------------------------------------------------------------------- DAWN WIRE SERVICE ------------------------------------------------------------------- Week Ending : 11 July 1998 Issue : 04/27 -------------------------------------------------------------------
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CONTENTS ===================================================================
NATIONAL NEWS Stocks crash to all-time low as rupee dips Gohar wants Vajpayee to talk on Kashmir IMF team satisfied but makes no pledges Forward cover fee on $ raised to 7 percent Multi-metering on Internet calls to go from tomorrow MQM wants full role in decision making No respite from power failures Kalabagh dam strongly opposed US has no plan to bail out Pakistan --------------------------------- BUSINESS & ECONOMY KSE 100-share index crashes to all-time low CBR conference to improve tax collection Population swells to 130.58m Islamabad ready to sign no-war pact with India: FO 104 cos get ISO-9000 certification Massive outflow of funds aggravates banking crisis Restoration of business confidence demanded Moratorium on loans repayment may be sought Ehtesab Bureau seeks CBR verification on Rs25bn loss --------------------------------------- EDITORIALS & FEATURES Winter Pakistanis Ardeshir Cowasjee Hanging on Irfan Husain Karachi's web of terror M.H. Askari When they meet in Colombo Mahdi Masud ----------- SPORTS Davis Cup squad leaves for Teheran on 12th PCB approves a list not signed by selectors

Stocks crash to all-time low as rupee dips
Mohiuddin Aazim

KARACHI, July 10: The ban on release of foreign exchange for 
overseas travellers and students at the official rate coupled with 
rumours of all sorts pushed up the price of dollar to Rs59 in the 
open market on Friday.
Meanwhile, the Karachi Stock Exchange (KSE) 100-share index fell 
from 800 points to all-time low of 777.26.
On Thursday the dollar was sold for Rs54.25. Thus the rupee lost 
Rs4.75 or 8.75 per cent to a dollar within a day widening the gap 
between the official and open market rates of the green bill to 
Rs12.54 or 27 per cent. Official selling price remained unchanged 
at Rs46.46 per dollar.
As the markets opened on Friday there was a great demand for the 
dollar and other foreign currencies by people intending to travel 
abroad and the pressure kept rising as the day progressed.
Money changers said rumours of further rupee devaluation and 
Pakistan nearing default also hit the market which turned people 
crazy about buying hard currencies including the dollar.
The statement of Finance Minister Sartaj Aziz that Pakistan might 
have to seek moratorium on foreign debt payment gave weight to 
these rumours. His statement made at the end of the talks with 
visiting IMF delegation on Thursday was reported in detail on 
At the end of the day money changers were buying the dollar for 
Rs58 and selling for Rs59. On Thursday buying and selling prices 
were Rs54 and Rs54.25.
"The demand for the dollar was so high that at one point the rupee 
nose-dived to 62 to a dollar", claimed Anwar Jamal of the Galaxy 
International money-brokerage.
On Friday the prices of other major foreign currencies also rose 
sharply including the pound sterling by Rs3.20 to Rs 91; Canadian 
dollar by Rs3.05 to Rs39.40 and Kuwait dinar by Rs3.90 to Rs178.50. 
The Saudi riyal and UAE dirham were sold for Rs15.10 and Rs15.40 
respectively on Friday  up from Rs14.30 and Rs14.67 on Thursday.
Senior bankers said the State Bank had stopped selling them foreign 
exchange on Wednesday and did not resume it till Friday which made 
people believe that the devaluation of rupee was on the cards. They 
said it also fuelled rumours that importers might be asked to buy 
part of the foreign exchange they need from the open market.
"That is why the demand for the dollar shot up and the price sky-
rocketed", said senior executive of a bank.
Gohar wants Vajpayee to talk on Kashmir 

KARACHI, July 9: Foreign Minister Gohar Ayub Khan on Thursday urged 
the Indian leaders to come to Colombo with an open mind to discuss 
the core issue of Kashmir so that substantive progress is made 
towards the restoration of peace in the region.
"If there has to be security in the region and there has to be 
friendship between the two countries and we want to solve our 
problems then we must ensure substantiative progress on the core issue of
Kashmir and the Indian leadership must come with an open 
mind to Colombo," said Mr Khan while talking to newsmen at the PN 
Dockyard after the induction of Pakistani made mine-sweeper PNS 
Mujahid in Pakistan Navy.
Asked about the possibility of Prime Minister Nawaz Sharif's 
meeting with his Indian counterpart Atal Bihari Vajpayee during the 
SAARC summit in the Sri Lankan capital, the foreign minister said 
"bilateral meetings would take place on the sidelines of the 
conference and we welcome the Indian prime minister's letter to Mr 
Nawaz Sharif."
The Colombo meeting has become the focus of world attention as the 
two leaders will be coming face to face for the first time since 
India and Pakistan tested their nuclear devices.
The foreign minister was not very hopeful about the outcome of 
these meetings and referred to India's reneging on the agreement of 
June 23, 1997 between the foreign secretaries of the two countries 
in which India had agreed to put the core issue of Kashmir on the 
agenda for bilateral talks.
He also said that bilateral approach has not produced any result in 
the past and emphasised mediation by third party and referred to 
the Indus Basin Treaty for sharing river Indus waters.
Asked why Pakistan was not adopting a policy of reconciliation by 
taking other confidence building measures as was suggested by the 
former Indian prime minister I.K. Gujral, the foreign minister said 
the "whole thing is that a series of meetings with Mr Gujral have 
not led to any progress on Kashmir or any other issue during the 
past eight nine months."
He said that unless the fundamental problem is addressed the desire 
of a durable and lasting peace will not be achieved.
The foreign minister said the UN resolutions on Kashmir were not 
time barred.
Referring to Indian nuclear tests, he said, this removed the 
ambiguity with regard to Pakistan's nuclear and missile 
capabilities and proved that Pakistan's nuclear and missile 
programmes were superior to that of India.
He said Pakistan was not taking steps that would further vitiate 
the atmosphere but India was taking advantage of the situation and 
committing gross human rights violation in occupied Kashmir.
He regretted that the world leaders, despite Pakistan's repeated 
warnings, had not anticipated the Indian nuclear explosion plans.

IMF team satisfied but makes no pledges

ISLAMABAD, July 9: Pakistan faces a "major financial crisis" if a 
multi-million dollar International Monetary Fund (IMF) loan package 
is blocked because of sanctions sparked by nuclear tests, Finance 
Minister Sartaj Aziz said on Thursday.

