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CONTENTS ===================================================================
NATIONAL NEWS Pakistan trying to defuse tension: PM Sindh PA says no to Governor's rule 'move' Centre offers to help Sindh stem violence Essential goods again exempted from taxes Rs25bn mopped up: Govt replaces STFBs by T-bills Hasina welcomes proposal for talks Hubco's pact with PPP govt invalid, says Ehtesab bureau NWFP assembly approves budget NA okays 92 demands for Rs230bn 'Essential drugs may disappear if prices not raised' Quake rocks Quetta --------------------------------- BUSINESS & ECONOMY Credit cards costlier due to ban on FCY accounts Proposals invited for CBR's restructuring Index plunges below 900-level barrier, loses 36.38 points Exporters unclear on forward forex rates SBP to subsidize special export exchange rate Dar spells out trade policy measures Additional incentives for raising deposits Trade policy widely hailed Foreign currency accounts allowed under new rules --------------------------------------- EDITORIALS & FEATURES Beasts of prey Ardeshir Cowasjee Once bitten... Irfan Husain Kalabagh: need for a rational solution Saiyid Ali Naqvi ----------- SPORTS Why is the subcontinent a nonentity in global soccer? ICC Trophy dates announced

Pakistan trying to defuse tension: PM
Bureau Report

ISLAMABAD, June 23: Prime Minister Nawaz Sharif hopes the 
international community would encourage Pakistan's efforts to 
defuse security crisis in South Asia and promote a just settlement 
of the Kashmir issue.
"We have continued to display great restraint and responsibility 
after the demonstration of our nuclear capability. We have 
signalled constructive engagement with the international community 
and India. We have offered concrete suggestions and we hope the 
international community will facilitate promotion of a credible 
process of peace and rapprochement in our region," he said.
Inaugurating the 23rd International Nathiagali Summer College on 
Physics and Contemporary Needs here on Tuesday, the prime minister 
paid compliments to the scientists in their endeavours to exploit 
nuclear energy for development and security. He particularly named 
Dr Abdul Qadeer Khan in this regard.
He said that, despite financial constraints, indiginization of 
technology and advanced research in science had a high place in the 
government's list of priorities.
Mr Sharif said the detonation of several nuclear devices by India, 
no longer camouflaged as "peaceful", did not come as a surprise.
"In fact, I had, only a couple of months back, drawn the attention 
of world leaders to such an eventuality. Our warnings went unheeded 
and even after the Indian explosions on 11th and 13th May, the 
reaction of world capitals was astonishingly muted." He said 
Pakistan was left with no choice but to respond to the unprovoked 
threats from across the border.
Mr Sharif said it was a tribute to the skill and confidence of 
Pakistani scientists and engineers that the nuclear tests were 
successfully carried out in the glare of world media and under the 
watchful eyes of spy satellites.
He said his government had consciously chosen the path of self-
reliance, which was beset with many difficulties.
He assured the Chairman of Pakistan Atomic Energy Commission 
(PAEC), Dr Ashfaq Ahmed, that as soon as the economic situation 
eased, the government would allocate more funds for research and 
He said economic progress depended upon scientists and 
The prime minister stressed the need for a multi-pronged approach 
to sustainable development of an indigenous capability in science 
and technology. "We must modernise our main sectors of economic 
growth agriculture and manufacturing. Without the creation of real 
national wealth,there will be a chronic shortage of resources for 
the social sectors, including teaching and research," he added.
He also called for improving the basic infrastructure of science 
and technology. "We must set up concrete targets in research and 
development, special projects and manpower development.
Earlier, Dr Ahmed said the PAEC was proud to have played a role in 
contributing to the development and defence of the country. He said 
the nuclear tests had become a source of impetus for national 
cohesion, consolidation and progress.
Sindh PA says no to Governor's rule 'move'

KARACHI, June 25: The Sindh Assembly, through a unanimous 
resolution on Thursday, voiced its opposition to a possible 
promulgation of governor's rule in the province and said it would 
not be acceptable to the people of Sindh and it would harm the 
democratic process.
The resolution was moved by MQM's Mohammad Hussain, supported by 
PPP members and unanimously passed by the House. It was moved under 
Rule 211 of the rules and procedures of the assembly, requesting 
the Speaker Nawab Mirza to set aside the usual business of the 
house and adopt it.
The assembly unanimously resolved that "the provincial government 
of Sindh should approach the federal government to inform that 
governor's rule is not acceptable to the people of Sindh hence it 
should not be imposed in the interest of democracy."
Earlier, the deputy leader of the opposition in the House, Pir 
Mazharul Haq, on a point of order, had drawn attention of the House 
to the Muttahida Qaumi Movement chief Altaf Hussain's concern, 
expressed in a press statement, that another state operation might 
be launched against MQM for opposing construction of the Kalabagh 
dam and governor's rule in Sindh.

Pir Mazhar urged the treasury benches to table a resolution with 
opposition's support as, he said, it believed in continuity of 
democratic process despite certain differences with the other 
parties in the House.
"We want continuity of the democratic process for which the PPP has 
given great sacrifices," he said.
He said the House must send a clear message to the Centre through a 
joint resolution that the people of Sindh stood united to uphold 
democracy and would not allow their fate to be decided in the 
governor house.
Sindh Housing Minister, Waseem Akhtar of MQM, intervened at this 
point and accused the PPP of having double standards.
"They are trying to be the champions of democracy but how can we 
forget extra-judicial killings during their government!" he 
demanded, adding that the PPP should repent what it had done in the 
past. He said the PPP should not seek political gain from newspaper 
reports about any possible imposition of governor's rule in Sindh.
"If the path of democracy is obstructed, Sindh would strongly react 
against it," said the Law Minister, Saleem Zia, adding that it was 
unfortunate that Sindh had been meted out such harsh treatment 
during the martial law and the MRD movement for democracy.
He conceded that the present situation was not an ideal one but 
governor's rule was not the alternative, he argued. He said the 
talk about governor's rule was neither in the interest of democracy 
nor of Pakistan.
Waseem Akhtar intervened and asked why the law minister had not 
mentioned the operation in which many MQM supporters had been 
Centre offers to help Sindh stem violence 
Raja Zulfikar

ISLAMABAD, June 24: The federal government has asked the Sindh 
authorities to contain the recent upsurge in violence in Karachi 
and offered to extend more help if the province needs.
Talking to Dawn on Wednesday, Interior Minister Chaudhry Shujaat 
Hussain said he had spoken over telephone on Wednesday to Sindh 
Chief Minister Liaqat Jatoi and told him: "We are ready to provide 
all help to control the situation in Karachi."
He said the federal government had told the Sindh chief minister to 
use "maximum force against terrorists" and that the federal 
government could send more forces to Karachi if the provincial 
government made a request.
He said the ordinance which had vested more powers in the Rangers 
had lapsed and this explained for their relative ineffectiveness 
now. "But if the provincial authorities feel they need it, this 
ordinance could be re-promulgated or some other remedy found."
The Sindh authorities, including the chief minister, are expected 
to arrive in Islamabad in a couple of days to have a high-level 
meeting on the Karachi situation. "We may discuss what more needs 
to be done to prevent further deaths in Karachi."
Asked what possibilities the federal government had examined to 
resolve the Karachi problem, the interior minister said the Sindh 
government had "Rangers with them to control the situation".
Chaudhry Shujaat said the provincial government had sought some 
time from the federal government and had vowed to stem the wave of 
terrorism, but he did not disclose how long the centre would wait 
and what it would do after that.
Replying to a question whether the federal government intended to 
impose governor's rule in Sindh or whether it wanted to place Sindh 
under federal control, the minister was tantalizing: "We would like 
them to take urgent steps to improve the law and order situation in 
Karachi and what we are trying right now is to see that they do so 
within the existing system but if it does not work, we will ......"
Essential goods again exempted from taxes 

