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DAWN WIRE SERVICE
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Week Ending : 24 October 1998 Issue : 04/42
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Contents | National News | Business & Economy | Editorials & Features | Sports
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CONTENTS
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NATIONAL NEWS
+ Text of joint press statement
+ Nawaz hails move to lift sanctions
+ Govt borrowings from banks exceed Rs50bn
+ IMF asks govt to resolve IPPs, tariff issues
+ PM seeks report on Karachi police plan
+ Restructuring of debts: Pakistan to raise issue at Paris Club
+ Four suspects in Hakim Said's murder identified
+ Kapco: Wapda petition adjourned
+ PIA not to be affected in case of default: Abbasi
+ Provincial setup to be revamped, hints PM
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BUSINESS & ECONOMY
+ Shortfall in tax revenue feared: Snags delay revamping of CBR
+ Exemptions encourage withholding tax evasion
+ Fresh incentives offered to sick units
+ Rs1.4 billion shortfall in Corporate Region target
+ $15.14m net foreign investment in KSE
+ Importers undertaking demanded by NCBs
+ Businessmen asked to raise $5bn deposits
+ No trade deficit by June 1999, says Dar
+ MNCs withdrawing essential drugs from market
+ Dual forex rates to go if IMF aid restored
+ Hub-Power, PTCL help stocks improve performance
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EDITORIALS & FEATURES
+ People-friendly police Ardeshir Cowasjee
+ Teetering on the brink Irfan Husain (Mazdak)
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SPORTS
+ 14-man team for Dhaka to be named today
+ Tennis: Khaliq and Nida retain singles title
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NATIONAL NEWS
981019
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Text of joint press statement
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ISLAMABAD, Oct 18: The text of the joint statement issued on Sunday
at the end of official talks between Pakistan and India on issues
of peace and security and Jammu and Kashmir, in Islamabad held from
October 15-18.
Mr Shamshad Ahmad, Foreign Secretary of Pakistan, and Mr K.
Raghunath, Foreign Secretary of India, met in Islamabad from
October 15-18.
They held separate meetings on Agenda item (a) Peace and Security
including Confidence-building Measures, and (b) Jammu and Kashmir
on the basis of the 23rd June, 1997, Agreement.
The talks were held in a cordial and frank atmosphere within the
framework of the composite and integrated dialogue process.
The deliberations between the foreign secretaries were guided by
the shared belief of their prime ministers as expressed in their
joint statement of 23 September, 1998, that an environment of
durable peace and security was in the supreme interest of both
countries and the region as a whole, and that the peaceful
settlement of all outstanding issues, including Jammu and Kashmir,
was essential for this purpose.
The Foreign Secretary of India called on Prime Minister Nawaz
Sharif and conveyed to him a message of goodwill from Prime
Minister A.B. Vajpayee. The Prime Minister of Pakistan warmly
reciprocated the Indian prime minister's good wishes. The Indian
foreign secretary also called on Foreign Minister Sartaj Aziz.
The meeting on October 16, 1998, discussed issues of Peace and
Security including CBMs. Both sides underscored their commitment to
reduce the risk of a conflict by building mutual confidence in the
nuclear and conventional fields.
The meeting on October 17 discussed Jammu and Kashmir. The two
sides reiterated their respective positions.
The two foreign secretaries agreed that the next round of talks on
the issues of Peace and Security and CBMs and Jammu and Kashmir
respectively and a review of the round would be held in the first
half of February 1999 in New Delhi.APP
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981024
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Nawaz hails move to lift sanctions
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HATTAR, Oct 23: Prime Minister Nawaz Sharif on Friday welcomed the
US Congress move giving President Bill Clinton waiver power to lift
economic sanctions terming it a positive development.
Addressing inauguration ceremony of the Bestway Cement Plant at
Hattar near Islamabad, the prime minister expressed the hope that
other countries would also try to understand Pakistan's position
regarding its recent nuclear tests conducted to restore strategic
balance in the region.
Nawaz Sharif described as unjustified sanctions imposed on Pakistan
by certain countries and international financial institutions in
arguing that it had no alternative but to carry out nuclear tests
to avoid nuclear blackmail by India and ensure its national
security and vital interests. He thanked those countries who showed
understanding of Pakistan's situation in this regard.
Nawaz Sharif spoke of serious financial difficulties with which
Pakistan was faced with because of international sanctions and
reiterated the country's resolve to overcome them with
determination and commitment to its ideals. He pointed out that
even the advanced countries had passed through difficult times and
God willing Pakistan will soon be out of the current financial
crisis.
The PM reaffirmed Pakistan's policy to co-exist with other
countries in environment of peace and expressed the hope that the
dialogue process with India would help resolve the core issue of
Kashmir and other disputes with that country. He observed that
India seemed to have realized imperative of solving the Kashmir
dispute and it was for the first time in 50 years that New Delhi
discussed the issue in Islamabad recently, in an exclusive session.
He said peace and security were the two outstanding issues between
India and Pakistan, which if settled would help both the countries,
tread the path of prosperity. NNI
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981023
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Govt borrowings from banks exceed Rs50bn
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Reporter
KARACHI, Oct 22: The government's borrowing from the banking system
during July-September 1998 quarter exceeds Rs50 billion, which is
in excess of Rs43 billion borrowing target set for the government
in 1998-99 credit plan, the prime minister's adviser on finance and
economic affairs, Dr Hafiz Pasha, said at a press conference on
Thursday.
However, a joint secretary of the finance ministry, present in the
press conference at the State Bank of Pakistan, hastily added that
the government's net borrowing came to Rs20 billion only as, he
explained, Rs30 billion had been deposited with the State Bank of
Pakistan towards debt-servicing in foreign exchange.
This amount was still retained with the State Bank as accumulated
arrears of debt payment, he added.
Despite this excessive borrowing from the banking system by the
government, Dr Pasha said inflation had been contained into a
single digit at 8 per cent, mainly because of the contraction of
foreign exchange reserves.
The agricultural sector, the adviser said, deserved full credit for
giving the country a bumper wheat harvest this year plus good
sugarcane and rice crops which had resulted in steady supply of
food items in the market. Onion, he said, was an exception.
He claimed that industrial productivity had also shown positive
signs in the first quarter and an estimated growth rate at 2.4 per
cent, which was slightly less than 2.5 per cent of industrial
production growth, had been noted in first quarter of 1997-98.
He rejected the observations made by economic writers and analysts
that decline in imports in the first quarter of this fiscal year
reflected a slowdown in the economy and more particularly in the
industrial sector.
Acknowledging that there had been a significant decline (about 24
per cent) in the overall imports during the July-September 1998
quarter, he explained that was mainly because of fall in import
bill of food items, petroleum products and power generating
machines. He asserted that the import of raw material and chemicals
had shown a rise which indicated increase in their consumption by
the industry.
Overall, he said, that there had been an improvement in the
balance-of-payments position in the first quarter but that was
mainly because of 24 per cent fall in imports. Exports, too, had
shown a drop of 9 per cent in this period.
The prime minister's adviser also told newsmen about the revenue
collection during the July-September 1998 quarter which, according
to him, showed a shortfall of Rs3 billion in meeting the set
target.
He said the tax collection target for the first quarter was Rs62. 1
billion as against which the actual collection was Rs58.7 billion,
showing a shortfall of Rs3.5 billion. He attributed the shortfall
in tax collection to a drop in imports resulting in less recoveries
of custom duties. Other factor affecting tax recoveries was
extension in last date for submission of income tax returns.
Collection of surcharges on petroleum amounted to Rs17.4 billion,
exceeding the target of Rs10.9 billion.
The total collection of taxes and surcharges during the last
quarter was Rs73 billion as against the target of Rs76 billion.
During the last quarter, he said, the government had paid Rs4
billion to the exporters and settled the entire backlog of rebate
claims. This had been done to improve the cash flow position of the
exporters.
He said the government had come out with a new system in which
rebate claims would be settled within 72 hours.
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981021
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IMF asks govt to resolve IPPs, tariff issues
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Shaheen Sehbai
WASHINGTON, Oct 20: The IMF finally came out into the open on
Monday and asked Pakistan to resolve the IPP and electricity tariff
issues if Islamabad wanted the IMF programme back on the rails.
"The resumption of discussions depends to a great degree on the
satisfactory resolution of the government's conflict with IPPs and
the issue of WAPDA, including electricity tariffs," a Fund
spokesman said, in what was a rare statement made by the IMF on any
on-going negotiation with any country.
"If these issues are satisfactorily resolved, the IMF stands ready
to proceed on a mission to finalise details of Pakistan's
macroeconomic programme," the IMF spokesman said, after a day of
hectic meetings on how to respond to what a source said was being
described as "the Pakistani defiance."
"The proposed IMF mission to Pakistan has been postponed and no new
date has been set," the spokesman said, adding that the visit was
to have begun October 21.
Some of the Pakistani diplomats in Washington were surprised that
the IMF had included the tariff issue as well among its conditions
to resume a dialogue with Pakistan.