Mr Aziz warned of the impending crisis at the end of talks with an 
IMF mission led by Paul Chabrier, amid fears Pakistan looked headed 
toward a partial moratorium on foreign debt repayments, reports 
The finance minister, speaking at a news conference also attended 
by IMF Middle East director Chabrier, said the delay in releasing 
IMF financing because of the sanctions over the nuclear tests would 
hit Pakistan's balance of payments.
A "major financial crisis...is likely to occur in Pakistan due to 
the sanctions," he said. Unless the IMF programme was activated 
quickly Pakistan would be "left with few options," Sen Aziz warned.
The IMF official linked the delay in the release of 226 million 
dollars  the second and third instalments from a 1.5 billion loan 
package agreed last year  to the "totally changed environment" in 
the wake of nuclear testing.
Chabrier said he would tell the IMF board about Pakistan's good 
economic performance in meeting macro-economic targets under the 
loan package and also of the difficulties that it faced as a result 
of the sanctions. But he declined to prejudge the response, noting 
that while the IMF was not bound by the sanctions the squeeze in 
aid by donors affected its programmes.
Mr Chabrier, director of the IMF's South Asia Operations, is due to 
brief the Group of Eight industrialised countries represented on 
the IMF board in Washington on Monday.
Mr Aziz said Prime Minister Nawaz Sharif had written to major 
industrialized powers asking for the "immediate restoration" of 
support from international financial institutions.
The finance minister announced new measures to conserve Pakistan's 
foreign exchange resources. He said the State Bank had withdrawn 
from banks the authority to make payments on account of suppliers' 
credits and other related disbursements.
Citizens would now obtain foreign exchange for travel from the open 
market and not from the central bank.
Foreign exchange requirements of all federal and provincial 
ministries would from now on be considered on a case to case basis 
and all "low priority" spending would be cut, he said.
Our Bureau adds: International Monetary Fund director Paul Chabrier 
said that IMF was not bound by international sanctions and might 
take a decision to offer assistance to Pakistan specially when it 
had met the IMF criteria to qualify for loans.
Mr Chabrier, who is here to assess the post-sanctions situation 
said he would brief the IMF headquarters on Pakistan's economic 
performance and the difficulties being faced by the country in the 
wake of sanctions.
When asked whether Pakistan had fulfilled the IMF conditionalities 
to qualify for the loan, the IMF director said Pakistan had made 
substantial progress and achieved most of the targets. He said he 
would report to the IMF management about his assessment of the 
situation in Pakistan.
To a question he said that the IMF was not bound by sanctions, but 
the G-8 countries, which opposed loans to Pakistan, were the major 
aid donors to the IMF as such their point of view was considered 
important on certain issues.
He told a reporter that the IMF had earlier completed the second 
review of the economy and found that the ESAF/EFF programme was 
being implemented satisfactorily.
Earlier, the finance minister said that during the last 16 months 
the government had been implementing a comprehensive programme of 
structural reforms and macro-economic stabilisation with support 
from the IMF as part of a $1.5 billion ESAF\EFF facility.
Forward cover fee on $ raised to 7 percent
Mohiuddin Aazim
KARACHI, July 9: The State Bank raised the forward cover fee from 
5.5 to 7 per cent on the US dollar and from 3.9 to 5.1 per cent on 
pound sterling from Thursday  July 9, 1998. It also increased the 
fee from 7.2 to 8.9 per cent on Deutsche Mark and 10.1 to 11.9 per 
cent on Japanese Yen.
Bankers said the State Bank had told them that the new rates would 
apply to foreign currency deposits mobilized or renewed or rolled 
over under the old foreign currency accounts scheme. The rates 
would not apply to the new foreign currency accounts scheme 
announced on June 20, 1998 under which banks are not supposed to 
surrender the foreign currency to the State Bank and obtain the 
forward cover.
In Pakistan, more than 80 per cent of all foreign exchange business 
is transacted in dollars and the remaining in other major foreign 
currencies including pound sterling, Deutsche Mark and Yen.
The rise in the forward cover drew an immediate reaction from the 
money market where the forward trading of the dollar for 2 months 
and more came to a halt. This coupled with the ban on the release 
of foreign exchange by the banks to the overseas travellers forced 
the rupee to shed 85 paisa to a US dollar in the kerb market. The 
move also pushed up the call rates from 10 per cent at the 
beginning of the day to 15 per cent at the close of the business as 
banks feared pressure on their rupee resources in the wake of 
increased conversion of foreign currency deposits into rupees.
Senior bankers say the increase in the forward cover fee is aimed 
at compelling the banks to convert the foreign currency deposits 
into rupees to help the government reduce its foreign exchange 
Forward cover fee is the fee charged by the State Bank for booking 
exchange rates of foreign currency deposits at a given level for a 
specified period. The increase in the fee would make these deposits 
costlier compelling the banks to cut the profit paid to the deposit 
holders which would accelerate their conversion into rupees.

Multi-metering on Internet calls to go from tomorrow
Anjum Herald Gill

LAHORE, July 5: The Internet subscribers will be exempted from 
multi-metering from July 7, says federal communications secretary 
Muhammad Akram Sheikh.

While talking to Dawn on Sunday, Mr Sheikh said the government was 
in favour of encouraging the Internet users, and would provide them 
more facilities.

Lahore Telecom's south region general manager Sheikh Afzal, who 
assisted the communications secretary during the talk, said the 
discrimination between digital and non-digital telephone 
subscribers regarding metering of calls would end within two to 
three months.

He said the PTCL authorities would now allot different codes to 
Internet service providers.

Mr Sheikh said the PTCL's privatization would be finalized within 
next six to nine months. He said the home work in this regard had 
already been done.

He said the video conferencing and pre-paid card system would be 
introduced by the end of this year.

The communications secretary said he wanted to improve the 
efficiency of the PTCL staff. He said he had been holding review 
meetings with the PTCL authorities and other departments in their 
offices to monitor the targets set by the government.

MQM wants full role in decision making
Bureau Report

ISLAMABAD, July 6: Muttahida Qaumi Movement (MQM) has sought the 
full partner status with the PML in Sindh to "remove their 
differences and establish permanent peace in Karachi."
A four-member MQM delegation headed by Senator Aftab Sheikh held a 
detailed meeting with the minister for petroleum and provincial 
coordination, Chaudhry Nisar Ali Khan, and Chief Minister Liaquat 
Jatoi on Monday and demanded the assurance that the MQM would be 
given full role in the decision making process.
"We have told them today that they will have to ensure the MQM's 
full participation in the provincial affairs because of their 
position as active coalition partners," Dr Farooq Sattar. He told 
Dawn after the meeting that the situation in Karachi was fast 
deteriorating which needed the combined efforts of the PML and the 
MQM to achieve the desired result.
He regretted that the MQM had been kept completely out of the 
recently formed two high-level committees to supervise the affairs 
of the Sindh government. "They are not taking us into confidence on 
various issues nor are they ready to accept our recommendations to 
improve the law and order situation in Karachi," he said.
"But they will have to share the authority with us in Sindh for 
running the provincial administration effectively," Dr Sattar 
Asked what was the response of Chauhdry Nisar and Mr Jatoi to the 
MQM's demands, he said certain assurances were once again given by 
them. "We do not want any bickering with our political allies and 
are still sincerely trying to sort out issues amicably so that the 
peace is restored to Karachi."

No respite from power failures

KARACHI, July 4: There was no respite in power breakdowns in many 
areas of the city on Saturday despite public outrage.
The concluding session of a six-day workshop "Recent advancement 
and use of Information Technology in Libraries" at Karachi 
University was delayed owing to a power failure at the university. 
The workshop which was scheduled to begin at 10 am started at 
Staff had to hurriedly rush to acquire a generator so that 
participants could be awarded their certificates.
University authorities said the power failure affected other 
departments where computers, air-conditioners, and fans failed.
Residents of many parts of Gulshan-i-Iqbal and Gulistan-i-Jauhar 
complained they were being subjected to power breakdown of three to 
four hours after midnight almost daily, besides the outages during 
the day time.
The general complaint is that of voltage fluctuation which has 
rendered electrical appliances almost inoperable.
Residents of Gulshan-i-Iqbal Block-2 (flat side) is deprived of 
electricity after midnight for atleast three hours regularly. All 
attempts to invite attention of the KESC staff have so far failed.
Resident allege the KESC staff was in league with the sprawling 
marriage halls on the main Rashid Minhas Road. 
KESC consumers in the Federal B Area said frequent power breakdowns 
and unannounced loadshedding have made their life miserable as they 
have to invariably live without electricity in a hot and humid 
weather for at least two to three hours at a stretch.
The residents said disgusted with the indifferent attitude of the 
KESC staff, consumers have stopped registering their complaints 
because the KESC staff just don't bother to register them.
Voltage fluctuation is another problem which has hit perturbed the 
On Saturday, consumers of block 10, 11, 12, 13, 14 & 16 of Federal 
B Area were hit by power breakdown twice, each stretching over 
three hours. The first breakdown occurred at 1.50pm. The power was 
restored at 6.15pm and then again at 7.20pm power supply was again 
disrupted, residents said.
Complaining about the breakdowns, the people also agitated over 
inflated billings without any meter-reading.
An agitated consumer said what was the moral justification of 
sending inflated bills when the KESC could not ensure regular power 
Amir Ali, a resident of Garden East, while complaining about 
frequent power breakdowns and excessive billing, urged the chief 
justice of Sindh High Court to take suo moto action against the 
He pleaded for privatising the utility which has become a big 
problem. He said the action should not be delayed because at stake 
is the peace and security of millions, not to mention of the damage 
done to the economy.
Mr Muzaffar, a resident of Bath Island, complained of frequent 
power failures and said no one at the complaint centre responded to 
his calls.
Almost everyday the area is without power from 3pm, he said.
Residents of Sector 48-A said they were facing power failures 
everyday since Tuesday. The hide and seek with electricity and 
voltage fluctuation had become a big problem.
Meanwhile, Sindh Chief Minister Liaquat Jatoi has taken serious 
notice of the power breakdowns and public outrage against the KESC 
staff's attitude.
He directed the KESC officials and Area Electricity Board Hyderabad 
to take measures ensure uninterrupted power supply.
The chief minister also called for increasing the number of 
complaint centres besides improving the performance of those 
already functioning.
He said the government is well aware of the problem faced by people 
and that contacts at higher level in the federal government are 
also being made so as to overcome the issue related to disrupted 
power supply in Karachi and other parts of Sindh.

