on which horses and cows and even goats nibble. And now that we have exploded our nuclear devices, the test has come for those who were prepared to eat grass. But what kind of grass did they have in mind? It is apparent that tough times lie ahead and once again the nation is being asked to make sacrifices. I have not the slightest doubt that the people will make any sacrifices asked but a majority of the people already have their backs to the wall and for them two square meals a day is something of a feast and you can't get blood out of a stone. The sacrifices, therefore, will have to be made by the moneyed classes which includes the ruling elite. They will have to set a high personal example, not a token or symbolic example but one in thought, word and deed. Austerity will have to begin with them and it will not only have to be practised but seen to be practised. The Prime Minister has made a promising beginning by vacating his opulent secretariat but a colossal sum of money has already been spent on its construction and its decoration. Still, the building can be put to some good use. It could be turned into a museum or converted into a hotel. But much more than this is required. This is a golden opportunity to dismantle the VIP culture. Some severe cost-cutting will have to be done in the establishment strength of leaders who have become accustomed to a life-style that is out of sync with these democratic and egalitarian times. Members of the national and provincial assemblies themselves should give up their perks and privileges. This will allow them also to get closer to their constituents and if their constituents don't have safe drinking water, they too should drink from the same tap as their constituents. There should be a total ban on motorcades and one does not want to see a procession of cars with outriders and sirens wailing and traffic stopped whenever a VIP decides to move from point A to point B. This is a costly exercise but more than that it seems to be mocking the public, a show of grandeur that is one of the causes of alienation. In Karachi, I would humbly suggest that generators in the offices and residences of the Governor, Chief Minister, Ministers, Secretaries of the Government and the Managing Director of KESC be removed so that when there is a power failure they are made to feel the heat. I think you will find that this will do wonders and the performance of the KESC would miraculously improve. Austerity has to be meaningful, not cosmetic. And this is not the time for grandstanding, for a cascade of brave and fighting words but for re-shaping the contours of the social agenda. Perhaps, it should be called the human agenda. The people have come out four- square behind the decision to go nuclear publicly. This has nothing to do with national pride as foreign commentators are claiming. It has to with national security. The Indians having carried out their own tests should have left it at that. Instead, intoxicated by their supposed military machismo, the Indian leaders went on an orgy of bluff and bluster and provocation and intimidation. They have behaved like bully-boys, leaders of street gangs. They upped the ante and the build-up of their troops on the Line of Control, seemed poised to attack. They gravely miscalculated the resolve of the Pakistan people. The world has not understood that Pakistan went nuclear as a measure of self-defence. Thus it cannot be equated with India. The condemnations that are coming from the world's capitals are first reactions, kneejerk in character. They must be told the compelling reasons why we did what we did. There is no doubt that sanctions will hurt and bite but who knows this may be a God-given opportunity to heal political wounds and build a national consensus on issues of vital interests. Politics need not be divisive. It need not tear us apart for what divides the political factions are essentially trivial issues. This is the chance to rebuild old bridges. But austerity must be commonly shared. There is no point in asking the people to tighten their belts while our ruling class continues to wear both belts and braces. Austerity means doing without and it means a simple life. But the example must be set from the top. Eating grass is not a problem but we all must share the same meal.

SPORTS DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS 980601 ------------------------------------------------------------------- Will Mohsin Khan be able to deliver the goods? ------------------------------------------------------------------- Lateef Jafri Cricket enthusiasts had quite a surprise when the board assigned Mohsin Hasan Khan the job of conducting the training of about three dozen players, most of them in the category of senior stars, having represented the country both in the Test matches and one-dayers. His official designation will be camp commandant. As a batsman with pleasing strokes from January 1978 against England to the Test series against the West Indies in late 1986 Mohsin played a stellar role in Pakistan's cricket. He was also a crisp fielder, alert at any position. Since for the last 12 years he had withdrawn himself from the national cricketing scene one thought that he would prefer not to accept such onerous responsibility as camp commandant. But he says he was observing the ups and downs in the country's cricket fortunes and studying the forms and performances of the players. Apparently there was no need for the board to invite quite a large cluster of cricketers for such serious physical workouts during an off-season when the two insignificant tournaments in Kuala Lumpur and Nairobi have almost been struck out from the programme. But then the game's watchers point to major fitness problems to senior players, particularly on foreign trips. Physical training sessions should be welcome to keep the national cricketers and the stand- byes in top shape. Even if some of them are lethargic or are not in perfect trim they will become more active on the field after the training schedule is over in one-and a half month. Several key players like Aamir Sohail and Inzamamul Haq to name only two listed among camp invitees had at various stages found the going in competitive cricket quite hard. Their unfitness which upset the balance of the squad, even though the breach was filled by replacements. An exposure to training would also trace out the physical infirmities of the invitees, which means that their illness and injury would go through the necessary treatment earlier than during the duels at home or aboard. It is a ticklish question if Mohsin Khan will be successful in the job given to him. No doubt he was a delightful stroke-maker and perhaps none could hit the ball with such abandon and success all round the wicket as this tall and elegant-looking opener. But there was also in him a casual approach towards the game. And that is why many critics doubt if he will be able to deliver the goods. Mohsin and the cricket board have yet to strike a deal on the former's appointment and the emoluments to be given to him. That will give formality to the offer and assignment. Perhaps the designation of commandant was an easier process for a later nomination as cricket manager, which requires the endorsement of the executive council, yet to meet for sometime. Though Mohsin Khan has given his priorities for a disciplined schedule at the camp the PCB Chief Executive wants to see the results of his efforts. Then only the former Test opener can get an offer of more responsible, more testing assignment at home or away on tours. Whatever Haroon Rashid, who has just ended his contract with the PCB might think of himself, cricket circles are of the opinion that he was far from a successful coach or cricket manager. The needed guidance was hardly provided to the playing lot. The squad should have performed as a unit, but this was not so. If at all there were weaknesses in some players the coach should have seen to it that they are overcome. The humiliation to the touring set in the South African triangular was agonising as was the upset in the last Test and the tri-nation final in the golden jubilee competition in Lahore. Pakistan capitulated to South Africa in the Faisalabad Test while needing only a tiny 140. The defeat came as a nine-day wonder. The record of Haroon could not have earned him a contract renewal. It is possible he may have received prior signals from the board as he hurriedly submitted his resignation as a board appointee for he was raised to the senior managership from the junior team or perhaps he was holding a dual charge, besides being a selector. Several veteran cricketers have put forward the claims of former Test captain, Javed Miandad, for appointment on a long-term basis as a cricket manager. They have taken the return from wilderness of Mohsin Khan with a pinch of salt. Javed was a world class batsman, both in Test cricket and the limited-overs game. He was exceptionally competent, tough, rugged with audacity to cut to size any sort of attack. Miandad has several times expressed his desire to serve the country's cricket. It was time that one of the all-time great cricketers was booked by the board for the right job. The vacancy has been created by the voluntary resignation of Haroon Rashid. The PCB will not be making a U-turn after announcing a provisional appointment but it will be the right decision in view of the hard and stiff challenge the country faces in the World Cup and the heavy engagements during this year and the following one. Back to the top.

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