The official announcement by the spokesman left many more questions
unanswered as it confirmed that the tariff issue and the IPPs
tussle had all along been the major hurdle in the five- day talks
held by Dr Hafeez Pasha and minister Ishaq Dar last week in
Washington.
International monetary experts said the postponement of the IMF
mission would now delay the proposed rescheduling of debts at the
Paris and London clubs which could land the government in serious
trouble to avoid a default.
"There has to be something cooking in Islamabad to come out of this
corner," a Pakistani diplomat said, expressing total surprise on
how these sensitive matters were being handled.
The key question being asked by all experts was: If these matters
were not resolved by the Pasha mission, what was being discussed by
the two sides for five days?
No one seemed to have an answer to that query but a Pakistani
source said there was a difference of perception on both the tariff
and the IPPs issue between IMF and Pakistani officials.
"The Pakistani side was pressing that IMF should concentrate on
structural reforms and raising the WAPDA tariff was a liquidity
issue which could be resolved by other measures," a Pakistani
source said.
Likewise on the IPP issue the Pakistanis were saying that the
corruption aspect of the whole affair should be separated from the
tariff question, the source said.
"When the talks concluded and Hafeez Pasha gave an interview to
Dawn claiming that policy level agreements had been reached, there
was still the divergence of opinion on these two critical matters,"
the source added.
What really surprised everybody was the announcement by the prime
minister to cut the tariff by 30 per cent, which flew directly into
the face of everybody.
Experts now believe Islamabad would soon have to announce some
sweeping measures on revenue generation side to bridge the huge
gaps that are to be created if the IMF programme was not brought
back on the rails.
On the IPPs experts agree that if the government could quickly
produce solid evidence of corruption against some of them in courts
of law, this issue could be resolved. But if no evidence is
produced and the matter keeps lingering on, it could cast serious
shadows on the overall relations with international donor agencies.
Pakistani diplomats in Washington are gearing up to the Nawaz
Sharif visit to the White House and many of them believe this could
be the only way out for Pakistan to get out of this bend they are
in at this moment.
"What Pakistan will have to sign away to receive a massive dose of
aid and support is still not clear," experts said.
Informed sources told Dawn here on Tuesday that the government has
contacted the IMF on Monday and sought 600 million dollar from the
revived ESAF/EFF to avoid imminent default, Our Islamabad Bureau
adds.
Sources said that the government was told that new events have
overtaken the IPPs issue which should be resolved directly in
consultation with the World Bank. "We were asked to sort out issues
related to power sector if we want fresh funding from the IMF",
said an official.
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981021
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PM seeks report on Karachi police plan
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Sarfaraz Ahmed
KARACHI, Oct 20: Prime Minister Nawaz Sharif has asked the interior
ministry to prepare a report within seven days on the
implementation of metropolitan police department plan in the
capital cities of all the four provinces.
Presiding over a meeting on the proposed metropolitan police setup
for Karachi at the Governor House here on Tuesday, the prime
minister asked Sindh chief minister Liaquat Jatoi to give him his
observations on the proposed setup within 10 days.
The two different implementation plans one each by the Prime
Minister's Monitoring Cell assisted by the Citizen-Police Liaison
Committee, and senior government officials whose perspective was
represented by the home department were presented in a report at
the meeting.
The report also contained reservations and apprehensions of the
government officials and the answers to those apprehensions by the
Monitoring Cell/CPLC were also made part of that report.
The chief minister had reportedly taken the plea that since he had
been out of town for the past many days and had recently returned
to the country, he did not have any idea about the proposed system.
Therefore, he added, he needed some time to evaluate and examine
the proposed plan before the prime minister took a final decision
on that matter.
The provincial law minister, Saleem Zia, also sought time saying
the PML-led government was yet to discuss that issue with its
coalition partners, the Muttahida Qaumi Movement.
Before the presentation of the report on the implementation plan by
Jamil Yousuf, chairman of a high-powered committee set up by the
prime minister last week, the chief secretary and home secretary
spoke on the matter, expressing their apprehensions as mentioned in
the report.
The CPLC chief said he in his capacity as an adviser of the PM's
monitoring cell and the head of the CPLC had found the objections
as a judgement against the plan of a metropolitan police
department.
The CPLC chief said he believed that a lot of improvement could be
brought about at various stages. But, he added, what was needed now
was the need of setting up of a safety commission and the
subsequent establishment of a metropolitan department.
Senior government officials such as the additional interior
secretary, the chief secretary and the home secretary have
expressed apprehensions on various aspects with regard to the
setting up of a Metropolitan Public Safety Commission (KMPSC) and a
Karachi Metropolitan Police Department (KMPD).
On operational implications, these officials said Karachi badly
needed police revamping and reorganisation to meet the present day
challenges. It certainly needed a well-equipped system backed by
computerised data bank and quality manpower to deal with terrorism
and crime syndicates. Simultaneously, they added, there is a need
for greater checks and accountability.
One of the questions raised by the government officials was about
the proposed composition of the commission and its constitutional
position under the proposed setup.
They said constitutionally maintenance of law and order was the
responsibility of the state or the provincial government. "Can it
be left to a commission where majority shall be nominated by
governor?".
They asked how the government would respond to a demand that the
KMPD should be placed under a lord mayor, and what would be the
status of provincial government vis-a-vis its responsibility to
maintain law and order under the law and the constitution.
The government officials pointed out that the present system did
not envisage any role for the commissioner or the deputy
commissioner. These posts had to be redefined which would require
restructuring of general administration and revenue administration
at least in urban areas, they said.
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981024
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Restructuring of debts: Pakistan to raise issue at Paris Club
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M. Ziauddin
ISLAMABAD, Oct 23: The next Paris Club meeting which is being held
tentatively on December 7 will consider a debt restructuring
request from Pakistan.
If approved, Pakistan will get a debt relief amounting to 2 billion
dollars in immediate payments.
The government has started depositing with the State Bank of
Pakistan rupee equivalent of the debt repayment arrears which so
far has gone up to Rs. 30 billion.
Though only an expression of the government's commitment to meet
its debt obligations if and when it has earned the required
dollars, this gesture has, however, already brought the budget
under extreme pressure by increasing the bank borrowing to Rs.52
billion against the full year target of Rs.12.6 billion.
In another development the monthly home remittances are said to
have been almost halved since July this year declining to 52
million dollars in September from 100 million dollars in July. In
August the figure was 70 million dollars.
This declining trend in the home remittances coupled with the sheer
drop of exports by 9 per cent in the first three months over the
same period last year has seemingly rendered bleaker the chances of
Pakistan meeting on its own the fast approaching debt obligation
deadlines.
Meanwhile, it has been learnt that the Paris Club may not consider
Pakistan's debt restructuring request if it is not backed by the
IMF, negotiations with whom have come to a standstill at the
moment.
In fact, according to informed circles the request for debt
restructuring will be taken for formal consideration by the Club
only if it is moved by the IMF at the scheduled meeting and not
directly by Pakistan.
The World Bank which is an important player at the Paris Club is
also not very happy with Pakistan presently because of the recent
announcement of 30 per cent decrease in the power tariffs and the
on going problems of the government with the IPPs.
Pakistan has signed a covenant with the World Bank for reforms in
WAPDA under which the government is obliged to restructure WAPDA,
plug leakages in transmission and distribution and enable the
Authority to generate on its own 40 per cent of its development
budget.
The reduction of 30 per cent in electricity bills is being regarded
by the WB as a step in total violation of the covenant.
In view of this the chances of the Fund and the Bank helping
Pakistan at the forthcoming Paris Club meeting appear rather slim,
experts said.
Lifting of sanctions which has become a certainty after the US
president Bill Clinton has been empowered by the US legislators
with a one year waiver, however, is expected to have very little
impact on Pakistan's financial woes which have now come under
pressure more because of Pakistan's deteriorating relations with
the Fund and Bank rather than any adverse effects due to sanctions.
Lifting of sanctions would at best mean resumption of operations of
US investment related OPIC and EXIMP bank activities.
Pakistan has already accumulated debt arrears of about a billion
dollars and if these arrears are not cleared between Nov 21 and Dec
31 when the grace period for repayment of various debts would end,
the creditors may finally declare Islamabad a defaulter.
However, the scheduled meeting between Nawaz Sharif and president
Clinton in early December is being viewed here as a favourable
development which, it is believed, would perhaps buy for Pakistan
the needed support at the Paris Club.
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981024
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Four suspects in Hakim Said's murder identified
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Reporter
KARACHI, Oct 23: Four out of the eight alleged terrorists involved
in the assassination of Hakim Said and two others have been
identified following the arrest of one of them, a senior police
official claimed on Friday.
The official, who did not want to be named, told Dawn that the gang
of terrorists had been identified following the arrest of a
suspect, Amirullah, in Liaquatabad on Wednesday.
"The suspect was arrested by the anti-burglary staff of the central
district police on intelligence information," he said.
The official claimed that the suspect had confessed to his, as well
as seven others, involvement in the killing of Hakim Said all of
them belonging to the Muttahida Qaumi Movement.
"According to the suspect, ex-ASI Naushad, Nadir Shah, Ajmal Pahari
and four others, who are not known to him, took part in the
terrorist operation," the official claimed.
