-------------------------------------------------------------------
DAWN WIRE SERVICE
-------------------------------------------------------------------
Week Ending : 06 June 1998 Issue : 04/22
-------------------------------------------------------------------
The DAWN Wire Service (DWS) is a free weekly news-service from
Pakistan's largest English language newspaper, the daily DAWN. DWS
offers news, analysis and features of particular interest to the
Pakistani Community on the Internet.
Extracts from DWS can be used provided that this entire header is
included at the beginning of each extract.
We encourage comments & suggestions. We can be reached at:
e-mail dws@dawn.khi.erum.com.pk
dws%dawn%khi@sdnpk.undp.org
fax +92(21) 568-3188 & 568-3801
mail Pakistan Herald Publications (Pvt.) Limited
DAWN Group of Newspapers
Haroon House, Karachi 74400, Pakistan
TO START RECEIVING DWS FREE EVERY WEEK, JUST SEND US YOUR E-MAIL
ADDRESS!
(c) Pakistan Herald Publications (Pvt.) Ltd., Pakistan - 1996
********************************************************************
*****DAWN - the Internet Edition ** DAWN - the Internet Edition*****
********************************************************************
Read DAWN - the Internet Edition on the WWW !
http://xiber.com/dawn
Pakistan's largest English language newspaper, DAWN, is now Pakistan's
first newspaper on the WWW.
DAWN - the Internet Edition will be published daily (except on Fridays and
public holidays in Pakistan) and would be available on the Web by noon GMT.
Check us out !
DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS
CONTENTS
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$88 million withdrawn from forex accounts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.
Back to the top.
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.
Dawn page