ISLAMABAD, June 24: The Central Board of Revenue on Wednesday 
announced a revival of tax exemptions on essential goods by 
withdrawing the Finance Bill amendment in the Sales Tax Act of 
The announcement came in the wake of repeated complaints by 
parliamentarians that the withdrawal of exemptions had caused a 
price hike in the local market.
The revival order said the exemption on certain packaged food 
items, even when sold with brand names and trade marks, had been 
revived by withdrawal of the Finance Bill proposal for reimposition 
of these exemptions.
The items affected are poultry, mutton, beef, fresh and dried milk, 
yogurt, table salt including iodized salt, red chilies, ginger and 
turmeric, and milk-based food preparations.
An amendment in the Finance Bill moved for this purpose said: "The 
definition of the term 'retailer' is being made more exhaustive in 
the wake of the new retail scheme, so that the manufacturers, 
producers and importers continue with the system as was prescribed 
for them prior to the retail tax scheme. It is hoped that the 
recent price increase made on these items by certain manufacturers 
will be taken back and pre-budget prices restored with the revival 
of exemptions on these items."
The CBR officials explained that the revival of exemptions would 
become effective from the date of budget presentation, removing 
their withdrawal under the provisional collection of Taxes Act, 

Rs25bn mopped up: Govt replaces STFBs by T-bills

KARACHI, June 24: The government has replaced the six-monthly short 
term federal bonds with Government of Pakistan Market Treasury 
billsor just T bills from June 25. The short term bonds would 
remain legally valid until their respective dates of maturity.
A source close to the Ministry of Finance said the government has 
also decided to introduce treasury bills of three months and one 
year in due course of time.

He said copies of draft rules for the six-monthly treasury bills 
were supplied to the State Bank for onward distribution among the 
bankers. He said the bankers were given two weeks time to send 
their objections or proposals about these bills.
Bankers say these rules now stand approved and the State Bank has 
already conducted the first ever auction of treasury bills on 
They said the SBP raised Rs 25.452 billion worth of short term 
loans for the government by selling TBs at an average rate of 15.70 
per cent. They said the minimum and maximum yield offered by the 
State Bank was 14.70 per cent and about 15.90 per cent.
They said as the SBP sucked in Rs 25 billion from the system the 
inter-bank call rates shot up to 17.75 per cent adding that the 
rates eased off later on to settle at 16 per cent. They said some 
deals struck for one month repo between 14-15 per cent.
Bankers say the replacement of six-monthly short term federal bonds 
with the treasury bills of same maturity period would help the 
government show reduced liabilities in the shape of STFBs at the 
close of the fiscal year.

Hasina welcomes proposal for talks
Hasan Akhtar

ISLAMABAD, June 24: Bangladesh Prime Minister Sheikh Hasina Wajid 
on Wednesday welcomed "Pakistan's proposal to resume talks with 
India and discuss all matters including the Kashmir issue and for 
offering a non-aggression pact with India".
Ms Hasina who made an 8-hour visit to Islamabad to hold talks with 
Prime Minister Nawaz Sharif, said that her meeting here served to 
increase her understanding on the nuclear issue that concerns 
Pakistan and Bangladesh in one way or the other.
A statement of Bangladesh prime minister before her departure 
stated that Prime Minister Nawaz Sharif briefed his Bangladesh 
counterpart the necessity of responding to the Indian nuclear 
blasts with Islamabad's own in the interest of national 
sovereignty, territorial integrity and independence as well as for 
regional peace and security.
The Bangladesh leader had also visited New Delhi on June 16 for 
talks with Indian Prime Minister Attal Behari Vajpayee.
A Pakistan foreign office statement on the talks said prime 
minister reiterated Pakistan's willingness to enter into meaningful 
dialogue with India on issues pertaining to peace and security and 
Kashmir besides other matters.
Both the prime ministers are said to have agreed that for the 
regional development education, empowerment of women and 
recognition of the rights of child should be matters of priority 
Ms Hasina called for more frequent meetings at top level and said 
her present visit afforded her opportunity to develop upon the 
personal rapport established in their previous meetings with Mr. 
Nawaz Sharif during the last two years.

Hubco's pact with PPP govt invalid, says Ehtesab bureau

ISLAMABAD, June 26: The Ehtesab bureau (EB) on Friday told the 
supreme court bench hearing the Hubco case that the agreement 
(amendment 2) under which power rates for the Hubco were revised 
upward by the PPP government, was not binding on the present 
government as it was not valid in the eyes of the law.
Mr Fakhruddin G.Ebrahim, counsel for EB, argued that the amendment 
in the Power Purchase Agreement (PPA) with Hubco was made 
"fraudulently" with the collusion of some high officials, but it 
was not signed by a competent authority.
The government was not obliged to pay in accordance with the 
enhanced rates, Mr Fakhruddin contended. 
The court adjourned the proceedings till Monday. 
A lot of heat was created in the court room as two senior lawyers 
of the Supreme Court, Fakhruddin G.Ebrahim, and Mr Hafeez Pirzada, 
counsel for Hubco, exchanged abuses. The court asked them not to 
get provoked and maintain their cool. Senator Saifur Rehman, 
chairman of the EB, also attended the proceedings.
NWFP assembly approves budget
Bureau Report

PESHAWAR, June 25: The NWFP Assembly on Thursday approved the 
fiscal year 1998-99 budget of Rs 33,004 million through 46 demands 
for grants for various departments.
The maximum provision of Rs 13624.425 million was made for purchase 
of wheat and sugar from federal government followed by education 
which received Rs. 9700.00 million, health Rs 2410.00 million, 
irrigation Rs 1312.766 million and police Rs 1760.78 million.
The subsidy for wheat was placed at Rs. 3,000 million.
Earlier, the House discussed and gave its approval to 46 demands 
for grants after the opposition withdrew or did not stress on their 
cut motions in last three days.
Other demands for grants included Rs 254.72 million for the NWFP 
Assembly, Rs 109.90 million for excise and taxation, Rs 200.00 
million for Irrigation works excluding establishment charges, Rs. 
700.236 million for administration, Rs 105.104 million for 
administration of justice, Rs 110.875 million for jails and 
settlement of convicts, Rs 8.725 million for merged states, and Rs 
599 million for public health etc.