The motive behind the assassination of Hakim Said, the official,
quoting the suspect, said the gang had only been told by their
superiors to eliminate Hakim Said.
He claimed that the suspect had told the interrogators that all of
his accomplices were in the city. "The investigators have tracked
down two of them, but their arrest cannot be effected as they are
hiding in a 'safe house' in central district," he said.
Moreover, he said, the prime minister had directed the law
enforcement agencies not to lay hands on any political activist
unless corroborating evidence was found against him, though he had
been shown a video cassette containing disclosures and confession
of suspect Amirullah.
Meanwhile, other sources claimed although the official agencies and
police had unofficially held activists of the Muttahida Qaumi
Movement, allegedly responsible for the killing of Hakim Said, the
investigation into the murder case might not be made public
officially until the passage of the CA-15 Bill in the Senate.
Even the arrest of Amirullah was not officially confirmed as none
of the police officers wanted to be quoted in this connection,
while each of them made unofficial claims about the progress of the
case.
On the other hand, two MPAs of the Muttahida Qaumi Movement were
reportedly placed on the exit control list. Sources at the airport
immigration section confirmed that they had been directed not to
allow MPAs Shoaib Bukhari and Zulfiqar Haider to leave the country.
The law enforcement agencies refused to confirm if these two were
also wanted in connection with the investigation into the Hakim
Said murder case.
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981023
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Kapco: Wapda petition adjourned
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Reporter
LAHORE, Oct 22: The Lahore High Court adjourned the hearing of a
WAPDA petition for supersession of the Kot Addu Power Company till
November 11 at the request of the company's counsel.
The petition first came up before Justice Malik Muhammad Qayyum on
October 14 when he passed an interim order directing Kapco to sell
electricity to WAPDA at Rs 1.98 instead Rs 3.44 per unit, and
issued notices to the company and its parent concern, the National
Power Company, which holds a 36 per cent share in it.
The WAPDA had alleged in its petition, filed through advocates Ali
Sibtain Fazli and Azmat Saeed, that National Power was calling the
shots with minority shares while it had little say in the Kapco's
management despite a 64 per cent shareholding under an agreement to
which it was not a party.
It also alleged mismanagement and claimed that a power generation
unit in the nearby Muzaffargarh was supplying it (WAPDA)
electricity at the rate of Rs 1.98 per unit against Kapco's price
of Rs 3.44 per unit.
Appearing for the Kapco and the National Power Company,
respectively, Barristers Abdul Hafeez Pirzada and Makhdoom Ali Khan
said on Thursday the Kapco-WAPDA relationship was regulated by a
solemn agreement freely and voluntarily entered into by them or on
their behalf. The contract provided for arbitration to resolve any
dispute arising between the parties signatories to it.
The WAPDA, the respondent companies' counsel said, could not bypass
the arbitration clause in violation of the agreement and approach
the high court straightaway for alteration of the terms of
contract.
Subject to this preliminary objection to the competence and
maintainability of the petition, they said they needed time to file
their comprehensive rebuttals to the averments made in the
petition.
The court gave them until November 11 to file their replies and
adjourned further hearing for that date.
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981023
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PIA not to be affected in case of default: Abbasi
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Bureau Report
ISLAMABAD, Oct 22: The chairman, PIA, Shahid Khaqan Abbasi, said
here on Thursday that the national airline would not be affected in
case the government committed default on the servicing of foreign
loans.
"We do not foresee any financial problem for the PIA if Pakistan
goes into default", he said. He, however, did not believe that the
country was rapidly heading towards default on the repayment of
loans.
Talking to reporters here on Thursday, he said that new measures
were being taken to reduce the losses and make PIA a profitable
organisation . He said ever since he took over, he made sure that
there were no false claims as has been the case in the past.
Responding to a question, Mr. Abbasi, who is also the Prime
Minister's adviser on aviation said that the PIA was about to open
new foreign routes for Melbourne (Australia) and Hong Kong. "Later
more routes will be opened for which we are currently holding talks
with foreign countries and their airlines", he said.
Shahid Khaqan Abbasi, MNA from Murree, said that the PIA was buying
four new aircraft to expand its foreign network. Negotiations, he
pointed out, had almost been completed to acquire these aircraft
shortly.
In reply to a question, he said that there was no plan to have
further retrenchment in the PIA. About 3,500 people, he added, had
been laid off. "Now we are left with 17,000 employees and none from
among them will be fired", he assured.
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981023
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Provincial setup to be revamped, hints PM
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Reporter
KARACHI, Oct 22: Prime Minister Nawaz Sharif, who spent four days
in the metropolis for taking "far-reaching" decisions for restoring
peace and normality, said his government was trying to hit at the
core of the ongoing conspiracy of terrorism aimed at destabilizing
Pakistan.
He also sought his coalition partners' support in identifying and
eliminating the culprits involved in criminal activities and in
banishing terrorism.
Talking to newsmen at Terminal-1 of Karachi airport, before leaving
for Islamabad, Mr Sharif said the murder of Hakim Said was part of
a conspiracy to destablize the country, and vowed to break the back
of terrorism.
The prime minister, who had discussed the problem with the ISI
chief and representatives of other law enforcement agencies earlier
in the day, said his main thrust was on taking corrective measures
for banishing terrorism once for all so that the past glory of the
city was restored.
Although the prime minister did not specify the "far-reaching
decisions", he did indicate changes and revamping of the provincial
administration.
In this context, he had earlier indicated structural changes in the
police setup which was also indicated by his keenness in the CPLC's
presentation on the metropolitan police set up.
Recalling Hakim Said's assassination, Mr Sharif said he had been a
real well-wisher of Pakistan and had rendered great services for
the cause of the country, especially the poor people.
"Taking his life is nothing but a nefarious act of destabilizing
Pakistan," he said.
He said the police were investigating the incident and they were
also aware of the serious concern of the government. It was "a
great challenge for all of us," he said.
The prime minister said that during his stay here he had got a very
good opportunity to review the law and order situation and discuss
measures to bring about improvement in it and to restore peace to
the city.
Asked about his meeting with the MQM delegation, the prime minister
said the main topic of his discussion was the prevailing law and
order situation in the city .
He said he had asked his coalition partners to play an effective
role in eliminating terrorism which had retarded peace and
progress.
He did not specify in which manner he had sought the MQM's
cooperation when the coalition partners had been complaining that
they were not taken into confidence on the decisions about the
maintenance of law and order and had not been invited to attend
meetings on the issue even when they were in the government.
Mr Sharif also referred to his meetings with the businessmen and
said a number of decisions had been taken for boosting the economy.
In this context, he referred to decisions on sick units and
increasing exports.
He also referred to the presentation he had on the Karachi Electric
Supply Corporation and hoped that the acute problem of power supply
to the city would be overcome through some structural changes.
While the PML supporters were describing the unusually long stay of
the prime minister in the city as significant, critics said he had
taken decisions that would increase the centre's interference in
the affairs of the province, especially the maintenance of law and
order.
During his stay in the city the prime minister had avoided meeting
his coalition partners until the last moment, though their role was
considered crucial for the maintenance of law and order in the
city.
This had given rise to apprehensions among his coalition partners
that some of the unspecified decisions would affect them.
===================================================================
BUSINESS & ECONOMY
981024
-------------------------------------------------------------------
Shortfall in tax revenue feared: Snags delay revamping of CBR
-------------------------------------------------------------------
Ihtashamul Haq
ISLAMABAD, Oct 23: The snags in restructuring of the Central Board
of Revenue (CBR) has started impacting on tax revenues and the
possibility of shortfall of over Rs50 billion in current year's
target cannot be ruled out, official sources said.
Sources told Dawn here on Friday that Chairman CBR Moeenuddin Khan
was facing difficulties and was unable to deliver because of the
non-implementation of the restructuring plan approved by the
Cabinet and fully supported by the prime minister.
One of the major reasons, contributing to low revenues, was the
delay in the appointment of five new members in the CBR as was
sought by the chairman and duly agreed by the prime minister.
Sources said the matter was pending due to the opposition by the
Establishment Division which did not want to offer market-based
salaries to the four new members and other staff planned to be
inducted in the organization.
The chairman had called for the appointment of Member Audit, Member
Management Information Service, Member Legal, Member Human Resource
Development and Member Budget and Evaluation. "So far there is no
progress towards the appointment of these members with the result
everything is suffering and the hope for increasing revenues has
fast become a dream", said an official of the CBR.
The CBR had also decided to appoint experts from the private sector
and a number of them had been inducted in the organization.
However, they did not join and have told the authorities that
unless their notification was issued by the Establishment Division,
they would not assume any responsibility.
Sources said that Moeenuddin Khan took over the charge of the CBR
in January and since then there was no progress towards the
restructuring plan.
"Our main thrust is to develop an information technology system
despite the fact that we have no money for it", said Tariq Iqbal,
Member Policy of the CBR. He told this correspondent that the
development of the information technology was must to increase
revenues. "We have received 1.4 million income tax returns and we
need to assess them and we can not do that properly unless we have
a information technology system", he added.