Kalabagh dam strongly opposed

MULTAN, July 9: Pakistan Seraiki Party (PSP) has rejected the 
proposed construction of Kalabagh dam saying it is not in the best 
interests of the masses of this country.
These sentiments were expressed in the party's annual national 
council meeting held here the other day.
Addressing a huge gathering of the party workers, PSP chief Mr Taj 
Mohammad Khan Langah said it was ironical that the proposed Kalbagh 
dam had been planned to be constructed on certain parts of the 
Seraiki region but no one was talking to them (Saraikis), as 
Punjabis, Sindhis and Pakhtoons were quarrelling among themselves 
as to the merits and demerits of the plan. He warned if the point 
of view of the Seraiki region was not given due weight in this 
regard, PSP would launch an agitation movement against the 
construction of the dam. The senior vice president of the party, Mr 
Afzal Masoud, said the construction of Kalabagh dam would lead to 
the disintegration of the state as no person with foresight would 
favour this project.
US has no plan to bail out Pakistan 
Shaheen Sehbai 

WASHINGTON, July 9: A US State Department official said on Thursday 
that no plan was in the works to bail out Pakistan from its present 
economic situation.
Reacting to almost panicky reports emanating from Pakistan that the 
country was close to a default, the official told Dawn: "This is 
not a sanctions issue and Pakistan cannot expect the rest of the 
world to bail it out from a situation which has been developing for 
over 18 months."
This blunt State Department position on Pakistan's economic woes 
was seen by diplomatic experts and analysts as the result of 
conflicting messages and signals coming out of Pakistan about the 
possible impact of the sanctions and Islamabad's reaction to 
demands about signing the CTBT and other non-proliferation 
The State Department official was asked to give his comments in 
view of repeated statements made by senior administration 
officials, including Assistant Secretary of State Karl Inderfurth, 
that the US would not let the Pakistan economy collapse under the 
weight of sanctions imposed by Washington.
"We do not want to break any economy," Inderfurth has been saying, 
explaining the impact of US sanctions.
But the official reacted in a different tone on Thursday when told 
that even the finance minister of Pakistan was now talking about 
the prospect of a Pakistan default and a moratorium on its foreign 
"The sanctions imposed by the US have not had a big impact on 
Pakistan yet, there have been no votes against Pakistan in the IMF, 
they have not yet been hurt," he said.
Nevertheless, he said the State Department was discussing the issue 
with the IMF as well as the Pakistan government but "we are not 
discussing any bailout plan at this point in time."
He said the economic crunch that was being reported was not a 
creation of sanctions. "This has come because the Pakistan 
government did not undertake the reforms in the economy that were 
needed to be taken. The IMF mission is already there to assess what 
Pakistan has done, or not done, in that context and we will wait 
for their report," he said.
"There are established channels through which Pakistan and the IMF 
can have their discussions and we are also a participant in these 
discussions," he said.
Asked specifically about the prospect of a default, as it now 
appears imminent from the finance minister's statement, the 
official said: "This is a matter of speculation and we will have to 
see what happens.
"Pakistan would not have been here if they had taken the steps they 
were supposed to take," the official said, almost distancing 
himself from the sympathetic line that was evident in Inderfurth's 
recent statements.
Analysts recalled that after Pakistan's nuclear tests and when 
sanctions were imposed, Pakistani leaders deliberately made 
unsubstantiated claims and misleading statements about the impact 
of sanctions, knowing well that either these claims were wrong or 
politically motivated.
They recalled Prime Minister Nawaz Sharif's speech to a Manchester, 
UK audience on June 13 in which he said: "Pakistan is not afraid of 
any economic sanctions imposed by the international community... 
These sanctions are a blessing in disguise as these will help the 
nation stand on its own feet and become self-reliant...Till now 
sanctions have had no effect on the economy."

KSE 100-share index crashes to all-time low

KARACHI, July 10: The KSE 100-share index on Friday breached the 
psychological barrier of 800 points to fall to an all-time low 
level of 777.26 points as investors sold in panic amid rumours of 
an imminent default on foreign debt and run on the dollar.
The worst might not be over as the prevailing panic and most basic 
fundamentals point to a sustained bear-run and the developing 
situation demand some quick official corrective steps to avert an 
imminent collapse, said leading floor broker.
"The money is outflowing from the share business to gold and dollar 
as panicky investors are out to find safe havens in view of the 
developing economic uncertainty", analysts said.
The full marks to economic performance by the visiting IMF 
delegation should have lured investors back in the rings but its 
reluctance to give positive hints about the aid resumption seemed 
to have worked against the sentiment.
"The economy might not collapse as widely speculated owing to 
economic sanctions, but the vested interest has made it look like 
that after adding to the existing speculation", said a member of 
the KSE.
The index has lost about 60 per cent since Pakistan became a 
nuclear power on May 28, as it has fallen from 1500 points to 
777.26 points, wiping out Rs250 billion from the market 
capitalization at Rs237 billion, analysts said.
The financial markets are in a virtual turmoil since the central 
bank allowed travellers and students to buy dollar from the open 
market and its price soared to Rs62.00 to a dollar at one stage, 
they added.
But the chief destabilizing factor appears to be the visiting IMF 
team silence on the release of third and fourth tranche of $287 
million out of the $1.5 billion credit line agreed last year 
despite its satisfaction about the economic performance, some 
analysts said.
The index hit the previous low at 811.03 points on June 29, after 
4.4 per cent devaluation of the rupee but the breach of the 800 
barrier could take it new lows in the subsequent sessions.
"The market is passing through a very difficult period of its 
history and it is pretty difficult to predict at this stage whether 
or not the collapse is imminent", a top official of the KSE said.
Analysts said rumours of fresh 20 per cent devaluation of the rupee 
and a possible freeze on gold in the lockers and the current run on 
the dollar all point to "worst is still to come", he added.
All the blue chips, having some capital gains fell in unison as 
investors hastened to get out of the market but some of the textile 
shares rose under the lead of Khyber Textiles and Gadoon Textiles, 

which rose by Re1 to Rs3.00. Among the MNCS, Shell Pakistan and 
Lever Brothers were top losers falling by Rs9.00 and 56.00.
Other prominent losers were led by Adamjee Insurance,BOC Pakistan, 
Engro Chemical, Fauji Fertiliser and Pakistan Refinery, which 
suffered fall ranging from Rs3.50 to 8.90.
Steep decline of Rs7.50 in the share value of blue chip for the 
second session in a row in Fauji Fertiliser was not backed by any 
negative news but reflects the existence of some genuine investors 
owing to the developing situation.
Orix Leasing, 22nd ICP, Askari Bank, MCB, Metropolitan Bank and 
Bank Al-Habib also came in for active selling falling by Rs2.00 to 
Rs4.00, largest decline of Rs4.00 being in Bank al-Habib.
Trading volume rose to 104 million shares from the previous 103 
million shares, while out of the 102 actives only six rose, 68 fell 
and 28 were held unchanged.
Both PTCL and Hub-Power, the market received fresh massive 
battering off Rs1.05 and 1.80 at Rs16.60 and 8.35 on 63 million and 
28 million shares; followed by ICI Pakistan lower 65 paisa at 
Rs11.40 on 6 million shares; FFC-Jordan Fertiliser easy 60 paisa at 
Rs13.00 on 1.305 million shares and MCB off Rs1.65 on 1.70 million 
CBR conference to improve tax collection