NA okays 92 demands for Rs230bn
Bureau Report

ISLAMABAD, June 22: The National Assembly on Monday approved 92 out 
of 157 demands for grant worth over Rs230 billion for the federal 
government for expenditure under various heads. Of these, 88 
demands were granted without any cut motions while the opposition 
pressed on four asking that money should not be wasted on what it 
said was a useless expenditure, the federal government wanted 
millions of rupees for.
The House rejected all the four cut motions moved by the opposition 
on Monday by dint of its majority. The opposition, however, 
expressed its views on these four motions for about two hours.
In all, the opposition parties, including the PPP, the ANP and the 
JUI, have moved 388 cut motions. Some of these also come from the 
Muttahida Qaumi Movement (MQM). An MQM leader, however, said his 
party may withdraw its cut motions, if necessary.
The members of the ruling party had to sit in the House till late 
in the evening as passage of budget neared its last phase. In the 
next two or three days, the House will continue discussion on the 
cut motions after which the government intends to get the budget 
The treasury benches had set a target of 13 demands on which the 
opposition had moved cut motions for approval on Monday. But only 
four demands could be approved. The rest are to be discussed when 
the House meets on Tuesday morning.
Opposition's demands on Monday related to a cut on the grant to the 
government to meet expenditure during the year ending June 30, 1999 
in respect of Cabinet Division. They also demanded that budget for 
the Intelligence Bureau should be reduced.
Opposition's Syed Khurshid Shah, Syed Naveed Qamar, Aftab Shahban 
Meerani, Babu Ghulam Hussain, Sattar Leghari and Waja Kareem Dad, 
however, attacked the performance of the federal cabinet and called 
that the sums allocated for the cabinet division must be reduced. 
Similar views were expressed by the ANP members.
Naveed Qamar said the cabinet was the highest executive body in the 
country but it had been sidelined in all important decisions 
including the Kalabagh dam issue, the nomination of the president 
and the like.
Sattar Leghari said it was the cabinet which had rendered people of 
the country jobless while Babu Ghulam Hussain said the cabinet had 
not taken any major decisions. Aftab Meerani said the battalion of 
ministers was unnecessary and therefore, its number should be 
reduced to save money.
'Essential drugs may disappear if prices not raised'

KARACHI, June 20: The essential drugs may start disappearing from 
the market if government does not allow the pharma companies to 
increase the prices, feared an executive of a multinational pharma 
"The pharma industry is in a fix as during the last 36 months there 
is only six per cent increase in the prices of drugs, endangering 
the survival of the industry," said Sulman Burni, Managing 
Director, Smith Kline & Beecham, at the presentation on "Ethics of 
Marketing" at the forum of Marketing Association of Pakistan (MAP).
Quake rocks Quetta

QUETTA, June 21: Earthquake of a mild intensity rocked Quetta 
besides other parts of northern Balochistan on Sunday night.
It measured 4.9 on the open-ended Richter scale, said the 
seismological network of Pakistan Meteorological Department at 
The tremor struck at 8:56 pm and its epicentre was in Suleman 
Range, some 160km north-east of Quetta, a Met office spokesman told 
Dawn correspondent.
Reports coming from other areas said the quake also hit Loralai, 
Harnai, Sibi, Shahrag, Ziarat and Duki area.
The tremors caused panic in Quetta and other areas as people rushed 
out of their houses, into open spaces for safety. 
However, no damage or casualty was reported from any part of the 

Credit cards costlier due to ban on FCY accounts 
By Mohiuddin Aazim

KARACHI, June 26: If you have a credit card issued in Pakistan and 
you are a foreign currency account holder pay Rs 4 more on every US 
dollar you spend through these cards  or just forget them.
Bankers said the holders of credit cards issued in Pakistan can now 
use them abroad provided they are ready to pay the open market 
price of their spending in dollars. When it comes to those who have 
their foreign currency accounts in Pakistan it means a loss of Rs 4 
per dollar because they can withdraw money from these accounts in 
rupees at Rs 46 per dollar whereas the open market price of a 
dollar has shot up to Rs 50.
"Previously a credit card holder had to pay from his foreign 
currency account directly if he maintained such an account," an 
executive of a foreign bank explained.
When the State Bank suspended operation of foreign currency 
accounts on May 28 it also banned use of credit cards abroad. After 
some time the bankers succeeded in persuading the banks to allow 
the use of these cards outside Pakistan and the SBP did it. But the 
SBP made it clear that it would not allow operation of credit cards 
through FCY accounts. Instead it gave the banks a free-hand to make 
whatever arrangement they can for remittance of the money from 
overseas in respect of spending through credit cards.
It was against this backdrop that the banks allowed overseas use of 
their credit cards. Now there are two ways to charge the holder of 
the card for his spending overseas. A bank can either ask the 
holder of the card to buy foreign currency from the open market and 
pay back the bank or else the bank itself makes the buying and 
settles his accounts.
Banks are working both ways but they have to buy the dollars 
themselves in case the user of the card is still not back home and 
his limit is over. In this case the banks are buying the dollars 
from the open market and remitting the same abroad through TTs.

Bankers have got the permission to make TTs against surrender of 
cash foreign currency only recently.
Credit card holders say they can arrange foreign currency to pay 
back their bankseither buy purchasing it from the open market or 
else receiving it from outside the country through illegal 
channelsmaking use of Hawala.
"I feel that our credit card market has been affected," said 
executive of a foreign bank engaged in credit card business. Credit 
card sales normally go up in the summer when the people tend to 
spend more...go on overseas trips or enjoy travelling around their 
own country. Bankers say this time the business is rather dull. 
They do not give figures.

Proposals invited for CBR's restructuring
Ikram Hoti

ISLAMABAD, June 25: The federal government has invited proposals 
from six international companies for advising the restructuring of 
the Central Board of Revenue.
These companies were short-listed after their having shown 
expression of interest for carrying out the process for procedural 
re-engineering of the CBR, reduction of tiers in the tax-
collecting/assessing bureaucracy and devising methods for 
implementation of changes intended in the tax policy under a 
restructured CBR as Revenue Services of Pakistan.
The companies short-listed are: Harvard Institute of International 
Development (United States); Maxwell Stamp (United Kingdom); 
International Bureau of Fiscal Documentation (Netherlands); IBM 
(US/Pak); Barents and Arthur Anderson (USA).
Meanwhile, the CBR Restructuring Committee has started working on 
the 5th bill of amendment in the Constitution for converting CBR 
into RSP. This bill has been vetted by the Ministry of Finance, Law 
Division, Ministry of Commerce and all other related organizations 
of the federal government.
Sources said the 5th bill aims at curtailing powers of the CBR 
chairman under the restructured set up, from those initially 
envisaged in the restructuring plan.

Index plunges below 900-level barrier, loses 36.38 points

KARACHI, June 26: The KSE 100-share index shed 36.38 points or 4 
per cent on Friday as the weakness of Hub-Power and PTCL spilled 
over to other counters on heavy foreign and institutional 
The index hit a new low after breaching the psychological barrier 
of 900 points and where the end will come nobody could precisely 
tell as it has fallen beyond investor perceptions.
"Values of blue chips are falling like the house of cards as 
investors want to get out of the market as early as possible," said 
a KSE member.
"There is always an imminent market collapse when negative economic 
news and deteriorating law and order situation combine," some 
others said.
They said the market has lost 150 points or about 9 per cent during 
the week and it is a big single-week loss judged by any standards.
Bulk of the selling in both the pivotals originated from foreign 
funds who are offloading positions owing to uncertainty on the 
political front and abnormal conditions in Karachi.
The KSE 100-share index lost the 36.38 points at 876.90 as compared 
to 913.28 a day earlier, eroding Rs 8 billion from market 
capitalization at Rs 262 billion.
The index early was down by 50 points but the subsequent short-
covering in PTCL and Hub-Power at their lowest level of Rs 15.90 
and Rs 12.25 enabled it to finish partially recovered.
"It is a pity to see blue chips such as Hub-Power, with an annual 
sales volume of Rs 22 billion, falling below its face value of Rs 
13.16 at Rs 12.90," some analysts said.
The current tariff cut row and legal battle has virtually wiped out 
the small investor from its bonafide list of shareholders as the 
losses he has suffered during the last two months are beyond his 
capacity to absorb, they added.
The management of Hub-Power has announced an interim dividend at 
the rate of 70 per cent and there were indications that the final 
could be around 150 per cent but now there could be no final, some 
dealers feared.
PTCL, another market leader, is also facing an identical sell-off 
but the reasons behind it are different and it could rebound any 
time after foreign investors stop selling, they added.
"The market is running in deeper recession each day and the 
disturbing feature is that there is no official intervention to 
save it from total collapse," said a leading KSE member.
Minus signs again dominated the list with Shell Pakistan and Lever 
Brothers being in the forefront of losers, falling by Rs 10 and Rs 
110.05 at Rs 153 and Rs 899.95.
They were followed by leading shares such as Bank Al-Habib, Adamjee 
Insurance, Delta Insurance, PSO, Engro Chemicals and some others 
falling by Rs 2.25 to Rs 5.40, the biggest decline of Rs 5.40 being 
in Engro Chemicals.
DEFAULTING COMPANIES: Barring Bolan Casting, which ran into profit-
selling and fell one rupee on 500 shares, other shares were traded 
at the last levels under the lead of Khyber Textiles on 3,500 