Sources said that due to the shrinking of the economy and less and
less imports, the CBR was facing difficulties to increase its
revenues. The shortfall during the first quarter was due to low
imports. "Under these circumstances, it is anybody's guess to have
new resource mobilization", an official of the organization added.
One of the reasons to have low revenues was due to more refunds
offered to the exporters. For example, the CBR paid Rs13 billion
refund during the first quarter of the 1998-99 compared to Rs9
billion of the same quarter last year.
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981024
-------------------------------------------------------------------
Exemptions encourage withholding tax evasion
-------------------------------------------------------------------
Parvaiz Ishfaq Rana
KARACHI, Oct 23: The exporters of rice and raw cotton are evading
billions of rupees in taxes which are payable by them on
procurement of these commodities.
Under the withholding tax regime, on all purchases of rice and raw
cotton by private and public limited companies one per cent is
required to be deducted from the purchase price paid to cotton
ginners, rice mills and any other intermediataries.
However, the same statute exempts all sole proprietorships and
registered partnerships having paid up capital of less than Rs 1.5
million from this deduction.
As a result of this anomaly in the law, massive evasion of
withholding tax on domestic purchases of rice and raw cotton are
going on resulting in revenue losses of billions of rupees to the
exchequer.
Trade sources said that this anomaly was created about two years
back by certain 'big fish' in collaboration with CBR high-ups on
flimsy grounds that limited liability companies can keep books of
account and could make deductions whereas sole proprietorships and
partnerships are small and disorganized and incapable of keeping
records.
Various representations made by trade to Ministry of Commerce and
CBR demanding rationality and equity in levy of this tax have gone
unheeded.
It was also suggested by the concerned associations that all
exporters should deduct withholding tax from rice millers, ginners
and intermediatary traders but even this was turned down by the
CBR.
It was also proposed that exporters with turnover exceeding Rs 1
million should make such deductions irrespective of whether they
were sole proprietors, partners or limited liability companies, but
this was also overlooked, these sources added.
As a result of this, a loophole was created whereby all major
exporters have now closed down their limited liability companies
and have formed sole proprietorships and partnerships with capital
less than Rs 1.5 million in order to avoid or 'evade' this
liability of withholding tax.
These sources accused the CBR authorities of purposely creating a
major anomaly whereby sole proprietorships and partnerships having
turnovers in billions of rupees, which employ chartered
accountants, are fully computerized and maintain full sets of
books, don't deduct withholding tax whereas much smaller limited
liability companies make this deduction.
It is ironical that sole proprietorships and partnerships are
considered in the organized sector when it comes to sales tax and
they have to pay sales tax and file sales tax returns, but they are
not considered organized enough to make withholding tax deductions.
If they are organized enough to file sales tax returns then they
are equally capable of deducting withholding tax, trade sources
argued.
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981023
-------------------------------------------------------------------
Fresh incentives offered to sick units
-------------------------------------------------------------------
Reporter
KARACHI, Oct 22: The management of the closed and sick industries,
who defaulted on payment of banks and financial institutions'
loans, are being offered fresh opportunities and incentives to
settle their debts which will now be closely monitored by a high
powered committee headed by the Prime Minister's Advisor on Finance
and Economic Affairs, Dr Hafiz Pasha.
These opportunities and incentives being offered to the loan
defaulters are same as given by the State Bank of Pakistan last
year and in fact provide a chance to those defaulters also who did
not respond to the scheme last year.
Last year, the SBP offered all borrowers who could not adjust loans
for the last 7 years and more to pay the principal amount plus a
fixed amount in instalments within a prescribed time frame. Similar
incentives were given to five-year loan defaulters and three-year
loan defaulters.
On Thursday, Dr Hafiz announced that all those borrowers who had
already paid 10 per cent of the settled amount up to June 30 under
the old SBP scheme but were not able to pay the balance amount
would be given an opportunity to make this adjustment.
Similarly, borrowers with Rs 10 million loan default who did not
respond to the last year's SBP incentive scheme are being asked to
participate in the scheme and get their debts adjusted.
"The idea is to revive the closed units which are viable and
quickly liquidate all those industrial units which are not viable,"
Dr Pasha outlined one of the three objectives of his operational
plan which he finalized at a meeting attended by the Governor of
State Bank of Pakistan, Dr Muhammad Yaqub, presidents of the
nationalized and partly privatized banks, Chairman of Board of
Investment Humayun Akhtar and leaders of the business community.
He said a high-level committee headed by himself with Humayun
Akhtar as the Vice Chairman will monitor the implementation of the
plan and submit a report to the prime minister after every two
weeks.
This committee will monitor the revival process in context of the
macro economic policies and will make suitable recommendations as
and when needed.
Another committee is being formed to oversee the operational part
of the plan in the banking institutions to be headed by a corporate
leader Shaukat Mirza.
The advisor said that the government will issue in a day or two the
notification for the formation of this committee and its term of
reference.
He said the plan has been formulated by a committee formed by the
prime minister and who gave consent to the recommendations only a
day before.
According to Dr Pasha, there are about 4,000 sick industrial units
which include about 1,000 big units and 3,000 small units. The
small units, he said, will receive special attention as these have
greater potential for revival and generate more employment.
In about next two weeks, he said that the committee will submit
sectoral recommendations focussing on textile, cement, sugar and
other sub-sectors.
He promised to make public the findings of his committee on
industrial sickness but was unable to identify how many of these
sick units are viable for revival and what are the main causes of
sickness.
"It is for the committee working at operational level to find out
the causes of industrial sickness," he replied.
He avoided to answer when asked if the government would take legal
action against those sponsors who over capitalised their projects
and rendered them sick before the commencement of operation as has
been done in case of Hubco.
"Ask this question to Governor of State Bank of Pakistan," replied
the advisor when asked to informed newsmen of the fate of
government sponsored FIA operation against the loan defaulters.
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981023
-------------------------------------------------------------------
Rs1.4 billion shortfall in Corporate Region target
-------------------------------------------------------------------
Parvaiz Ishfaq Rana
KARACHI, Oct 22: The first quarter (July-Sept) collection of direct
taxes of the Corporate Region of Income Tax, Karachi fell short by
around Rs1.4 billion against the target of Rs6.4 billion.
According to official figures made available by the local tax
offices on Thursday, the Corporate Region has collected Rs4.989
billion during the first quarter of the current fiscal year against
a target of Rs6.4 billion.
These sources said that a huge shortfall of Rs1.378 billion in
direct taxes collection during the month of September, against the
target of Rs4.2 billion upset the performance of the region.
"Extension in filing of tax returns allowed by the prime minister
on Sept 30, drastically reduced the collection which could have
otherwise realised for the same month," the official added.
Otherwise, historic trends indicate that collections during the
month of September are usually higher than those of other months
because of revenue received along with returns and collection of
advance tax instalment.
Giving other details the official said that the Corporate Region
made a nominal increase in collection during the month of July when
Rs781 million were netted as against the target of Rs770 million.
Similarly, a slight excess of Rs1.386 billion was made during
August, against the target of Rs1.370 billion.
However, the entire target for the first quarter of current fiscal
year was upset by poor collection of Rs2.822 billion made during
September as against the target of Rs4.2 billion.
The Corporate Region of Income Tax, Karachi which has been given
the task to net Rs44.256 billion or 22 per cent higher than the
preceding year's target of Rs36.5 billion, is to face an uphill
task under the sluggish economic activity of the country.
The region has been asked by the CBR to collect Rs42.347 billion on
account of income tax (IT), Rs0.852 billion against wealth tax
(WT), Rs0.458 billion from capital value tax (CVT) and Rs0.599
billion against workers welfare tax (WWT).
However, collection on account of arrears and demand created by the
tax department has shown substantial increase which stood higher by
Rs1.3 billion up to Sept 30, than a corresponding period of last
year.
Refunds made by the region against access payment of taxes against
imports, supplies and partly against appeals up to August stood at
Rs1.207 billion against Rs1.185 billion of a corresponding period
of last year.
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981023
-------------------------------------------------------------------
$15.14m net foreign investment in KSE
-------------------------------------------------------------------
KARACHI, Oct 22: The Karachi Stock Exchange (KSE) has registered a
net investment of Rs 696.6 million ($15.14 million) by foreigners
during the month of September bringing the total investment since
January to Rs 11.3 billion.
According to the statistics of the Exchange released Thursday,
foreign investors purchased 41.8 million shares worth Rs 696
million and sold 30.5 million shares worth Rs 583.9 million.
During the Jan-Sept period, foreigners purchased 429.5 million
shares and sold 450 million shares worth Rs 11.39 billion and 10.2
billion respectively.
'Erosion in value of shares led to heavy losses to domestic and
foreign investors,' said a stock dealer while referring to the KSE
statistics.
He said the 100-Index of KSE which was currently fluctuating
between 800 to 1000 provides ample opportunities to new domestic
and foreign investors to make their debut in the market.
A stock broker leading in foreign funds, said on condition of
anonymity that the recession in major economies of the world has
severely jolted the confidence of investors in stocks.