ISLAMABAD, July 9: The Central Board of Revenue has chalked out a 
detailed plan for improving tax collection and tax procedures, in 
fiscal 1998-99, with an emphasis on minimizing evasion.
These issues would be the focus of a four-day collectors' 
conference opened on Wednesday, at the CBR headquarters in 
Islamabad. The conference agenda, said officials, includes an 
appraisal of the performance on targets set for the financial year 
1997-98, the loss of tax money due to reduction in tax rates for 
the financial year 1997-98, the changes made in the procedures of 
tax collection and implementation and the impact thereof, the 
rationale of the targets set for the past financial year and the 
new (1998-99), head-wise failures and achievements in collection of 
duties and taxes in 1997-98, a perusal of the prospects of 
continuing these changes as such during the financial year 1998-99.
The collectors and commissioners of customs, sales tax, central 
excise duty and income tax expressed their reservations regarding 
certain changes made in the set up of the tax collecting apparatus, 
though it was found that there has been no major complaint against 
the CBR functioning under a private sector boss, said officials.
The revenue targets asked to be met by each collectorate and 
commissionerate were also the focus of debate, as some of the 
collectors expressed doubts these were rational enough, in view of 
the slump that is widening in the local market.
The failure of certain mid-fiscal schemes started by the CBR for 
improving the tax collection, especially the Retail Sales Tax 
Scheme and the documentation of all tiers of the business and 
industry, was also discussed. It was resolved that broader view be 
taken for implementation of such schemes in future, before 
launching them for implementation.

Population swells to 130.58m
Ihtasham ul Haque

ISLAMABAD, July 8: The government here on Wednesday announced 
provisional results of the fifth population census, showing an 
increase in the proportion of Sindh's population to the country's 
from 22.6 per cent to 23.
On the other hand, the figure for Punjab fell from 56.1 per cent to 
According to the census figures, Pakistan's population rose to 
130.5 million from 64.2 million, as recorded in 1981.
"I can almost claim that this was the most authentic and fair 
population and housing census ever conducted in the history of 
Pakistan", Finance Minister Sartaj Aziz said at a news conference.
He said local and foreign agencies were wide of the mark in 
projecting the country's population at 135 million or even 140 
The census figures show the population growth rate to have declined 
to 2.61 per cent per annum, as against 3.06 per cent in the 1981 
Sindh's total population was put at 29.9 million _ an increase of 
more than 50 per cent over the 19 million figure of 1981.
There has been a substantial decrease in the population growth rate 
from 3.56 per cent in 1981 to 2.71 per cent this year.
The population of Punjab rose from 47.2 million in 1981 to 72.5 
million this year, but as a proportion of national population, it 
fell from 56.1 per cent to 55.6 per cent.
The rate of population growth in Punjab also decreased  from 2.74 
per cent in 1981 to 2.55 per cent.
The population of NWFP went up to 17.5 million from 11 million, 
while its growth rate declined from 3.32 per cent to 2.75 per cent. 
The proportion of its population to the national figure increased 
from 13.1 per cent in 1981 to 13.4 per cent.
Balochistan's population increased from 4.3 million (1981) to 6.5 
million. Its growth rate registered a staggering fall to 2.42 per 
cent, compared with 7.09 per cent recorded in the last census.
Like Punjab, the percentage of Pakistan's population declined, 
albeit marginally, from 5.1 to five.
The population in FATA increased from 2.1 million to 3.1 million 
and its annual growth rate was 2.11 per cent, against minus 1.47 
per cent in the 1981 census. Its percentage of the country's 
population increased from 2.4 to 2.6.
In Islamabad, there was an increase in the number of people from 
340,000 to 799,000 _ a growth rate of 5.15 per cent, compared with 
4.34 per cent of the 1981 census. It raised its percentage in the 
nation's population to 0.4 from 0.6.
RURAL-URBAN DIVIDE: According to the census, 67.5 per cent 
Pakistanis live in rural areas, down from 71.7% in 1981. The 
proportion of urban population increased from 28.3 per cent to 32.5 
per cent.
The highest concentration in urban areas is in Islamabad  65.5%, 
followed by Sindh with an urban population of 48.9 per cent.
Three major cities _ Karachi, Hyderabad and Sukkur _ accounted for 
73.1% of the urban population in Sindh and 35.7% of Sindh's total 
The comparative position of provinces and areas shows a similar 
trend, with a slightly higher increase in Balochistan, followed by 
Sindh, Punjab and NWFP.

Islamabad ready to sign no-war pact with India: FO 
Hasan Akhtar 

ISLAMABAD, July 8: A foreign office spokesman said on Wednesday 
that Pakistan was willing to sign with India a non-aggression pact, 
including non-use of nuclear weapons, as part of a comprehensive 
disarmament pact based on a just and fair settlement of the Kashmir 
Reacting to a statement of Indian Prime Minister Atal Behari 
Vajpayee that in his proposed talks with Prime Minister Nawaz 
Sharif, he (Vajpayee) would suggest an agreement between Pakistan 
and India pledging not to launch nuclear attacks against each other 
in the event of a conflict.
The prime ministers of the two countries are scheduled to hold one-
to-one talks at the sidelines of the SAARC summit later this month 
at Colombo.
Prime Minister Nawaz Sharif had reiterated Pakistan's desire for 
utilizing the SAARC forum for resolution of regional disputes at 
talks with Sri Lankan foreign minister Lakshman Kadirgamar, who 
called on him earlier this week to hand over a formal invitation 
for the SAARC summit.
104 cos get ISO-9000 certification

KARACHI, July 6: As many as 104 companies have acquired the ISO-
9000 quality certificate compared till date as compared to 64 uptil 
The Total Quality Management Experts Cell (TQMEC) of the Federation 
of Pakistan Chamber of Commerce and Industry (FPCCI) has prepared a 
list of certified companies.
According to a TQMEC official, the trend has now changed and more 
local companies have acquired the certificate comparison to 
majority of multinationals in the previous list of 64 companies.
However, he said that the export-oriented companies are still less 
than 40 in the new list, adding specially when foreign buyers are 
demanding certificate.
An official in a foreign-based certification agency said that as 
many as 500 companies are likely to be certified by the year 2,000 
since awareness among local companies has increased.

Massive outflow of funds aggravates banking crisis
Sultan Ahmed

THE GOVERNMENT which presumed it had liquidated its major foreign 
currency burden by repudiating its commitment to repay the $11 
billion deposits of private individuals and institutions in our 
banks in dollars immediately after the nuclear explosions of May 
28, now finds it has created another major problem in the process: 
fast outflow of funds after conversion into rupees to foreign safe 
havens through the Havala chain.
While the small savers may keep their savings at home by investing 
in the better schemes, or in gold or by acquiring property, the 
large depositors are tending to send the money outside by paying 
the difference between the Rs 46 for a dollar they get from banks 
after conversion and the market rate of the dollar that varies from 
Rs 52 to Rs 55 for a dollar, according to the time and place.
If this frightful haemorrhage of banks funds continues, 
particularly after the addition, of the six monthly profit earned 
on those funds up to July, the banks will first lose the deposits 
of $7.2 billion of resident Pakistanis and the $2.1 billion of 
overseas Pakistanis, while the foreign banks may retain the $1.7 
billion they had brought in here to earn interest as well as expand 
their lending capability and business as a whole.
Mr Shaukat Tareen, President of the Habib Bank, has spoken about 
drying up of the capital markets, while banks and financial 
institutions are suffering from liquidity problems. Along with 
that, there is pressure on home remittances as overseas Pakistanis 
have become wary of sending foreign exchange home.
Those who are sending money abroad fear the gap between the 
official and market exchange rates may widen a great deal over the 
period and secondly the government may come up with new 
restrictions on sending money abroad, legally or illegally.
The picture might have been different if Prime Minister Nawaz 
Sharif had been able to obtain substantial aid commitments, even 
for a short period, from Saudi Arabia, UAE, Kuwait and Qatar which 
he visited personally, and from Malaysia to which he had sent 
Commerce Minister Ishaq Dar. All that Dr Hafeez Pasha, Deputy 
Chairman of Planning Commission, could say at the 'Financial Post' 
conference last week was "some success" had been achieved in 
tapping new sources of economic assistance. And while finance 
minister Sartaj Aziz talks of sanctions not biting hard, and easing 
within six months, Dr Pasha talks of the "heavy sanctions imposed 
on us."
And since our foreign exchange reserves have come down and now 
stand at $913 million, as stated by the State Bank Governor, Dr 
Muhammad Yaqub, even if those who have large foreign exchange 
deposits want to believe the government for patriotic reasons, they 
find the government does not have the capability to honour its 
domestic foreign currency commitments even after restoring the 
foreign currency accounts as he did on Tuesday following pressure 
from Pakistanis in Kuwait.
The inconsistency in the official approach to the foreign currency 
deposits and contradictory pronouncements add to the confusion and 
multiplies fears of the depositors even after the restoration of 
the foreign currency accounts in a qualified manner.
For example the circular of the State Bank issued on Thursday to 
clarify the PM's statement in Kuwait cancels four earlier circulars 
No. 12, 17, 18 and 25 issued last month, and each one had given 
rise new questions. Such frequent changes and ultimate reversal in 
parts of the May 28 freezing of foreign currency accounts, do not 
create confidence in the depositors or hope for the better in 
Resident Pakistanis who have kept $7.2 billion in the FC accounts 
are of several kinds: they include small savers with honest 
savings, others with legitimate incomes, tax-evaders and those who 
had earned most of their deposits through corruption and crimes, 
including drug trade. 
The last category would not want to cash their savings in rupees 
and transfer them to a new account, which may not enjoy protection 
from questions regarding the source of the funds and get them into 
trouble on that score.
Such elements would like to transfer their deposits abroad, 
although that could mean earning far lower interest than they have 
been enjoying here so far and gaining much less overall.
Restoration of business confidence demanded