Exporters unclear on forward forex rates
Mohiuddin Aazim

KARACHI, June 25: Leading exporters want to earn windfalls by 
forward-selling of the dollars on increased premiums but they are 
not clear how to go about it.
The State Bank has allowed conversion of export earnings at the 
special exchange rate of Rs 46 per dollar but it has not said 
whether the exporters can make forward sale of the dollars at the 
same rate.
"The result is that many leading exporters who can sell huge stocks 
of the dollars in forward are holding back their plans," said 
treasury manager of a bank. "This has enlarged the gap between 
demand and supply of the greenback on forward counters thereby 
allowing the forward dollar premiums to keep moving up."
He said the issue was raised at a meeting of Pakistan Forex 
Association which groups treasury managers of local as well as 
foreign banks on Wednesday.
He said the meeting chaired by PFA President Hanif Akhai noted that 
the State Bank had also not clarified whether the special exchange 
rate of Rs 46 would apply to export bills discounting. The 
exporters whose export proceeds are due in future come to the banks 
to sell the same at a discounted price which is called export bills 
Bankers say since the conversion of export proceeds have been 
allowed at the special exchange rate of Rs 46 per dollar no 
exporter would be ready to forward-selling of the dollars or export 
bills discounting.
"PFA will approach the State Bank seeking some reliefs in the two 
areas...that will not only ease off the present liquidity crunch 
but will also pave the way for long-term development of the money 
market," one of the sources said. The short-term inter-bank market 
has been under a severe liquidity crunch for last two months.
The rates have lately begun declining after the State Bank cut the 
liquidity ratio of the banks from 18 to 15 per cent and cash 
reserve requirement on rupee deposits from 5 to 3.75 per cent. 
Still the inter-bank call rates oscillated between 14.50- 16.50 per 
cent and one month repo rates between 15.20-15.75 per cent.
SBP to subsidize special export exchange rate
Mohiuddin Aazim

KARACHI, June 24: The State Bank announced on Wednesday that from 
June 24 onwards the exporters would get Rs 46 per US dollar on 
their export earnings.
A SBP circular (F. E. 27) said the central bank would pay to the 
banks the difference between the normal exchange rates (Rs 44.05-Rs 
44.49 per dollar) and the special exchange rate. It means the banks 
would buy export proceeds at Rs 46 per dollar but they would claim 
the difference between their own exchange rates on a particular day 
and the special rate from the State Bank.
Earlier the State Bank had allowed conversion of existing foreign 
currency accounts and home remittances at Rs 46 per dollar in the 
same manner. That is the banks were allowed to claim the difference 
between their own exchange rates and the special exchange rate from 
the State Bank. No official word is available on the cost of the 
subsidy the State Bank will thus be providing to the banks but it 
would be in millions of dollars.
"This means the rupee has been devalued partly though the SBP has 
attempted to keep its impact restricted," said a senior banker. If 
he is to be believed the rupee has so far shed 3.38 per cent of its 
Pakistan last devalued its rupee by 8.7 per cent in the second week 
of October 1997. Since then rumours of rupee devaluation made many 
rounds in the money market but both the government and the State 

Bank denied any more devaluation in the current fiscal year ending 
30 June 1998.
Commerce Minister Ishaq Dar had announced in his trade policy 
speech on Monday that the export receipts would also be converted 
at Rs 46 per dollar. This announcement caused a confusion in the 
banking sector on Tuesday as the State Bank had yet not issued any 
circular to this effect.
Dar spells out trade policy measures
Ihtashamul Haque

ISLAMABAD, June 23: Minister for Commerce and Investment Ishaq Dar 
has announced new measures related to import and export including 
exemption to the importers of POL products from the requirement of 
opening of LCs prior to the issuance of bill of lading.
The minister announced a number of new measures which were not 
contained in the Trade Policy for 1998-99 and said that they would 
greatly benefit the importers and exporters.
Speaking at a new conference here on Tuesday, he said keeping in 
view genuine problems of the oil marketing companies, the import of 
POL products has been exempted from the requirement of opening of 
Letters of Credits prior to the issuance of bill of lading. 
However, the requirement of LCs will continue.
"The verification of hidden capital transaction in the context of 
import of machinery will now be done by the CBR instead of the 
State Bank of Pakistan," he said.
The temporary facility allowed under SRO 818(1)/89 will be replaced 
gradually with the provisions of SRO of NDND and manufacturing in 
bonds etc.
Barrel blanks for recoiless rifles, guns, mortars and other parts 
and accessories of arms have been made importable by the authorized 
manufacturing units in the public sector.
Aerial survey films have been made importable both by public and 
private sector.
Import of vegetable, potato, flower and other field crop seeds 
including tubers, rhizomes, roots, cuttings etc. will now be 
subject to drawing of seed samples and testing of seed quality of 
the Federal Certification Agency.
Import of tapes similar to "Velcro tapes" has been allowed.
The import of specific types of asbestos will now be subject to NOC 
from Environment Division.
The import of certain industrial chemicals which can be used for 
making heroin can also be used for medicines etc. will require NOC 
from Narcotics Control Division.
The provision of eligibility of commercial importers with valid 
drugs manufacturing licence for import of raw materials for 
medicines has been deleted.
Import of polypropylene woven (PPW) bags and jute bags will be 
subject to certain conditions such as hearing the particulars of 
Pakistani exporters.
H.S. Code (1996 version) will be adopted in I.T.C. schedule. The 
code used in Import Policy Order and Import-Export Procedure will 
be revised accordingly. Statistics Division will also adopt the 
H.S. Code of World Custom Organization (1996 version).
The import of all freely importable goods will be allowed for the 
purpose of re-exports in the Import Policy Order on the same terms 
and conditions as laid down in the Export Control Order.
Dar told reporters that Export Promotion Bureau will prepare a plan 
for a Pioneering Export Marketing & Product Upgrading Fund, partly 
based on Export Development Fund, to offer trading companies 
(primarily export manufacturers) who open back to back inland L/Cs 
and indirect exporters, grants on a matching basis, for export 
marketing, product upgrading and foreign enterprises collaboration.
Additional incentives for raising deposits

KARACHI, June 22: The State Bank on Monday gave an indirect go-
ahead to banks and financial institutions to raise deposits by 
offering additional incentives.
The SBP said banks and financial institutions were allowed "to 
introduce viable new products and mobilize deposit schemes provided 
the same are in accordance with principles of Sharia and reasonable 
profitability is earned.
"All such schemes should automatically be coped to the State Bank 
of Pakistan with full justification for their introduction," said 
circular no. 18 of Banking Policy and Regulation Department (BPRD) 
of the State Bank.
Bankers reached by Dawn said since the new circular was issued "in 
suppression of" BPRD circular no 22 of 15th July 1997 it is implied 
that they can lure depositors with additional incentives like 
insurance cover. The BPRD circular no 22 had advised banks/ 
development financial institutions and non-bank financial 
institutions "to desist from offering cash prizes, insurance cover 
or any other such incentives without specific permission of SBP."
It had further advised them that "any scheme if introduced in 
contravention of" the said circular "should be discontinued 
forthwith and if necessarysubmitted for explicit approval by the 
State Bank.
Bankers say the SBP has issued a new circular "in suppression of" 
BPRD circular no 22 to enable them to offer certain incentives to 
mobilise deposits. The circular was issued after the SBP announced 
a cut in liquidity ratio and cash reserve requirements besides 
lowering its repo rates to ease off the liquidity crunch the banks 
are facing.
"Mobilization of deposits has become the need of the hour as banks 
are facing liquidity crunch due to ongoing conversion of foreign 
currency deposits into rupees," said a banker. He said the State 
Bank appears to have realized that attempts to create additional 
liquidity through any measure would not work without the banks 
raising fresh deposits to make up for the outflow of funds.
Banks have already started offering higher rates of return on their 
new products to raise deposits.