'Foreigners have ruled out any new investment or allocation of
fresh funds for investment in all the Asian region,' he observed.
He said that currently the foreign investors were playing in stocks
with already allocated funds and would rather opt to move to
strategic portfolios to cover losses registered early this year.
APP
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981022
-------------------------------------------------------------------
Importers undertaking demanded by NCBs
-------------------------------------------------------------------
Sabihuddin Ghausi
KARACHI, Oct 21: In the wake of reports on steep fall in country's
foreign exchange reserves, now estimated at around 500 million
dollars, the nationalized commercial banks have started demanding a
firm undertaking from the importers to arrange foreign exchange
from their own resources in the event of non-availability of
foreign exchange cover from the State Bank of Pakistan.
Importers faxed to Dawn on Wednesday the copies of the undertaking
to be given by them to the banks where they open their letters of
credit for import.
One of these banks is the top most NCB and the other is a partly
privatized NCB. In this undertaking, the importer offers a firm
commitment to arrange the foreign exchange from own resources and
deposit the entire sum within two days of the receipt of demand for
payment in event the State Bank is unable to provide required
amount of foreign exchange.
A number of foreign banks in Pakistan were already demanding such
undertaking from the importers much earlier.
Vegetable ghee manufacturers, who are importers of edible oil, are
reported to have brought this fact in notice of the Commerce
Minister, Ishaq Dar on Wednesday at a meeting held at the State
Bank of Pakistan.
Responding to this complaint, the deputy governor of the State Bank
is reported to have declared that the central bank has met all
foreign exchange obligations in respect of imports till Tuesday.
However, the State Bank did not offer any comment on the demands
being made by the NCBs from importers to furnish an undertaking.
Importers, however, believe that this demand of the NCBs has
created a panic in the market and might lead to further confusion
in the trade. They expect that this issue will be high on the
agenda of the meeting of bankers with Prime Minister's Advisor on
Finance Dr Hafiz Pasha on Thursday at the State Bank of Pakistan.
On Wednesday, the leaders of the Association of Vanaspati Ghee
Manufacturers in their meeting with the commerce minister warned of
a serious ghee crisis after two months when Ramazan sets in if no
measures are taken to ensure steady and unhampered supply of edible
oil.
They were obviously not happy on government's decision to take out
edible oil import from the list of those seven items which were
being imported against officially fixed rate of Rs 46 a dollar.
A blanket imposition of 30 per cent cash margin on imports has also
hurt the edible oil importers who acknowledged increase of Rs 3 per
kilo in ghee prices which may go up to Rs 5 per kilo when full
impact of these measures would be felt.
Blaming the importers of dumping edible oil in the last three
months, Ishaq Dar calculated that total cost of edible oil import
during July-September 1998 was 200 million dollars which is 40
million dollars in excess to normal import.
Maintaining that the country has now six weeks stock of edible oil,
the ghee manufacturers in their representation admitted that "some
of the manufacturers have imported in excess to their capacity".
The ghee manufacturers have proposed the government to form an
Edible Oil Regulatory Board to regulate edible oil import after
determining the capacity of each ghee unit.
"The capacity of the ghee unit should be supported by consumption
of electricity, payments on gas bills plus their sales shown in the
balance sheets," Amjad Rashid, a leading dealer of food items told
Dawn. "An average of the last three years should be taken to
determine the edible oil requirement of each plant," he added and
said that this formula is in line with the arrangement worked out
by the Ghee Corporation of Pakistan.
Amjad Rashid suggested that edible oil import be allowed on
contract as floating cargo for which there is a provision in the
1998-99 import policy for the petroleum products. The Import Policy
provides import of POL products already on high seas (floating
cargo) shall be exempted from opening of letters of credit prior to
the issuance of bill of lading.
He wants inclusion of edible oil in category of floating cargo.
Commodity merchants also speak of prices of a large variety of
kitchen items creeping up following government's decision to import
all items but two (wheat and POL) on composite rate and a blanket
provision of 30 per cent cash margin.
Following pressure of imports on the Interbank foreign exchange
floating market, the composite rates of dollars have also started
creeping up.
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981021
-------------------------------------------------------------------
Businessmen asked to raise $5bn deposits
-------------------------------------------------------------------
Pervaiz Ishfaq Rana
KARACHI, Oct 20: Prime Minister Nawaz Sharif has asked the business
community to raise $5bn through fresh bank deposits to improve
forex reserves for which the government is willing to give legal
and constitutional cover.
Prime Minister asked the participants to find about 100 businessmen
capable of giving $50m in deposits for raising a total of $5bn.
He also set up a committee to be headed by chairman APTMA, Humayun
Elahi Sheikh for raising $5bn and promised to provide legal and
constitutional cover to these forex deposits.
Nawaz Sharif has also constituted two other committees to make
concrete proposals to double exports by the year 2000 and improve
taxation system.
The announcement was made by the PM at a meeting with members of
the Federation of Pakistan Chambers of Commerce and Industry
(FPCCI) held on Tuesday, in Federation House.
Sources said the marathon meeting which lasted for over five hours
could not bring on the spot results because the proposals presented
by the business community before the PM were not only deficient but
also lacked direction to meet the on-going economic crisis.
The Prime Minister was disappointed and was reported to have said,
'the proposals have turned out to be against my expectation,' a
participant told Dawn.
However, after listening to the proposals made by president FPCCI,
Fazal-ur-Rehman Dittu, vice president Maqsood Ismail and immediate-
past president Senator Ilyas Ahmed Bilour, the PM announced the
establishment of the three committees.
Sources privy to the meeting further disclosed that the Prime
Minister asked FPCCI to form these committees which will be given
ten days period to come up with recommendations on their respective
subject.
'I am sorry to say that the private sector has exposed its
inefficiency by holding parleys with the Prime Minister without
carrying out proper home-work on such issues of national
importance," said a participant.
The Prime Minister asked FPCCI to nominate eight members on the
committee which will recommend concrete proposals to double exports
by the year 2000 and another eight member on the committee which
will recommend proposals to improve taxation system and revamp CBR
structure.
Nawaz Sharif said he was prepared to accept the FPCCI proposals
provided they give commitment for doubling exports by the year 2000
and revive all viable sick units and help the government in
recovering loans from wilful defaulters.
The Prime Minister agreed to include five nominees of FPCCI on the
Industrial Revival Committee (IRC) which was to hold meeting on
Tuesday, under the chairmanship of Commerce Minister.
FPCCI vice president Maqsood Ismail proposed the formation of
Export Development Authority under the chairmanship of Prime
Minister and executive chairmanship of FPCCI nominee to solve the
problems of exporters at the highest level. The Prime Minister
welcomed the proposal and asked that mechanism of its working and
the role of public and private sectors be worked out so that no
confusion arises afterwards.
Nawaz Sharif was highly critical of those businessmen who were
indulging in under-invoicing and over-invoicing at a time when the
country direly needed foreign exchange. He warned that if those who
indulged in the malpractice did not bring in due foreign exchange,
the government will be forced to take strong action against them.
President FPCCI Fazal-ur-Rehman Dittu said that one of the main
problems being faced by exporters was the domination of revenue
culture over export culture.
He opposed the devaluation of rupee and instead suggested that
creeping adjustment should be made in the exchange rate to counter
inflation in the economy.
The PM was accompanied by Acting Governor of Sindh Nawab Mirza,
Chief Minister Liaquat Ali Jatoi, Commerce Minister Ishaq Dar, Dr
Hafiz A Pasha, Advisor to Prime Minister on Finance, Syed Ghous Ali
Shah Minister for Education, Sheikh Rashid Ahmed Minister for
Labour, Manpower and Overseas Pakistanis, Mushahid Hussain Minister
for Information, Humayun Akhtar Khan, Minister of State, Ehsan
Iqbal, deputy chairman Planning Commission and other high
government officials.
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981018
-------------------------------------------------------------------
No trade deficit by June 1999, says Dar
-------------------------------------------------------------------
Omar R. Quraishi
LAHORE, Oct 17: Pakistan will have no trade deficit by the end of
the next financial year, federal commerce minister Ishaq Dar said
here on Saturday.
Speaking at the convocation of the Hajvery Group of Colleges at the
Alhamra-II auditorium, the commerce minister said the trade deficit
for 1996-97 was $3.74 billion. The next year, 1997-98, it was
brought down to $1.5 billion and by next year, June 1999 that is,
there will be no deficit, the minister said.
The minister said that the persistent trade deficit government had
constantly dogged government efforts to curtail external borrowing.
He said that curbing the trade deficit was a high government
priority also because it help in bringing down the budget deficit.
He said the government had wanted to eliminate the trade deficit in
three years but had to bring this forward by a year after economic
sanctions were imposed last May.
He claimed all economic targets for the current financial year
would be met by June 30, 1999.
The minister said the economy during the time of the previous PPP
government was much worse than it is now. Gross Domestic Product
(GDP) then had grown at 1.3 per cent, and now it was 5.4 per cent
(a figure disputed by the IMF and many independent economists).
Growth rate in the industrial sector then was 2.29 per cent then
compared to 4.5 per cent now, minus 0.7 per cent in agriculture
then, 5.8 per cent now, and the services sector had grown 2.7 per
cent during that government and by 4.5 per cent now.