KARACHI, July 8: The businessmen have called upon the government to 
take immediate measures to help restore the confidence of trade and 
industry which was eroded through its recent actions, such as 
mishandling of foreign currency accounts and issuance of a very 
large number of circulars by the State Bank of Pakistan.
A representative meeting held Wednesday under the chairmanship of 
president FPCCI, called for consistency in policies to create 
confidence among the businessmen.
The participants were critical of frequent changes in policy with 
regard to foreign currency accounts and opined that it has created 
confusion among the public in general and business community in 
particular. They strongly felt that there was a need to create 
conditions within the country so as to stop the outflow of funds.
The meeting called by FPCCI to consider proposals for the revival 
of economy and as to how to come out of the present crisis was 
unanimous in its view that the issuance of a large number of SBP 
circulars betrayed the failure in formulating a well-thought out 
policy to deal with the situation.
They said the urgent requirement was to boost exports and immediate 
issuance of notifications to implement the various measures 
announced in the Trade Policy.
It was stressed that FPCCI should be involved in ensuring that the 
notifications being issued are in accordance with the Trade policy.

Moratorium on loans repayment may be sought
Bureau Report

ISLAMABAD, July 8: Minister for Finance Senator Sartaj Aziz on 
Wednesday hinted at the possibility of seeking moratorium on loans 
in case the international sanctions lasted beyond three months.
"In the first place we do not have any idea as to how long these 
sanctions will continue and if they go beyond three months then we 
will have serious thinking about seeking moratorium on loans," he 
further stated.
Speaking at a news conference he said the sanctions had created 
certain difficulties for Pakistan. However, he expressed the hope 
that the sanctions would not last more than three months. "This is 
our understanding that these sanctions are not for an indefinite 
period and would end in three months time," he added.
Mr Aziz also informed reporters about the meeting between Prime 
Minister Nawaz Sharif and IMF director Paul Chabrier held on 
Wednesday in Lahore. He said he was also present during the meeting 
and termed it as positive.
He said: "We discussed with Mr Paul the on-going ESAF/EFF programme 
and I would again be meeting him on Thursday for further talks."
Responding to a question Mr Sartaj said he could not say whether 
the IMF would release $226 million as part of the third and fourth 
instalments of ESAF and EFF. "I would be meeting you again tomorrow 
and would answer all your questions which relate to this issue".
The finance minister was also asked why the government was avoiding 
to officially tell the nation as to how much money it has been 
promised by four Middle East countries and whether they would be 
offering oil on deferred payments. "Let us concentrate on 
population census today for which this news conference was 
convened," he said smilingly.
Mr Sartaj Aziz said the prime minister has informed the IMF 
director about the circumstances that forced Pakistan to conduct 
the nuclear tests in view of Indian N-test on May 11 and 13 which 
badly altered the power of balance in the region. He said the prime 
minister also told the IMF director that since Pakistan had 
successfully implemented the conditions attached to the ESAF/EFF 
during the last three quarters, it would be only fair for the donor 
community to proceed with the programme.
The finance minister said that Paul Chabrier had stated that he was 
in Pakistan as the head of the IMF mission to assess the current 
economic situation and to submit his assessment to the Fund's 
Management Board of Directors in Washington.
"Mr. Chabrier appreciated the progress made by Pakistan in the last 
15 months in respect of the economy and in regard to progress made 
in implementing important structural policies," said a press 
release which was also issued during his news conference.
The finance minister and the secretary finance were also present at 
the hour-long meeting of the prime minister with the IMF team. Mr 
Furtado and Mr Tareq Shamsuddin, the local IMF chief accompanied Mr 
Paul Chabrier.

Ehtesab Bureau seeks CBR verification on Rs25bn loss
Ikram Hoti

ISLAMABAD, July 8: The Ehtesab Bureau has asked the Central Board 
of Revenue to verify the loss of Rs25 billion in customs duty due 
to over-fixation of import quota for hundreds of industrial units, 
over the past four financial year, including 1997-98.
The huge loss of duty has been pointed out to Ehtesab Bureau by 
organizations of the industrialists who have been making complaints 
that over-fixation of the quota for these units has been rendering 
the other units uncompetitive in the local market.
The CBR has looked into the matter and has found out that the old 
rules for fixation of quota and the implementation of the import 
rules have been twisted to the extent that these units have been 
over-importing duty-free raw materials needed for their 
consumption, and have been selling them in the black market.
Under the old rules, the fixation of the quota has been a 
compensation allowed to the manufacturing importers in lieu of 
other lucrative incentives in tax and other areas which had been 
withdrawn by the government.
These incentives were agitated against, by organizations of 
industrialists in various sectors, terming them as too lucrative 
and helping a set of manufacturers, rendering others in the market 
The rules allowing generous fixation of the quota were revised in 
1997, but there has been no investigation into the fact that the 
misapplication of these rules has been causing the loss of duty and 
establishing monopoly of a number of industrialists in the local 
These industrialists have been getting the capacity of their 
units/plants over-rated, and the officials who have been involved 
in allowing this over-fixation, have been causing the flooding of 
the local market by certain raw materials imported duty-free. This 
misapplication has also been causing growth of import-based black 
market in certain sectors of industry in the country, says the CBR.
The Ehtesab Bureau, said CBR officials, plans to substantiate on 
grounds of record-scanning that certain elements of the government 
allowed the duty-free import of raw materials over and above the 
capacity of hundreds of units, misapplication of the rules in 
fixing the capacity, sale of the duty-free imported raw materials 
in the black market, actual loss of duty incurred through this 