Trade policy widely hailed

KARACHI, June 22: The Trade Policy for the year 1998-99, announced 
by Commerce Minister Ishaq Dar on Monday, has been widely hailed by 
trade and industry. 'It is a revolutionary policy which will 
provide all assistance in achieving $10bn export target,' commented 
leading exporters.
'The new trade policy has removed the deficiencies left in the 
budget 1998-99, exclusively required for boosting the sagging 
exports of the country,' a leading exporter of ready-made garments 
The exporters were unanimous in their view that there could have 
not been a better trade policy and the Commerce Minister deserves 
appreciations for taking these 'revolutionary' measures which had 
so far remained a dream for the exporters.
Acting President FPCCI, Mahmood Ahmed said that almost all the 
suggestions given by the apex body of trade and industry has been 
accepted and now it is up to the exporters to work honestly and 
take full benefits from these measures.
'All the segments of export trade will be equally benefiting from 
these measures and I am sure the new trade policy has taken a 
special care of the textile sector which had been lately 
complaining of rapidly falling exports,' he added.
Mahmood Ahmed said by allowing the exporters to get the exchange 
rate of Rs 46 against their export proceeds will help to arrest the 
falling competitiveness of Pakistani products in the world market.
Chairman Pakistan Bedwear Exporters Association (PBEA), Shabir 
Ahmed thanked the Commerce Minister for giving a status of Export 
Processing Unit (EPU) to those manufacturers whose 70% production 
is exported. In do so, he said such units will not have to pay such 
levies as Sales Tax, Customs Duty and withholding tax on the 
purchase of raw material.
'After getting such sweeping benefits I believe no reason is left 
for the exporters to complain particularly when the mark-up for 
export refinance scheme has been reduced to 8%' he added.
Chairman, Pakistan Hosiery Manufacturers Association (PHMA) 
Southern Zone, Salahuddin Malim was all praise for the new Trade 
Policy and said the new scheme for giving allowances on successive 
increase in exports will go a long way in boosting exports. He said 
it is an incentive which could induce exporters to keep working 
harder and harder in order to get a maximum allowance or one could 
say subsidy of% on enhancing upto 100% in exports.
Salahuddin lauded the new policy for allowing the exporters or 
ready made garments to import duty free accessories upto 5% of 
their exports.
Chairman APTMA (Southern Zone), Humayun Ellahi Shaikh said by 
restricting raw cotton exports upto two lakh bales during first 
three months of the cotton season a long standing demand has been 
accepted. He said APTMA had been asking the government not to allow 
free export of raw cotton till such time when final production 
figures are not made available.
He said by doing so the government has ensured the availability of 
raw material of the largest industrial sector and added that 
formation of Textile Commission under the chairmanship of Dr Hafiz 
Pasha will help resolve issues facing the textile industry.

Foreign currency accounts allowed under new rules 
Mohiuddin Aazim

KARACHI, June 20: The State Bank on Saturday allowed opening of 
fresh foreign currency accounts from Monday (June 22) under a new 
scheme. The scheme, however, leaves no provision for maintaining 
the existing foreign currency accounts except by those exempted 
from the ban on FCY accounts imposed on May 29.
"It has been decided to allow opening and free operation of new 
foreign currency deposit accounts by residents as well as non-
residents under new rules," announced SBP circular (F.E.25) issued 
to banks on Saturday.
Under the new scheme, banks and non-bank financial institutions are 
not required to surrender their foreign currency deposits to the 
State Bank "nor the State Bank will provide a forward cover in 
respect of such accounts." The circular says banks and NBFIs "will 
also be free to recover reasonable bank charges on handling cash 
transactions in foreign currencies received in or paid out of such 
transactions." It further says that "the balances of new foreign 
currency accounts will not be required to be reported to the State 
Bank ...."
"These salient features of the new scheme suggest the extent to 
which foreign exchange regime has been further liberalised," said a 
senior executive of a bank.
Once the new scheme comes into force, no new foreign currency 
account will be opened under the old scheme, nor any fresh credit 
made into the existing FCY accounts except interest or profit and 
the items in transit on May 28, 1998. The circular says that home 
remittances in the existing non-resident foreign currency accounts 
of overseas Pakistanis are allowed to be credited but the same can 
be withdrawn only in rupees at a exchange rate of Rs46 to a dollar.
"The exempted category of account-holders may continue to operate 
their existing accounts in accordance with the existing 
instructions or may open new accounts in terms of this circular, if 
they so wish," the circular said. It further said that the SBP 
would continue to provide forward cover "for permitted fresh 
credits in the existing (FCY) accounts as well as for F.E.45 
deposits." The term F.E. 45 deposits means the foreign currency 
deposits raised by the banks from abroad under a certain set of 
rules laid down in F.E. 45.
The recent SBP circular said the government had decided that the 
foreign currency accounts opened under the new scheme would enjoy 
the protections available under the Protection of Economic Reforms 
Act of 1992. Earlier, the government had said only those foreign 
currency accounts would enjoy such protections which were converted 
into rupee accounts by August 30, 1998. The move was seen by 
bankers and international investors as the worst example of 
inconsistent policy. The circular further said the banks and NBFIs 
would maintain a separate ledger for the new foreign currency 
accounts to distinguish them from the existing ones.
It said the regulations relating to cash reserve requirement/ 
statutory liquidity ratio and capital adequacy ratio would also 
apply to new foreign currency deposits. It said the figures of 
assets and liabilities in foreign currencies would be converted 
into rupees at the buying rate of the bank concerned and reported 
to the State Bank. The circular said since NBFIs do not quote their 
own currency exchange rates they may adopt consistently the rates 
quoted by any commercial bank. The same would apply to any bank 
that does not quote exchange rate for a particular currency.
The State Bank gave no reason for a swift change in its policy on 
foreign currency accounts but senior bankers say the change aims at 
further liberalisation of foreign exchange regime and minimising 
dollarisation of the economythough artificially besides creating 
liquidity in short-term local currency market.
Govt decision to restrict cotton export flayed

MULTAN, June 25: Progressive Growers' Forum (PGF) has severely 
criticized the recently announced Trade Policy in which the 
government has announced to restrict the export of cotton to 0.2 
million bales.
The Forum president Mr Mukhtar Paras has demanded that the 
government should do away with this new 'discriminatory, and biased 
'policy that only aimed at facilitating the industrialists at the 
cost of poor growers who were already facing huge losses due to 
continuous cotton crop failure for the last many years.
Mr Mukhtar also predicted that as a result of this new step, 
growers facing cotton virus nightmare would stop cultivating cotton 
and would opt for other crops. The office-bearers of the PGF, Mr 
Mukhtar Paras, secretary Mr Roshan Malik in a press conference held 
here on Thursday to address the issue of restriction of cotton 
export and its after-effects, gave detailed briefing to the newsmen 
on the subject. They said at long last the government after 
propagating its pro-farmer stance for one year had come out with 
its real designs "to crush the cotton growers to feed the business 
tycoons. "Instead of helping the cotton growers the government was 
trying to ruin them by introducing such "immoral and unjust 
Coming to the core issue, they further said that the cotton crop 
was in real crisis. "Growers were already suffering huge losses due 
to substandard and low potential cotton varieties, deadly pests, 
like cotton leaf curl virus, American bollworms, bad weather 
conditions, sale of substandard cotton seeds and pesticides, 
skyrocketing prices of agriculture implements, depressed output 

prices etc." they informed. At this juncture, they added, the 
growers were expecting a 'lucrative' incentives to save the crop 
that was vanishing from cotton belt rapidly.