DENIES DIFFERENCES WITH PASHA: Later talking to reporters, the
commerce minister said that he did not have any differences with
Hafiz Pasha, the prime minister's advisor on finance.
He said the advisor had no intention of resigning and had already
contradicted reports indicating that he might do such a thing.
Responding to another question, the commerce minister indirectly
admitted that he was involved with the finance ministry. Dar said
that the prime minister holds the finance portfolio and if he (Dar)
does do any assignments pertaining to the finance ministry then it
is on the prime minister's directives.
The commerce minister has taken an adversarial stance against the
conditionalities set down by the International Monetary Fund for
sanctioning a renegotiated extended structural adjustment facility
(ESAF). He publicly said recently that Pakistan would not devalue
its currency, nor would it raise electricity charges. Both are part
of conditions set down by the IMF for Pakistan to get loan.
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981022
-------------------------------------------------------------------
MNCs withdrawing essential drugs from market
-------------------------------------------------------------------
Haris Anwar
KARACHI, Oct 21: The multinational companies have started to
withdraw essential drugs from the market and are replacing them
with new and a higher cost products to offset their losses,
industry sources said.
"This is a strategy we have adopted to keep ourselves afloat as the
government has not allowed to increase the prices since November
1996", a managing director of multinational firm said on Tuesday.
He said government didn't control the prices of newly registered
products hence the new and expensive products are replacing the old
and cheaper products.
Market survey reveals that there is acute shortage of some of drugs
produced by the multinationals. The whole asthma group which
includes Ventoline, Ventide, Becolide, Beconase, products of Glaxo
Pakistan was not available at many chemist shops. Similarly, Agrol,
Dilantin, produced by Park-Davis, are also rarely available.
Penidure LA, Gevirol Capsules and Minocin, products of Wyeth, too,
are in great scarcity.
"This will have severe impact on consumers as cheap medicines have
started to disappear from the market, but the government is unable
to understand the issue", sources added.
Sources in the industry said the government had withdrawn the raw
material from essential goods list since September and only
finished products were being allowed to be imported at the official
rates. The government on Friday removed five items from the list of
seven essential items, including medicines, on which foreign
exchange was being provided by the State Bank at the official rate
of Rs 46 to a dollar.
"There are some products on which even raw material cost is not
being recovered, said chief of a multinational company. He said the
MNCs usually maintain 3-6 months inventories and impact of this 11
per cent differential between official and composite rate would
start to hit the companies within three months.
There is an indexation formula for controlled products linked to
inflation and devaluation from July 1, 1994. Last adjustment in the
prices of controlled was allowed in November, 1996 when the prices
were raised by 6 per cent.
A summary, prepared by Dr Hafeez A. Pasha, advisor to Prime
Minister on Finance and forwarded by ministry of health is awaiting
the cabinet's approval, which sources said had recommended a price
increase of controlled drugs by 9-15 per cent.
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981022
-------------------------------------------------------------------
Dual forex rates to go if IMF aid restored
-------------------------------------------------------------------
Ihtashamul Haq
ISLAMABAD, Oct 21: The government has expressed its readiness to do
away with the dual exchange rate during the next two months period,
provided the IMF restores the country's assistance.
Informed sources told Dawn here on Wednesday that the government
has approached the IMF and said it needed at least two months to
have some unified exchange rate and that it was not possible to
immediately concede over to the issue keeping in view the "extreme
vulnerability of the economy".
While the IMF has asked the government to sort out the issue of the
IPPs specially that of the Hubco and KAPCO with the help of the
World Bank, it was at the same time urged to immediately remove the
multiple exchange rate.
Sources said that the IMF was putting the elimination of dual
exchange rate as number one conditionality in the proposed $5
billion bailout package. Islamabad has been told that in case this
conditionality was met before the end of this month, the Executive
Board of the IMF could meet in early November to disburse $600
million out of the revived $1.6 billion Extended Structural
Adjustment Facility (ESAF) and Extended Fund Facility (EFF).
"We are told that this ESAF/EFF could be stretched to $2 billion if
Pakistan was ready to accept some of the main conditionalities", an
official of the ministry of finance. When contacted he told this
correspondent that the IMF wanted Pakistan to adopt the new reform
agenda that sought to increase general sales tax (GST) from 12.5
per cent to 15 per cent, increase revenues from Rs350 billion to
Rs370 billion during 1998-99, increase the utility charges of
electricity, gas and water and undertake certain comprehensive
restructuring plan for Water and Power Development Authority
(WAPDA) and the Central Board of Revenue (CBR).
Sources said that the government hoped to re-start negotiations
with the IMF in the middle of next month. "We are given to
understand that talks between Pakistan and the fund authorities
could be resumed before November 20", said another official.
The foreign exchange reserves which had gone down to below $500
million, insufficient for one week import, were causing too much
concern in all the economic ministries.
Sources said that the policy makers have started pondering as to
what would happen in case international sanctions continued for a
long period and no new were loan materialized.
"The prime minister has been told that under the present
circumstances there must a real 50 per cent reduction in the non-
development expenditure and an effort to achieve over $10 billion
export target for the current financial year", a source in the PM
Secretariat said.
He said the prime minister realised that without tightening the
belt, the economic crisis would only aggravate.
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981024
-------------------------------------------------------------------
Hub-Power, PTCL help stocks improve performance
-------------------------------------------------------------------
Reporter
KARACHI, Oct 23: Stocks gave another improved performance on Friday
as the strength of Hub-Power and PTCL spilled over to other
counters amid light trading.
Analysts said the perception that the post-nuclear test US economic
sanctions might be eased after the Congress waiver for President
Clinton appears to be the chief stimulant behind the market's
improved performance during the last two sessions.
The underlying sentiment in part was also influenced favourably by
the prime minister's four-day stay in the city and his desire to
end the prevailing uncertainty both on political and economic
fronts, dealers said.
"The positive nod from the IMF about the bailout package could
prove a decisive factor in putting the market back on the rails,"
they added.
The KSE 100-share index managed to close fractionally higher, by
1.02 points, at 809.98 as compared to 808.96 a day earlier. Losers
forced a slight edge over the gainers at 47 to 41, with 40 shares
holding on to the last levels.
The volume figure fell to four-month lows at 51 million shares,
reflecting lack of support both from the institutional traders and
the speculative forces owing partly to weekend considerations.
The low volumes also reflect that both the sellers and the buyers
want to maintain a status quo awaiting some positive news from the
economic front, said a broker.
"The market is literally banking on the economic bailout package
from the IMF and the recent waiver given to President Clinton to
remove some of the post-nuclear sanctions on Pakistan and India has
raised hopes that the green signal might be around," said a member
of the KSE.
Some others said as the economy is fundamentally weak the chances
of any robust rally appears a bit remote. However, selective
support could re-emerge strong, largely based on good dividend
news, they added.
Analysts said news that six of the private power producers have
shown their willingness to cut tariff rates as demanded by the
government halted the last two days run-up under the lead of Hub-
Power and some other foreign sponsored units.
"The steep decline in the trading volume reflects that investor
interest in share business is fading out each day," they said
adding "only some instant stimulants could put the market on the
road to a sustained recovery."
Big gainers were led by KASB & CO and Colgate Pakistan, which
posted gains ranging from Rs 6.00 to Rs 12 on active support. Other
good gainers were led by PSO, Fauji Fertilizer and Nimir Resins,
which rose by one rupee to Rs 2.00.
Top losers included Shell Pakistan, which ended with a clipped
gain, off Rs 8.40. Others leading losers were led by Clover Foods,
Balochistan Wheels, Security and Union Banks, Adamjee Insurance,
National Refinery, Dewan Salman and some others, falling by one
rupee to Rs2.30. About 90% of the volume was confined to PTCL and
Hub-Power followed by most of the low-priced MNCs, notably Engro
Chemicals and Fauji Fertilizer.
DEFAULTING COMPANIES: Mixed trend was seen on this counter. While
Bolan Casting and Khyber Textiles managed to finish unchanged on
500 shares each, Fawad Textiles was marked down by 25 paisa on
1,000 shares.
Back to the top
===================================================================
EDITORIALS & FEATURES
981018
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People-friendly police
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Ardeshir Cowasjee
ISLAMABAD: The beauty, the greenery, the weather, the prevailing
atmosphere of indolence coupled with sycophancy, the grandeur of
the prime ministerial hacienda-cum-palace, the silent uniformed
flunkies padding around, the utter calm all is more than enough
to lull anyone into believing that everything is more, much more,
than well with this nation.
On October 12, I met our prime minister. Alone, at a one-to-one
session, he is as 'normal' (within the meaning of the word 'normal'
as applied to those who conform to a certain mundane norm) as any
other man. He makes his views known to all, he hides little,
devious or otherwise, that goes on in his mind. He and I know each
other well enough to agree to disagree, without acrimony, and to be
able to talk on, to further disagree.