Back to the top
Winter Pakistanis
Ardeshir Cowasjee

THERE is a flock of winter Pakistanis, friends and acquaintances, 
who land in Karachi every winter. Whether I like it or not, whether 
anyone else likes it or not, they insist on telling us all exactly 
what we should do, how we should deal with the problems of the 
country, how we should counter the corrupt, holding forth 
Guilt-ridden as many of them may be, even if given a wide berth, 
they impose themselves upon us perennials, insisting that they know 
best, and at the end of the day they proclaim: "Well, I'm off. Back 
home to the civilized world. Look after yourself and remember you 
are dealing with vengeful people who can do more harm than good. 
Good luck, old boy. See you next year."
They always remind me of the old story our family physician, Dr 
Gustad Behramjee Mehta, used to relate about a patient of his, of 
undisclosed name, a jolly portly hirsute fellow who enjoyed the 
good things of life and smoked a charas-laden hookah. He had 
produced 14 children from his four wives. Each evening in rotation 
he would return home to evenly fulfil his marital obligations. His 
old retainer, Abdullah, minded the coop.
One evening, noticing Abdullah's furrowed brow, he enquired: "I 
presume all is not well, trusted friend?" "How discerning you are, 
my master. Senior Begum suffers from her chronic headache. Number 
Two has had an attack of migraine. Number Three's eye problem has 
recurred. And the Fourth, as you will remember, is precariously 
pregnant, ready to pop".
"Alors, send Jooma with the Buick to fetch Dr Gustad to tend to 
Wife One, telephone his son, Dr Jemi, and ask him to get here 
quickly to comfort Wife Two, fix an appointment for tomorrow with 
Dr Wania, to take care of Wife Three's eyes, and get the Lady 
Dufferin Hospital into top gear tonight for Four. That settles 
that. All is well. I'm off to the byscope." ('Byscope' being the 
local pronunciation for bioscope, which is what the cinema was 
known as in those far gone days.)
On the other hand, reactions and feedback from the E-mailers  
students, scholars, researchers, professionals, businessmen and 
others, mostly of Pakistani origin  has been enlightening. As our 
troubles mount, more and more E-mail messages pour in. There is 
genuine anxiety. All seek detailed information and clarifications.
The e-mail bombardment began after the affair of the government's 
attack upon the judiciary at the end of last year, increasing after 
Nawaz Sharif went 'nuclear,' reneged on his promise, and froze the 
foreign currency accounts. An analyst working at Moody's is 
distressed. He should be.
The bank loan default figures, of which over 98 per cent are from 
the public sector banks and institutions, as at the end of March 
1998 were as follows:
Defaults: amounts of repayment of loans overdue over 365 days: 
Total amount of defaults of loans of Rs.1 million and above = 
Rs.144.920 billion (by now, say, over Rs.145 billion). The figures 
pertain to loans of Rs.1 million and above and of these, Rs.111.066 
billion are defaults of loans, each worth Rs.30 billion and above.
Non-performing loans: amounts of repayment of loans overdue over 90 
days = Rs.130,524 billion (by now, say, Rs.131 billion). This 
figure is only for non-performing loans of Rs.30 million and above.
Most of the defaulters/non-repayers are those who could not have 
obtained their loans without political clout.
Inter-circular debt amongst just the government energy sector 
(WAPDA owing to OGDC, OGDC owing to Sui Gas, KESC owing to Sui, and 
so on and so forth and vice versa) amounts to Rs.82 billion.
If you are still sitting, with spectacles perched on the end of 
your nose, read on.
Now, to top it all, Nawaz Sharif has shattered whatever credibility 
his Government had by reneging on foreign currency accounts 
belonging to us, the people, worth $11 billion.
The State Bank is not independent. The governor of the bank does 
not sit on a constitutionally protected chair. He is at best a 
hired factotum of the ministry of finance headed by Sartaj Aziz, 
who is there because he is docile and faithful to Nawaz Sharif and 
incapable of saying anything which may cause his boss to frown. 
What Nawaz Sharif says, Sartaj accepts, and thereafter the rule-
bound State Bank issues a notification or a circular. So far, it 
has issued some 40 circulars relating to the freezing of the 
foreign currency accounts, which, when read in sequence, would 
boggle the mind of even a senior wrangler.
The intentions of the government, to say the least, are far from 
honourable. Every step of governance taken has smacked of the 
stifling of dissent through intimidation or coercion, the 
government having armed itself by vesting itself with "emergency" 
powers, depriving us of our constitutionally guaranteed fundamental 
When the FCAs were frozen, the first circular ordered authorized 
dealers to notify the number of accounts held by: (a) residents; 
(b) non-residents other than banks/financial institutions; and, (c) 
non-resident banks/financial institutions, together with the total 
of balances in various currencies held in each category.
Though 'no questions asked' immunity had been granted to holders of 
FCAs, the very next day after the freeze the State Bank collected 
information by its second circular which asked for details of (a) 
the names and addresses of the account holders; (b) their account 
numbers; and, (c) the closing credit balances as of 28.5.98. Why 
was this necessary?
The State Bank maintains that these details are held in secrecy, 
but, at the same time, it knows that all that is needed to vitiate 
the secrecy is a telephone call from the finance ministry.
When he was surrounded by expatriate Pakistanis in Kuwait last 
month, the prime minister informed them that their FC accounts 
would be unfrozen. When he returned home, and his sayings in Kuwait 
were clarified, we were told that the accounts had indeed been 
unfrozen but that withdrawal in foreign currency was 'temporarily 
suspended.' ('Temporarily' has not yet been defined.) Money could 
only be withdrawn in rupees at the artificial rate of Rs.46 to the 
dollar. Moreover, these sums, though unfrozen, could not be used as 
All this is meaningless. What the prime minister more or less said 
to us is: 'I have finished off all your foreign currency that you 
entrusted to me, and now I will allow you to open fresh foreign 
currency accounts from which you can withdraw at will.' Does he 
really believe that anyone will trust his word?
An e-mailer researcher of the Kennedy School at Harvard, a Ph.D in 
political science from MIT and a JD from NYU Law School, who is now 
writing a paper on our judiciary and the storming of the Supreme 
Court, will be pleased to learn that Nasir Aslam Zahid J. , and his 
brothers Munawar Ahmad Mirza J, and Abdur Rehman Khan J., have come 
up trumps. Nasir Aslam Zahid's judgment, handed down on July 3, on 
the November storming leaves no doubt that the attack was a 
premeditated exercise launched by the ruling party to pervert the 
course of justice, that the flack-jacketed police force controlled 
by the ruling party anticipated the attack and were there as part 
of the plan to facilitate the smooth entry of the stormtroopers. 
The troops came from the street-fighter wings of the Muslim League, 
led by its street-fighter parliamentarians and other toughs.
The people must come to the aid of the competent unapproachable 
judges to help them regain their confidence and their credibility, 
so sadly lost (howsoever lost) at the end of last year.
As for Karachi, the federal ministerial force that descended upon 
the city last week has realized that the cost of keeping this 
coalition government alive in Sindh at the expense of 10 lives a 
day is really not worth it. They have at last accepted that the 
killings are not wanton, but are a part of the highly organized 
ethnic turf war that has been waged in this city for over a decade.
The chief minister has finally conceded that if the police force is 
left to itself and completely freed of political intrusion and 
interference, and is led by a man of capability and vast experience 
in the province of Sindh, it may be able to do something to control 
the situation. The Federal Chaudhry who tries to look after the 
interior, has empowered the Rangers. If this force, now led by a 
competent general, is also allowed to do what it is meant to do, we 
may be able to survive, albeit uncomfortably.