Reserves fall to $946 million

KARACHI, June 25: For the first time during the current fiscal year 
(July/June 1997/98) Pakistan's foreign exchange reserves fell below 
$1 billion mark on June 20.
The State Bank said on Thursday that the reserves declined to $946 
million on June 20 from $1.027 billion on June 13. As usual it did 
not give any reason for the fall in the reserves but senior bankers 
linked it to debt servicing and depleting inflow of foreign 
currency funds from abroad.
So far a total fall of $325 million has been recorded in the 
reserves after Pakistan test-fired nuclear devices on May 28. 
Pakistan had foreign exchange reserves worth $1.271 billion on May 
30 which declined to $1.081 billion on June 6 and then to $1.027 
billion on June 13. But so far the country has paid its external 
debt instalments on time.
The latest State Bank report says that on June 20 Pakistan had 
approved foreign exchange reserves worth $641.243 million whereas 
its balances held abroad in cash and short term securities were 
equal to $304.694 million. On June 13 the two figures were quoted 
at $687.815 million and $339.417 million.
Bankers link the continual fall in the reserves to increased 
outflow of foreign currency swap funds and suspension of home 
remittances in foreign currency for more than two weeks after the 
May 29 ban on FCY. They also attribute it to less-than-projected 
inflow of export proceeds and the inability of the government cut 
the imports substantially.
Back to the top
Beasts of prey
Ardeshir Cowasjee

THE lament of the great Russian writer, Alexander Solzhenitsyn, on 
his country's government: "Criminal is the government that throws 
the national property up for grabs and its citizens into the teeth 
of beasts of prey in the absence of laws."
Where laws, logic and reason prevail, the beasts that exist in 
every society are checked by a strong independent judiciary. Since 
Jinnah's death, no government of this country has allowed an 
independent judiciary to function. The judiciary itself has not 
helped by succumbing to various pressures. Now, after the 1997 
vicious attack upon it from outside and its own manipulated attack 
upon itself from inside, when it wishes to do good by the people it 
finds itself helpless. The leader of the opposition, following the 
example set by the government, now has a lawyer-mob of 500 to 
defend her. Which judge has the temerity to order "Clear the 
Last week, former Chief Justice of India Proful Bhagwati was on the 
box participating in a panel discussion, in the course of which he 
said, "During my 27 years on the Bench, I never once served a 
notice of contempt, regardless of what was said about me or my 
judgments." What a proud statement for a man to make. In 1982, when 
Arun Shourie's three scathing articles analysing Bhagwati's 
judgment in the Gupta case were printed in the Indian Express, 
Bhagwati responded by sending for Shourie and having a long 
discussion with him during which he significantly remarked, "I 
think it was Mr Justice Jackson who said that judges are more often 
bribed by their ambition and loyalty than by money."
In this newspaper of record, on page 3, on Friday June 19, Izharul 
Hasan Burney very correctly warned the people of Sindh:
"Govt plans to legalize unauthorized constructions." Just not 
possible, said I to Burney. Absolutely possible, he told me. In his 
budget speech, Liaquat Jatoi actually said: "It is also proposed to 
amend the law suitably to provide an opportunity to builders for 
having their unauthorized buildings regularized on payment of 
prescribed charges. However, these charges will be deposited in the 
government treasury and these shall be spent on development."
To reconfirm, I sent a fax to Shahid Nazir, secretary to the chief 
minister, asking him what mischief his government was now up to.
The normally elusive Shahid (for whom one has to leave five 
messages before he responds) rang back saying there was some 
misunderstanding. The transcript which had been circulated to the 
press the day before on the 7th floor of the Sindh Secretariat had 
been prepared by the financial adviser to the CM, Sardar Ahmad. But 
he would reconfirm with his chief minister.
Poultry farmer Sardar Ahmad, a former chief secretary of Sindh, 
later served in the Port Qasim Authority from where he was 
peremptorily retired. He was re-employed by his friend Liaquat 
Jatoi and given the rank of a minister. He has been assigned the 
task of auctioning off the Karachi Road Transport Corporation's 
open amenity plots to commercial builders. "Criminal is the 
government that throws the national property up for grabs.......".
Shahid rang back, after talking to the CM, reaffirming the 
"misunderstanding." The Sindh government published its rebuttal on 
page 3 of this newspaper on June 20.
The corrupt government and officials and the even more corrupt 
builders can never comprehend the old saying: "Doctors' mistakes 
are buried; lawyers' mistakes hang; architects' (and errant 
builders') mistakes stand." What is built and stands where it 
should not have been built forever disturbs the lives of the 
people, the environment of the city, the provision for parks and 
open spaces, road-widening schemes, and many other facets of urban 
Just take one area of Karachi. When one crosses the Clifton Bridge, 
going towards Clifton, on the left hand side stands Prince Complex. 
Rukhnuddin, an old builder of Karachi, built this complex 
correctly, setting it well back from the road allowing for the 
planned road-widening. Next to it stands the PSO tower, again duly 
set back, with the front road-expansion area covered by a raised 
terrace which can conveniently be levelled off and the basement 
underneath filled up to facilitate road-widening.
Next to this is the under-construction monstrosity that is Glass 
Towers. It protrudes on to the road itself and, if corruption 
permits this protrusion to stand, it will forever block road-
widening from the bridge up to the Teen Talwar roundabout. Before 
builder Hashim Motta Patel of Excel Builders laid the foundation, I 
pleaded with him, "Don't do it. Your corrupt political and 
bureaucratic accomplices will either be sacked or transferred, you 
will build, sell, and go, and the road expansion project will be on 
hold for at least a hundred years. Just don't do it."
Hashim persisted, Barrister Gilbert Naim-ur-Rahamn was awoken, it 
was established that to, begin with, the commercial building was 
being raised on an unlawfully converted residential plot, many 
other faults and illegalities were found, and the citizens went to 
court. On the first date of hearing the good judge Wajihuddin Ahmed 
granted a stay. Whilst the stay was in force, the builders, in 
connivance with the authorities, continued to construct the inner 
portions deviating from the approved plan. The petition was finally 
disposed of by a bench presided over by Kamal Mansur Alam J., who 
ordered that the protruding portion be demolished.
The builders filed an appeal in the Supreme Court. It was heard in 
chambers by Justice Saeeduzzaman Siddiqui who issued an ex-parte 
order restraining further action. The citizens filed a counter-
appeal. Both appeals were admitted by Justices Saeeduzzaman 
Siddiqui and Irshad Hasan Khan. The chamber orders were modified. 
By consent of both parties, it was ordered that should the builder 
wish to construct further on the protruding portion he would do so 
entirely at his own risk. As far as the remainder of the building 
is concerned, any additional construction shall be carried out 
strictly in accordance with the approved plan, and if, during the 
course of construction, the KBCA finds that the plan is being 
violated, it will be free to take action ( demolition included) in 
accordance with the law.
Subsequently, many deviations were detected and the KBCA issued a 
notice suspending further construction. The builders filed another 
application in the SC without notice to the citizens or the KBCA. 
Justices Saeeduzzman Siddiqui, Irshad Hasan Khan, and Wajihuddin 
Ahmad issued an ex-parte order modifying the consent order, saying 
: "Notice to the KBCA. No demolition in the meanwhile. Date in 
Construction is now at a standstill. The KBCA inserted a public 
notice in the press on May 28 informing the public that this 
project "has been raised in violation of approved building plan," 
and that "occupation of the building or any part thereof before the 
issuance of Occupancy Certificate/Completion Plan shall be at the 
risk, cost and consequences of the persons concerned."