He now has about him an invincible air, all-powerful, having so far
sorted out to his satisfaction what are known as the 'pillars of
state'. Yet, as happens with all those who are 'in', he is unable
to comprehend that a country wherein subsist some 140 million souls
cannot survive for long on the misery of its people, though when
'out' he proclaims he is capable of doing so.
Economy: What can be done to kick-start it? he ponders. Nothing. It
is not a motorcycle. Credibility and confidence are lost in a
matter of minutes, but restored in years.
Karachi: Whatever else it may be, it is the sole port city this
country has, it is the hub, it is the financial centre. The first
and foremost concern of its people is the safety of their lives and
properties. All else follows. This government of Sindh, as with its
predecessors, incapable and inept, is also unwilling to provide
safety. The chief minister and his coterie concentrate on amassing
power and pelf. The government can just about survive with a weak
coalition; the on-off partners are unreliable and thrive on
terrorism, the means they employ to display their 'strength'. Their
'demands' are never-ending, pertaining only to their own needs, not
to those of the people of their city.
What is the answer? Mr Nawaz Sharif asks. Mine is simple
governor's rule.
The safety and security of the people of Karachi was the main topic
of discussion. Nawaz's 'monitoring cell' has discussed the subject
with those who run the Citizens Police Liaison Committee (CPLC).
Would I help? he asked. An important decision has to be taken on
police reforms. Why not? I know CPLC chief Jameel Yusuf and his
crew. I know their competence and dedication. I know the previous
joint chief, Nazim Haji, and how he and Jamil worked together,
night and day, at the expense of their own business. Both are
conscientious, selfless men in whom the people of Karachi have
faith. Given a choice, any citizen of Karachi in distress would
turn to the CPLC for help, rather than to the police.
The CPLC has been with us for almost a decade. They have suffered
and survived the chief ministers with whom Sindh has been blessed.
At close range they have watched and experienced the modus operandi
of police officers from the rank of DSP upwards. Their assessment
of men and material available is reliable and if strengthened, and
allowed to, they can be of enormous help in cleaning up the muck.
What is needed is public participation and the people's control of
their own protective force. Fine, said Nawaz Sharif, talk to the
CPLC and then come to the meeting I am holding at the Governor's
House on October 15.
The men of the PM's monitoring cell and of the CPLC have done much
research and for long have worked on a report concerning the
reorganization and revamping of the police force. They have no
doubts in their minds that Karachi would be well served by a
metropolitan police force to care for the needs of its large
(probably nearing 12 million) strife-ridden population. They have
studied the reforms report prepared in July 1996 by that able
policeman, the then IG, Police, Punjab, Mohammed Abbas Khan.
The aim is to work towards the Japanese model of policing,
initiated in 1947. Suggestions as to how this is to be implemented
have been fully covered in yesterday's Dawn.
The Japanese system is unique. It was created by legislation, the
objective of which was to reverse traditional Japanese policing and
create a force which would be democratically controlled, and, most
important, politically neutral (repeat, politically neutral). The
great warlord who later in life became a far-sighted, firm and
dedicated administrator, General Douglas MacArthur, originated the
system, and then enforced it.
In September 1947, the Supreme Allied Commander of the Occupation
Forces in Japan, whose job was to reform and administer the country
following the devastation of WW2, asked the Japanese prime minister
to create a new police force which would support and sustain the
democratic institutions being introduced in the country. Clear
guidelines were given. The Japanese prime minister conveyed them to
each head of the concerned government departments. Each department
head produced a list of a dozen or so reasons why MacArthur's
scheme could not work. The PM returned the lists, asking each to
define in full as to how their objections could be overcome. That
finished off the objections. A police force came into being in
December democratically controlled, politically neutral and
highly professional.
A new institution, the National Public Safety Commission (NPSC),
was created at two levels: the NPSC at the national level (five
members) and the Prefectural Public Safety Commission (three to
five members) at the provincial level. Before it could ensure the
maintenance of a politically neutral police, the commission itself
had to be politically neutral.
Members are nominated by the prime minister and appointed with the
approval of both houses of parliament. The law allows the
appointment of members of political parties provided they are not
politically active, and no more than two members may be affiliated
with one political party, thereby ensuring that no single party has
a controlling majority. However, the practice has developed that no
person with political affiliations is appointed. To fully ensure
political neutrality, members are appointed from amongst men of
national eminence lawyers, retired heads of corporations,
scholars, journalists, and so forth.
Commission members are appointed for a five-year tenure and may
only be removed if physically incapacitated or, if found guilty of
grave misconduct, with the consent of both houses of parliament
through a process of impeachment. Security of tenure acts as a
safeguard against pressures.
To illustrate the working of the NPSC, here is an extract from a
Japanese police experts committee report:
"The Chairman of the National Public Safety Commission is a
minister of state who represents the cabinet which is responsible
for public safety and order. The chairman normally has no right to
vote on decisions, so as to ensure independence of other members.
He is only called upon to vote in case of a tie.
"While the Public Safety Commissions have overall administrative
responsibilities for professionalism of the police forces on behalf
of the citizens, they do not have direct control over specific and
detailed police matters. They administer indirectly.
"In order for the Public Safety Commission to protect the police
from outer pressures and influences, the following measures are
taken in the field of personnel management:
"The National Public Safety Commission has the authority to
appoint/dismiss the Commissioner-General of the national police
agency with the approval of the prime minister; to appoint/dismiss
the Superintendent-General of Tokyo Metropolitan Police Department
with the consent of the Tokyo Public Safety Commission, and with
approval of the prime minister; to appoint/dismiss the chief and
high-ranking police officers (senior superintendent and above) of
each prefectural police with consent of the Prefectural Public
Safety Commission."
Nawaz Sharif met us on the 15th and despite opposition from the
'thekedars' (politicians and bureaucrats) ordered that the reforms
be implemented. He asked for a fixed schedule to be presented to
him on his return to Karachi on the 21st. This is the second most
significant action taken purely in the interests of the people,
with no extraneous strings, the first being his steadfast
declaration that the country will revert to Sunday as its weekly
holiday for its own economic and financial benefit.
Yesterday at 0800 hours I was told that Hakim Mohammed Saeed, a
good, honest citizen of Pakistan of whom, to the best of our
knowledge never a bad word has been uttered, had just been shot
dead. Why, I asked, as we must all have asked why. It defies
comprehension. The nation's sympathy goes out to his family who
will forever be asking each other just what it was he died for. We
must all bear the responsibility for allowing our society to
degenerate into the disgusting and brutal state in which it now
finds itself.
DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS
981024
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Teetering on the brink
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Irfan Husain
WHEN they gunned down Hakim Said last week, they deprived us of one
of the few role models left in a morally bankrupt society.
The news of his cold-blooded murder spread like wildfire. My mother
was shattered as he had been a family friend for years. A kind,
gentle man, he was the finest exemplar of the old school still
alive until his life was cut short by assassins' bullets outside
his Arambagh clinic. A lifetime of good works and philanthropy were
not enough to deter the terrorists who shot him down early last
Saturday.
But this is not intended to be Hakim Said's obituary:; other, more
qualified people have written about his enormous contribution to
this city and this country. For me, this crime was yet another
reminder of how unlivable and ungovernable Pakistan has become. It
demonstrates the government's incompetence. Unfortunately, it also
underlines the failure of the system.
I have often been accused of being a foot soldier of the doom-and-
gloom brigade, but every week when I sit down to write this column,
the news from all over the country inspires very little optimism.
Living in Karachi, one has become hardened to the daily death toll
as terrorists carry on their rampage unhindered by the state. But
Hakim Said's murder touched me more closely than most such killings
because he was neither a politician nor an activist. A healer and
an educationist, he was the last person one would have expected to
be a target. So if a man like him can be gunned down, who is safe?
And more to the point, if the state cannot protect him, whom can it
protect?
There is much talk these days of the "commissionerate system" as a
replacement for the present sorry excuse for a police force that we
have. The problem is that when the entire structure is close to
collapse, changing a brick or two is not going to help stave off
the inevitable. So no matter what model is adopted to replace our
present law and order apparatus, I am afraid it won't make Karachi
a safer place. While it will no doubt be an improvement over the
obsolete, ineffective system now in place, the new proposals cannot
operate in a vacuum: there will still be interference in
recruitment, police stations will still be auctioned, and salaries,
being linked to government scales, will continue to be absurdly low
and force policemen to extort bribes.
Above all, the fresh recruits will be products of the state
education system. In our context, this means that they will be
barely literate and unschooled in morality and ethics, despite
having undergone years of Islamic studies. The quota system further
ensures that the substantial majority of the new intake will be
from the rural areas, where state schools are even worse than their
urban counterparts, if such a thing can be imagined. The cops
inducted with this background will not, alas, tend to be models of
efficiency and honesty. In short, they will not be as "people-
friendly" as our prime minister would wish them to be.
The calibre of the police officers, too, leaves something to be
desired. Recruited through the prestigious Central Superior
Services examination, the Police Service of Pakistan cadre has
declined significantly in quality over the years, as indeed, have
all the other services. These officers have mostly graduated from
our ramshackle college and university system, and they, too, have
become infected with the get-rich-quick virus that has laid the
country low.