Hanging on 
Irfan Husain

ONE of the most pathetic sights known to man is the spectacle of a 
civil servant currying favour to get an extension or a contract at 
the fag-end of his career.
The reason why so many senior government officers choose to debase 
themselves in this fashion is that once they are shorn of their 
official position, not only do they lose their many perks, they 
also become non-entities overnight. One day they are all-powerful 
heads of vast bureaucratic empires, and on their sixtieth birthday, 
they are transformed into has-beens who bore everybody within 
earshot by their endless recitals of their triumphs during their 
long bureaucratic careers. To postpone this sad destiny, government 
officials spend the last couple of years of their working lives in 
attempting to muster up clout among the ruling party of the day to 
somehow manoeuvre a stay of execution through an extension or a 
contract. Most fail, but a fortunate few manage to hang on in 
government service.
One civil servant who has clung on is currently principal of the 
Administrative Staff College. This is normally a prized sinecure 
that is given as a reward for meritorious service towards the end 
of a distinguished career. The college trains senior civil servants 
to man top positions and three years ago, I did a course there 
shortly before I took early retirement from government service. As 
a result of the four months I spent there, I have grown rather fond 
of the place.
Apart from the fact that participants were expected to come to 
class at the crack of dawn (i.e., eight in the morning), I had a 
splendid time. The college is housed in the old Punjab Club 
premises on the Mall, and has extensive lawns and hundreds of old 
trees. The rooms are comfortable, and I used my bureaucratic skills 
to organize transport, a phone and computer. Since I have many 
friends in Lahore, I was out most evenings.
The principal then was Salman Qureshi, an eminently civilized 
person, who wisely decided early in his stint, that the college 
could not hope to transform senior bureaucrats with more than 
twenty years of experience in a four-month course. Consequently, he 
tried to ensure that the experience was as pleasant and painless as 
possible for the participants. As a result, most of us came away 
with warm memories of the place and the people we met there.
Unfortunately for them, the last group of trainees did not have the 
same experience I did. The present incumbent, Mr Khalid Javed, 
officially retired two years ago as chairman, WAPDA, but managed to 
continue on extension. He then moved on to run the Civil Services 
Academy, and has now taken over the Staff College. The interesting 
thing about these post-retirement assignments is that, according to 
the rules, a civil servant can only be given an extension if he is 
irreplaceable. Now whatever else Mr Javed may be, even his most 
loyal supporters will not assert that he cannot be replaced.
One of his innovations on coming to the Staff College was to stop 
the lectures on art and architecture. The purpose of these two 
talks was to expose civil servants to our cultural heritage, but Mr 
Javed has deemed them unfit to be included in the curriculum. He 
then tried to get foreign affiliation to conduct "executive MBA" 
courses, but was politely told that this was a trifle ambitious, 
given the fact that most participants were in their fifties, and 
were present for only four months.
While Mr Javed's tinkering with the curriculum deserves our 
admiration, I must confess that I learned very little in the 
classroom. For me, the most useful part of the course was the 
insight I gained from the experience and views of the other 
participants who came from different services and different 
backgrounds. Some of them have become good friends. But such 
camaraderie thrives in a relaxed environment; the current thrust 
seems to be towards transforming the college into a boarding school 
with endless rules.
Another of the new principal's innovations is to discourage faculty 
and their families from playing tennis at the college courts. 
Earlier, the college subsidized the sport to the extent of 
supplying free balls. As a result of this cost-cutting measure, Mr 
Javed has saved all of Rs 2,000 per month. One only wishes his 
concern for the taxpayer extended to his own perks.
It is traditional for the principal to take a class or two, meet 
participants and attend a few lectures and group discussions. The 
present incumbent, however, has only come to a couple of talks, 
including one given by Mr Mushahid Hussain, the information 
minister. He has also moved his office from its perfectly adequate 
space into one of the classrooms. This speaks volumes for his 
commitment to training and higher education.
The world over, civil servants retire to write their memoirs or 
tend their gardens. Here, because bureaucrats tend to focus 
singlemindedly on their careers (as opposed to their jobs), few of 
them have any hobbies to sustain them after retirement. The result 
is that they either drive their wives up the wall by trying to 
micro-manage the household, or bore younger colleagues with long 
tales of bureaucratic battles fought and won. One reason why senior 
civil servants are generally so spineless when given illegal orders 
by their political bosses is that they are looking ahead to the 
evil day when they have to retire, and will need political support 
to ensure that they can cling on.

Karachi's web of terror
M.H. Askari

IF an all parties' conference a full year ago perceived Karachi as 
a city "with violence and terror stalking its streets round-the-
clock", the outlook is vastly more bleak today and getting worse 
with each passing day.
With as many as 171 persons killed in the month of June (according 
to the police authorities themselves) and many more since, the 
scale of violence has obviously escalated several times in the last 
12 months. The people are hostage to murderers, dacoits and armed 
bands of militants functioning under the label of political and 
factional groups. No market, no public place, no residential 
locality is out of their reach. If one escapes the web of terror 
spun all round, it is only by a stroke of good luck.
When this writer spent a great deal of his time recently in what is 
looked upon as a major centre of trouble, he heard several first-
hand accounts of gangs of young men going from door to door 
demanding bhatta, of grievously wounded persons found half-dead in 
the backstreets and of women in respectable households being 
molested by militants. In most of these cases, people were too 
scared to report these incidents to the police or seemed to have 
lost trust in the police to do much about them.
The state of affairs has naturally aroused much concern among all 
classes of people, but a public expression of concern is mostly 
confined to the better educated and socially more secure classes  
professionals, journalists, lawyers, doctors, middle- level 
government employees or business executives. One seldom hears of 
people living in the lower middle class neighbourhoods or in slum-
like tenements, even though they are the most affected, getting 
organized to hold rallies, peace marches and public meetings. This 
class of people is perhaps much too demoralized or much too 
harassed by the sheer effort to survive to be able to think of the 
ways and means of extricating themselves from the web of terror. 
The chronic shortages of essential utilities and the apathy of the 
officials especially at the level which is accessible to them leave 
them with little hope to be able to do anything effective about the 
state of affairs.
The proliferation and easy availability of weapons in Karachi is at 
the centre of what has contributed to the making of the pattern of 
life in this brutalized city. In his meticulously researched study 
of politics and ethnicity in Pakistan, the eminent Sindhi scholar, 
late Dr Feroz Ahmad, came to the conclusion that it was Zia 
government's active involvement in the happenings in Afghanistan 
that facilitated a "dramatic increase" in the crime mafias in 
Karachi and that the notorious smugglers' market at the head of the 
Hyderabad-Karachi highway became the main conduit for supply of 
drugs and illicit arms. Although the Zia regime ended more than a 
decade ago, the pattern has endured and even proliferated. It has 
been actively encouraged by the patronage extended to it by people 
enjoying social respectability because of their wealth and social 
and economic power.
It is difficult to make even a rough estimate of the number of 
weapons floating around in Karachi. The first demand by people 
disturbed by the prevailing state of affairs is for the de- 
weaponization of the city. But there is little to suggest that 
there has ever been a serious attempt at achieving that. Most of 
those who are in a position to do anything about it seem to have a 
vested interest in letting the status quo continue. Unearthing 
secret dumps or caches of arms may not be simple or easy, but there 
has hardly ever been a call for the surrender of arms, whether 
known or hidden. Too many people go about displaying arms. There 
are known neighbourhoods controlled by leaders of various factions 
which are teeming with people armed with the most lethal automatic 
There is no reason why a deadline should not be fixed for putting 
an end to the display of arms even by people in authority, except, 
of course, the members of the law enforcement organizations. It is 
deplorable that feudal customs in which the carrying of arms has 
traditionally been a status symbol should have been allowed to 
manifest itself in urban culture. The zamindars and waderas and 
their hordes of armed private security guards have no reason to be 
visible in cities like Karachi.
The foremost demand of the all parties conference held in Karachi 
in July last year was for "a solemn undertaking by all political 
parties to deweaponize the political culture... and to take 
immediate steps to cleanse their own ranks of militants prone to 
violence." This has never happened and even the political parties 
which participated in the conference never took the demand 
The main inner core of a group of concerned citizens, the Citizens' 
Alliance for Peace (CAP), held an informal get- together in Karachi 
the other day and drew up a programme for mobilizing public opinion 
against the prevailing state of affairs in the city through public 
rallies and peace marches. However, many of the prominent activists 
of CAP are now aligned to a political party which has a political 
programme of its own aiming to capture power. While the CAP's 
commitment to peace in Karachi and to the launching of a sustained 
campaign for that purpose are admirable objectives, it has to face 
the reality that it is likely to be seen as a partisan body because 
of its party affiliation and may not have the same sort of response 
to its agenda as it did three years ago when it first came into 
prominence. However, it has reaffirmed its call for a total ban on 
the display, sale and use of arms and ammunition in support of a 
political programme, a call that must be endorsed by all sane 
Following a series of consultations between the federal and 
provincial authorities last week, Federal Interior Minister 
Chaudhry Shujaat Hussain announced the setting up of two committees 
as part of the strategy to bring the ongoing violence to an end. It 
is not clear whether the Muttahieda Qaumi Movement (MQM) which is 
allied with the Muslim League (Nawaz) in the Sindh Cabinet is to be 
substantively associated with the working of the committees or not.
The Interior Minister claimed that the decision was by consensus 
and had the blessings of the MQM; the MQM's senior spokesman, 
Senator Aftab Shaikh, immediately came out with a rejoinder 
dissociating his party from a good deal of what the Chaudhry Sahib 
said. Following Chaudhry Sahib's statement, there were reports that 
the Rangers had been empowered to carry out a search-and-arrest 
operation; Mr Aftab Shaikh was emphatic that withdrawal of the 
Rangers was an integral part of the PML-MQM agreement to cooperate 
with each other and that the Rangers or any other para- military 
forces had no role in the maintenance of law and order and their 
presence in Karachi was therefore not acceptable. How any plan of 
action which is adopted without the whole-hearted endorsement of 
the PML's major ally in the Sindh government can produce useful 
results is difficult to understand.
Even if it is distasteful, Islamabad has to accept the fact that 
the MQM (led by Altaf Hussain) is representative of the majority of 
Karachi's population and it, unfortunately, is in a position to 
obstruct any action plan for Karachi which does not meet with its 
aspirations. At the same time, the MQM must realize that it cannot 
be permitted to behave as if it (and it alone) owns Karachi. It has 
to be willing to work in cooperation with other important political 
elements. Karachi has had more than its share of discord and 
mistrust and only a spirit of cooperation and accord can cure it of 
its ailments. The war for control over territories in Karachi 
between MQM and its breakaway faction must come to an end.
The decision to break up the Karachi Metropolitan Corporation 
(taken during the last regime) was in no sense either wise or 
practicable. Four different administrative authorities cannot work 
a cohesive system for operating the various administrative and 
civic agencies which must function effectively to give the people 
of Karachi a feeling of homogeneity and being looked after. 
Otherwise they will remain fragmented and even perhaps have 
conflicting perceptions of how Karachi should be governed. 
Decisions concerning Karachi should be taken in Karachi and by 
those who represent Karachi.
This places a special responsibility on the MQM, which is the major 
element in Karachi's civil society and must be more tolerant of 
dissent and disagreement than it is. In conjunction with other 
political parties it must also commit itself not to indulge in 
politics of violence.
The people of Karachi have, by and large, lost trust in the police 
force and Rangers as presently constituted. What the city probably 
needs is a metropolitan police which has to be better trained, 
better motivated, better equipped than the police force operating 
in the smaller cities and towns. It must also be so restructured 
that it wins the confidence of the communities that it serves and 
be accountable to them. This was one of the most worthwhile 
recommendations made by CAP in a declaration issued by it in 1995 
but appears not to have received much serious consideration by 
those in authority. 