The amount of harm corrupt officials can permit is visible on the 
same side of the Clifton Road between the Teen Talwar roundabout 
and the Nahar-i-Khayyam, in Plots 8 and 9 of KDA Scheme 5, under 
the planning control and administration of the Clifton Cantonment 
Board (CCB). Few buildings in this area conform to rules or 
regulations and have been raised to various heights according to 
the whims of the CCB. Many basements planned as car parks have been 
sold as commercial spaces.
Beyond the Nahar, over all the years, no commercial building was 
allowed. But, at the Do Talwar roundabout, where 34 traffic lanes 
converge, on the corner of Zamzama Boulevard that leads to the 
Defence Housing areas, one commercial highrise has raised its ugly 
head  The Plaza, pride of Shaista Estates. The citizens have been 
in court since the young Wajihuddin Ahmad (now a Supreme Court 
justice) was advocate-general of Sindh in the early 1980s. A full 
account of their travails in the Sindh High Court and Supreme Court 
would fill volumes.
Last month, the petitions and related appeals of Shaista's Plaza 
were finally heard by Chief Justice Kamal Mansur Alam and Nazim 
Siddiqui J. of the SHC. Their judgment is awaited. The stay granted 
by Justices Ghous Mohammad and Syed Saeed Ashad continues.
Karachi's citizens are lucky in that resistance to the building 
mafia has been institutionalized. The torch has been passed on to 
Engineer Roland de Souza, ably assisted by Architect Hasnain Lotia, 
both of SHEHRI, both very competent, and both almost half my age.

Once bitten... 
Irfan Husain

AS a recent letter to the editor of this newspaper reminded me, it 
was Abraham Lincoln who said: "You can fool all the people some of 
the time, and some of the people all the time, but you can't fool 
all the people all the time."
Nevertheless, our rulers insist on trying to fool all of us all of 
the time. They think they are pulling it off for a while, and are 
lulled into complacency before the boom is lowered and they are out 
on the streets once again. The new lot then go through the whole 
cycle all over again, thinking they are smarter than their 
predecessors, and can hang on forever. But their greed soon gets 
the better of them, and we go through the whole thing yet again.
Rather than accept Lincoln's epigram, Pakistani politicians prefer 
to base their thoughts and actions on Damon Runyon's formula of 
"there's a sucker born every minute." Indeed, Pakistani politics 
resemble nothing less than smash-and-grab robbery seen in slow 
motion. Take the current scheme to drum up contributions for the 
"National Self-Reliance Fund" as an example. Both resident and non-
resident Pakistanis have been targeted, and the media are 
hysterically hyping up the campaign. Even my old friend Anwar 
Maqsood has been roped in by PTV on a live telethon to sell smelly 
old cricket bats and squash rackets when I know he would rather be 
watching World Cup soccer matches at home.
As the government beats the "self-reliance" drum here and abroad, 
the response has been distinctly underwhelming. Everybody wants to 
know what happened to the money they put into the kitty for the 
"qarz utaro" campaign that was launched when Nawaz Sharif came to 
power last year. And people also want to know how much he and his 
Muslim League cronies are contributing. It is not enough for him to 
move out of his hideous prime ministerial office and residence; 
they want to know how much he is personally contributing. In other 
words, it's a case of "show me the money."
Overseas Pakistanis, the targets of Nawaz Sharif's special 
entreaties, have not exactly rushed to the banks to send their 
life's savings to fill the empty Pakistani exchequer. The reasons 
for this reluctance were recently expressed in a delightful e-mail 
from a Mr Noor Ahmed, a UK-based reader of this column on the 
Internet edition of Dawn. Let me explain in passing that ever since 
my e-mail address has started appearing with my column in the 
electronic version of this newspaper, I have been flooded with 
mail. I am quoting from this particular letter at some length 
because, apart from humour, it contains a lot of sense:
"Our beloved PM has been on another milking mission to milk the 
sacred cow of overseas Pakistanis of yet more dollars, to "save the 
nation." Hitherto, always generous and cooperative out of 
unquestioning patriotism, now the brainless bovines have started to 
ask some searching questions. Moo! they mumble, from Bradford to 
"Your Excellency, Britain is a fairly wealthy country. However, the 
PM here travels by car or train, and has a minimum number of staff. 
Parting with our hard-earned cash to finance your private aircraft 
and helicopter journeys for weekend leave, and your armies of 
sycophants... does not make much sense to us...
"Most ordinary professionals here pay income tax at the rate of 40 
per cent... Tens of thousands of pounds every year. Yet we remember 
that when the [caretaker] government of Moeen Qureshi published the 
figures, the combined tax contribution of the two most Sharif 
brothers of Pakistan amounted to... less than 5 thousand rupees. We 
applaud your exhortations to your citizens to pay their taxes 
honestly, and can only conclude that Mercedes cars and huge 
mansions must be dirt cheap in Pakistan to be affordable on incomes 
yielding so little income tax!
"We duly remitted large sums of money in response to your first 
"qarz utaro" appeal as soon as you took power. We were assured that 
our foreign exchange was safe in your hands... we trusted you. Now 
you have confiscated this in exchange of pieces of paper that are 
rapidly becoming worthless. Will anyone ever again trust the 
government of Pakistan? Not on your Nellie, as they say over here. 
It took decades to build up sufficient confidence in the Pakistani 
banking system for people overseas to invest in it; you have 
managed to wipe this away in a single stroke... In banking history 
you will be remembered as the Nuclear Prime Minister  the one who 
nuked investor confidence...
"Excellency, you must never assume that our love for our country 
translates into a love for the governments that run it... It would 
be a... pity to perpetuate the subjugation of our people by 
propping up successive bad governments through ill-founded 
patriotism. Our pound notes will therefore firmly stay in our 
pockets. The cows in Britain may be mad but are definitely not 
stupid..."  Unfortunately for the "self-reliance fund" and its 
managers, I suspect that Mr Noor Ahmed is not alone in holding 
these views. People somehow assume that our compatriots working 
abroad have it made, and can (and should!) send thousands of 
dollars home whenever our rulers have emptied the exchequer through 
their follies and corruption. The reality is that overseas 
Pakistanis work their butts off, pay their taxes, and have 
relatively very little to show for all their hard work after 
meeting all their expenses. To expect them to remit their savings 
at Rs 46 per dollar (as against Rs 50 in the open market) is 
stretching both their patriotism and their gullibility.
Unfortunately, Nawaz Sharif's credibility is in tatters. He has not 
told us what he did with the money he collected under the "qarz 
utaro" scheme, and now expects us to fork out more in these 
inflationary and recessionary days. Also, there is still a large 
question mark hanging over the tens of millions of dollars that 
fled to safer shores hours before the freeze on foreign exchange 
accounts was announced. How did these fortunate few get the inside 
information that allowed them to make fortunes overnight? And for 
the government to expect people to open new foreign currency 
accounts after taking such a heavy hit on their old ones seems to 
indicate a touching but misplaced faith in our simplicity. The 
finance ministry appears to have learned from Nigeria where the 
government froze foreign exchange accounts three times. Obviously, 
Nigerians aren't as cynical as we are.
All this goes to show that the government can't fool all of the 
people all of the time.