These, then, will be the backbone of any law and order system
introduced in Karachi. Even if somehow selection is on merit, I am
afraid the manpower available will be of such poor quality that it
is difficult to be enthusiastic about improvements. Also, the
present policemen will have to be retained, and the prospects of an
overnight transformation in their efficiency or attitude are fairly
remote.
Compounding the whole law and order problem is the fact that the
state no longer commands any respect: people know that the chances
of actually being convicted are fairly remote. Scores of suspected
terrorists were released by the government as part of a deal with
the MQM, and alleged murderers are routinely released on bail. The
law has little credibility left and can therefore not act as a
deterrent.
Frankly, I would love to be proved wrong in my assessment of the
new proposals being debated now, especially when some intelligent
figures are involved in framing them. But my experience over the
years has led me to conclude that there are strong and direct
linkages between education, good governance and public morality.
This is not any sudden insight, but a readily demonstrable truth
that obtains around the world.
In Pakistan, education has been neglected over the years to the
point where it bears no relationship to the needs of the economy
and society. Grossly underpaid, untrained and poorly motivated
teachers work in appalling conditions, while the students who do
manage to gain admission endure the abysmal instruction that is
inflicted on them. Day in and day out in classrooms around the
country, the bored confront the apathetic, and the result is a
waste of time for all concerned. To expect the products of this
system to become reformers and nation-builders is a bit
unrealistic.
We have reached the point where the disease is too far advanced for
medication in the form of rhetoric to cure. Radical surgery is
required. The points I have made about the police can be extended
across the gamut of national activities. While law and order issues
may touch us daily and directly, all government departments are
equally decrepit and crying out for change. Easier said than done,
I know. There are no surgeons on the horizon capable of removing
the gangrene-infected extremities, especially when the body is
rotting at the top.
At this point in Pakistan's history, politics and politicians have
become so inextricably a part of the problem that we can hardly
expect them to provide the solution to the country's many urgent
dilemma. We desperately need a stout broom to clean up the system
ruthlessly and impartially. Unfortunately, the only institution
that has tried to do so repeatedly in the past has botched the job.
the army's record in this area has been so heavily tainted by Zia
and Yahya Khan that we cannot have any great expectations from this
quarter.
While we ponder over our problems, and as our leaders unleash one
crisis after another, the next millennium advances implacably on
us.
===================================================================
SPORTS
981024
-------------------------------------------------------------------
14-man team for Dhaka to be named today
-------------------------------------------------------------------
Reporter
KARACHI, Oct 23: The 14-man Pakistan cricket team for the
International Trophy starting at Dhaka from Saturday will be named
at the National Stadium on Saturday.
Pakistan play the opening match against the West Indies on Oct 29.
The chairman of selectors, Wasim Bari, said he would finalized the
team after consulting his colleagues on Saturday.
"Since it is a foreign tour, we will have to inform the cricket
board about the team who would seek clearance from the executive
council. But in all probability, we will be announcing the team
tomorrow," Bari said.
Bari said there wouldn't be many changes in the team that beat
India 4-1 in the Sahara Cup last year.
"Barring a couple of changes here and there, the team would almost
be the same," he stated.
The chief selector said he has not been informed about Mushtaq
Ahmad's decision to skip the nine-nation tournament.
"I will get the feed-back about Mushtaq tomorrow," he said.
But skipper Aamir Sohail said the leg-spinner has confirmed to him
that he would not go to Dhaka in an effort to give rest to his
badly bruised knee.
"I and Javed Miandad had a long chat with Mushy. We advised him to
miss the Dhaka event so that he is fit for the series against
Zimbabwe and later for the tour of India.
"He agreed to our proposal," he said.
Saeed Anwar has also been given a clean bill of health and would be
going to Dhaka after stomach upset forced him out of the third Test
against Australia.
"It was in fact back strain because of stomach disorder. But I
consulted a specialist who has prescribed some medicines.
"I have not been advised any rest," Anwar said from Lahore.
Pakistan are unlikely to make any major changes in the Sahara Cup
side except that Wasim Akram would replace an injured Mohammad
Zahid and Arshad Khan would come for Mushtaq Ahmad.
Aqib Javed, who was Sohail's deputy on the Canadian trip but
overlooked for the series against Australia, is set to regain his
place to add more punch to the bowling line-up.
The likely 14 are:
Aamir Sohail (captain), Saeed Anwar, Shahid Afridi, Ijaz Ahmad,
Inzamam-ul-Haq, Salim Malik, Yousuf Yohanna, Moin Khan, Wasim
Akram, Azhar Mahmood, Shoaib Akhtar, Aqib Javed, Saqlain Mushtaq,
Arshad Khan.
DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS
981019
-------------------------------------------------------------------
Tennis: Khaliq and Nida retain singles title
-------------------------------------------------------------------
A. Majid Khan
KARACHI, Oct 18: Top seed Mohammad Khaliq inflicted a 6-1, 6-1
defeat on Tahir Iftikhar to retain the men's singles title while
teenage tennis star Nida Waseem, the defending champion, prevailed
over second seed Haleema Rahim 6-1, 7-6 (7-3) to keep the ladies
singles trophy of the second Salma Noorani Ranking Tennis
Tournament which concluded on Sunday at the Karachi Club hard
courts.
Davis cupper Khaliq of Habib Bank Limited, who in partnership of
Aqeel Ahmed, last night won the men's doubles final, today earned
the double crown, a feat he performed last week in the Union Cup at
the Karachi Gymkhana.
He got the men's singles winner cash prize of Rs 50,000 and a
beautiful cup , while top seeded Nida Waseem, a student of Convent
of Jesus and Mary, received the cup and a cash prize of Rs 30,000
for retaining the ladies singles title of the tournament whose
prize money was raised from 1,80,000 to Rs 2, 00,000.
Fateha was offered for Hakim Mohammad Said, Chancellor of Hamdard
University and former Governor of Sindh, who on Saturday was shot
dead by unknown assailants. Hakim Said was to preside over the
prize distribution function of the tournament today.
Chief guest Capt Haleema Siddiqui, the Minister of State for Water
and Power, who gave the prizes, in his speech recalled the
invaluable services of Hakim Said to Pakistan and his assassination
is a great tragedy for the nation. Hakim Said was a great man and
served every man, he stated Capt Haleema Siddiqui stressed on the
need of promoting healthy sports activities among the youth and
praised the organisers for holding tennis tournament. He extended
his help and support for the development of sports and games.
The President of the Organising Committee, Mr Jamil A. Sakrani,
also paid tribute to Hakim Said and announced to hold a tournament
in memory of Hakim Said, who himself used to play tennis even at
this advancing age.
Mr Sakrani, who is the President of the Karachi Club, stated that
the tournament has become a popular event. He said the KC would
continue to provide every facility for the ranking tournament,
instituted last year by Salma Noorani, a former national hard court
ladies and mixed doubles champion.
Earlier, Mr Munawar Z. Noorani, vice-president of the organising
committee, said that tournament attracted a large entry of over 300
and thanked all those who made the event ends in tremendous
success.
He said the organisers have now decided to sponsor teenage champion
of the ladies singles Nida Waseem for sending her for the coming
Asian Games to be held in December this year. The participation of
women in the Asian Games tennis depends on the sponsorship but the
men's team is to be funded by the Pakistan Tennis Federation, an
official of the PTF said here today.
According to the announcement already made, the winner of the
Under-18 singles champion would be sent for participation in the
ITF junior circuit of Bangladesh, Sri Lanka and India. Junior
champion Ahmed Wahla, a student of lahore American School, has
emerged the junior champion of the tournament.
The men's singles battle between defending champion Mohammad Khaliq
and last year runnerup Tahir Iftikhar turned out to be a one-sided
affair as the third seed from UBL could not match the brilliance of
the top seed.
Khaliq served with tremendous amount of power and accuracy,
unleashing a series of magnificent backhand passing shots and
returning the ball with blistering pace to force Davis Cupper Tahir
Iftikhar commit mistakes. Iftikhar's ground strokes lacked depth
and accuracy and he made many unforced mistakes.
Tahir did produce some fine double-fisted backhand drives down the
line but that were far and few. He only managed to break only one
serve of Khaliq in the fourth game of the second set and once he
held his own in the first set before he was virtually outplayed by
the defending champion.
Playing superably Khaliq went 3-0 up in the first set breaking
Tahir in the second game. Tahir held his serve to be 1-3 but there
after Khaliq took three more games in a row to take the opener 6-1
in only 25 minute.
Erratic Tahir was also 0-3 down in the second set as Khaliq
hammered a brace of forehand and backhand winners. However Khaliq
lost his serve and Tahir was 1-3.
Top seed looked in devastating form and seized every opportunity
for hit a winner as Tahir turned frustratingly erratic in the match
won by Khaliq 6-1.
Haleema Rahim of ABL last year runner-up, started in a confident
way when she broke Nida Waseem opening serve in the first set of
the ladies singles final. Nida Waseem found her touch and took
control of the game when she exerted pressure by hitting winner
after winner. Haleema was beaten by pace and power of Nida who won
by 6-1.
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