When they meet in Colombo							       
Mahdi Masud

A Foreign Office spokesman has confirmed that the prime ministers 
of India and Pakistan would meet on the sidelines of the SAARC 
conference in Colombo coinciding with Sri Lanka's fiftieth 
independence anniversary towards the close of this month. The 
spokesman expressed the hope that the two prime ministers "would 
send the foreign secretaries back to the conference table."
Mr Atal Behari Vajpayee has made a plea for bilateral talks between 
India and Pakistan 'on all issues, including Kashmir', while 
remaining opposed to the idea of any third party role in the talks. 
Pakistan's willingness to refrain from seeking outside mediation 
depends entirely on India's readiness to negotiate a Kashmir 
settlement on the basis of international legality and the wishes of 
the people of the disputed state.
It is not realistic to expect that just as it took an arch-
conservative like President Nixon to achieve the politically 
hazardous opening to China in seventies, Mr Vajpayee's BJP 
government with its Hindu nationalist credentials would play a 
similar role in the context of India-Pakistan reconciliation. 
However, the fear of uncompromising public opinion on either side, 
proffered in the past as an excuse for failure to move towards a 
rapprochement in South Asia, is less valid today with the BJP 
government in office in Delhi and a Muslim league government in 
While it may sound like a cliche, the fact remains that no less 
than the fate and future of a billion people in South Asia hinge on 
the ability of the two prime ministers to bring a healing touch to 
this troubled region suffering from self-inflicted wounds. Never 
since 1947 have the prime ministers of the two countries faced a 
greater peace-keeping responsibility than the present incumbents do 
after having crossed the nuclear watershed.
If a move by Prime Minister Vajpayee to break the Kashmir deadlock 
is not forthcoming at the talks in Colombo, the least he could do 
is to agree to revive foreign secretary-level talks on the basis of 
the June 23 agreement in Islamabad on the formation of working 
groups on Kashmir and security. If restarted, the process may, 
hopefully, lead to substantive talks on bilateral issues.
A settlement through bilateral means is obviously a more desirable 
course. However, if the Colombo meeting foils to achieve any 
positive results, and if the international community is seriously 
interested in countering the threat to regional peace and stability 
posed by recent developments in the subcontinent, it would have to 
take a stronger line on the resolution of Kashmir and other 
disputes. In the words of Nicholas Platt, former US ambassador to 
Pakistan, and currently the head of Asia Society, New York: "It is 
only through a resolution of the Kashmir issue that the US (and the 
world community) can achieve their principal objective in South 
Asia  non-proliferation."
In her latest statement on the subject, US Secretary of State 
Madeleine Albright said, "What we would like to happen is for India 
and Pakistan to seek the world community's help in resolving the 
(Kashmir) dispute. The international community would respond 
immediately. It would happen in a heartbeat."
The least that important organs and institutions of the world 
community (including the Security Council, the UN secretary-
general, the P-5 and G-8) can do is to sustain pressure for the 
achievement of a Kashmir solution which holds the key to peace in 
South Asia. Mere references to Kashmir as the "root cause" of 
tensions between India and Pakistan are not enough.
If the nuclear tests of May have lessened the danger of an Indo-
Pakistan war by concretizing the concept of mutual deterrence, they 
have also heightened the possibility of triggering a catastrophic 
conflict by blunder, miscalculation or accident  the last by, say, 
a failure or malfunctioning of the controls or surveillance system. 
It is this latter possibility that adds a cutting edge to post-
nuclear tests situation in the strife-torn subcontinent.
In this context, Pakistan's former air chief, Air Marshal Zafar 
Chaudhry who had earlier opposed the option of Pakistan responding 
to the Indian tests with tests of its own, maintained later that 
Pakistan's nuclear capability did not provide a suitable deterrent 
against India's conventional superiority because since both the 
sides now possessed nuclear weapons, they cancelled each other out, 
leaving India's conventional superiority in the field.
The argument is fallacious since Pakistan's nuclear capability is 
meant to deter an aggressive attack by India, irrespective of 
whether this is launched by nuclear or conventional means. Nuclear 
capability is the world's first truly political weapons system, 
designed to prevent, not to wage, war. In the case of Pakistan, it 
is a deterrent against any attempt to drive this country to the 
wall as India has done at least twice in the past.
As for the contention that since India has a greater destructive 
capacity in nuclear weapons, Pakistan is in no position to risk 
ever using nuclear weapons, the position is not so clear-cut and 
definitive. As long as India knows that Pakistan will defend its 
independence and sovereignty, even if this involves the use of 
nuclear weapons, it will not risk endangering its major centres, 
military or civilian, by launching an aggression against Pakistan 
even though ultimately it may be in a position to inflict greater 
nuclear devastation on this country.

Davis Cup squad leaves for Tehran on 12th

ISLAMABAD, July 9: Pakistan Tennis team's preparations for the 
Davis Cup Asia Oceania Group-II second round tie against Iran here 
at PTF complex ended today.
The team would fly to Teheran from Karachi on July 12. The tie is 
scheduled for July 17-19 at Teheran.
There is no change in Pakistan team that played the first round 
Davis Cup tie against Pacific Oceania here in April this year.
Aisamul Haq, Pakistan's ace junior who has jumped 10th in the world 
ITF junior ranking recently, turned down the PTF selection 
committee decision to appear in trials for selection in the 
Pakistan Davis Cup squad. Aisam was asked to appear in trials by 
July 7 at Islamabad.
During the final one-week training phase at the PTF complex, 
emphasis were laid on ground stroke and physical endurance of the 
players. Davis cuppers Mushaf Zia and Omer Rashid supervised the 
Meanwhile, the list of Iranian team members which arrived at PTF 
office today, contains three new players apart from Ramin Raziani 
who defeated Omer Rashid in the reserve singles last year. Both, 
Tavakali and Bahrami, the last year number one and two, are not 
part of the team.
PCB approves a list not signed by selectors

KARACHI, July 6: The Pakistan Cricket Board (PCB) executive council 
approved the list of players for the Pakistan Under-19 team on 
Sunday which was not signed by any of the three selectors.
According to well placed sources in the cricket headquarters, the 
original list of 20 players finalised by the selectors was signed 
by the three selectors viz Abdul Raquib, Azhar Khan and Maazullah 

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