Kalabagh: need for a rational solution
Saiyid Ali Naqvi

"WHY stir up a hornet's nest?" aptly queried a Dawn's editorial 
commenting on the prime minister's May 9 address on electronic 
media, in which Mr Nawaz Sharif did not talk about Kalabagh Dam, 
although the meeting of the Council of Common Interests (CCI), held 
earlier that day, had aroused speculation that he was going to 
announce the long-awaited decision to build the Kalabagh dam.
But, this was prior to May 28, the day the nuclear tests were 
conducted by Pakistan. Elated by the mass euphoria generated by the 
nuclear tests and armed with the near absolute power conferred on 
him by the declaration of emergency soon after the tests, Mr Nawaz 
Sharif decided to abandon the policy of political expediency in 
regard to the thorny question of building the controversial dam, 
practised since General Zia-ul-Haq's days, and confidently 
announced in his June 11 radio and TV address on "national agenda" 
that the Kalabagh Dam would be built.
As expected, this announcement caused an uproar. Responding to the 
strong anti-dam reaction of the three provinces, the NWFP, Sindh 
and Balochistan, the prime minister partially backtracked on his 
earlier statement and announced on June 19 that the dam would be 
built only after removing all doubts and developing a national 
consensus. Does it mean we are back to square one in regard to the 
Kalabagh Dam? Perhaps, it is not so, because the June 11 
announcement has unfrozen the unresolved issues surrounding the 
Kalabagh Dam. The prime minister has also announced his resolve to 
remove what he calls apprehensions and misgivings of the three 
Before discussing how best the issues can be resolved, let us 
dispassionately consider if there is a convincing rationale for 
creating a multipurpose storage reservoir on the Indus and for 
choosing the Kalabagh site for such s reservoir.
A World Bank-sponsored study of Pakistan's water and power 
resources, conducted in mid-1960s, had predicted that the need for 
a second storage on the Indus (Tarbela was to be the first) could 
arise in late 1980s or early 1990s. The study had also concluded 
that the Kalabagh site was the best amongst the sites that were 
examined. Accordingly, WAPDA undertook detailed site investigations 
and feasibility studies. Based on these studies the project 
preparation was completed in mid-1980s. At this stage, however, 
concerns about the impacts of the dam were voiced by the NWFP and 
Sindh. But, instead of addressing those concerns, the country's 
military rulers, fearing a political backlash, opted for the policy 
of political expediency and conveniently put the project in cold 
The country had to spend a lot of hard-earned foreign exchange on 
the import of wheat to meet the widening gap between the demand of 
a growing population and domestic wheat production. Just over the 
past 10 years, more than 24 million tonnes of wheat had to be 
imported. Of this 4 million tonnes (25% of the demand) was imported 
in 1997 at of cost of $1 billion to the already depleted exchequer. 
The continuing production shortfall, which would run into the next 
century, is largely the result of the shortage of irrigation water 
during the rabi season (October-March)  owing to insufficient 
reservoir capacity to store flood waters of the Indus. The foreign 
exchange amounts spent annually on the import of wheat over the 
past 10 years, may add up to twice the foreign exchange amount 
needed to build the Kalabagh Dam to store, for use in the rabi 
season, 6.1 MAF of the 35 MAF of water that flows down to sea 
annually. A stupendously heavy cost to the country, indeed.
An even heavier cost to the country and the people has been caused 
by the shortage of power generation capacity, particularly 
hydropower capacity, resulting from the failure to build the dam. 
In 1994, the power shortage reached a staggering level of 2,600 MW, 
or 27% of peak demand, and estimates of the overall impact of 
loadshedding on the economy amounted to about one billion dollars 
annually. To address this problem special incentives were offered 
to private power producers to install thermal power generation 
plants. While the loadshedding has been substantially overcome by 
these measures, the consumer has been compelled to bear the higher-
cost of electricity resulting from the increased percentage of high 
cost thermal power.
An idea of the heavy cost borne by the country and the people as a 
result of the enormous increase of thermal power capacity ratio, 
can be gauged from the following facts. After the commissioning of 
the first four power units (700 MW) at Tarbela in June 1977, the 
hydropower and thermal power ratio in the system was: 57% hydro 
(1,390 MW) and 43% thermal (1,047 MW). By 1995, when Tarbela had 
all of its 14 units (3,478 MW) on line, the ratio was almost 
reversed and became: 41% hydro (4,825 MW) and 59% thermal (7,055 
MW). Of the present total capacity of 14,500 MW, the hydropower 
(4,825 MW) is only 33%, while thermal (9,675 MW) is 67%. By 2001, 
the ratio is likely to become 25% hydro and 75% thermal. With the 
commissioning of 1,450MW Ghazi-Barotha Hydropower Project in 2002, 
the ratio would improve to 30% hydro and 70% thermal, giving little 
relief to the consumer.
An additional capacity of 10,000 MW may need to be installed during 
the next decade, (2001-2010) to meet the rising power demand. 
Therefore, to raise the hydropower ratio only to the modest 1995 
level of 41%, hydropower projects with a total capacity of 6,500 MW 
will need to be commissioned. It is well known that the only major 
project with confirmed feasibility and detailed engineering study 
which can be undertaken in time to be completed during the decade, 
2001-2010 to provide as much as 3,600 MW of hydropower is Kalabagh. 
In order to achieve 41% ratio for hydropower during that period, 
additional projects with a total capacity of 2,900 MW will need to 
be commissioned along with Kalabagh. Do we have such projects in 
the pipeline?
A recently completed Asian Development Bank-sponsored study has 
concluded that of the 75 identified projects only five with a total 
capacity of 1,344 MW have been studied sufficiently for seeking 
bids from the private sector. These are Neelum-Jhelum (969 MW) and 
four small-capacity projects (total 375 MW). Therefore, though it 
would be a tall order, let us hope that additional small and medium 
capacity projects with a total capacity of around 1,500 MW would be 
speedily prepared for implementation over the period 2001-2010 in 
order to meet the 41% hydropower ratio target for that decade.
It should now be quite clear that the small and medium-capacity 
projects can supplement but cannot substitute for Kalabagh. Basha 
(3,360 MW and 5.7 MAF storage) has been studied only to pre-
feasibility level and further studies are required to confirm the 
feasibility of the project. As such, it can neither substitute for, 
nor it can supplement Kalabagh in the decade in question. 

Hopefully, the comprehensive feasibility studies would be completed 
soon enough for the project to be undertaken so as to be 
commissioned by the middle of the following decade, 2011-2020.
Now, let us revert to the question as to how best the issues 
surrounding the Kalabagh Dam can be resolved. It is well known that 
over the past two decades large dams have been the subject of 
intense international debate between the proponents and opponents 
of dams. The opponents have been arguing that the proponents of 
large dams downplay the social and environmental costs of such 
projects, and as a result, inflated benefit figures are used in the 
evaluation of economic and financial returns of large-dam projects. 
The World Bank and other international financial institutions have 
been blamed by the large dam opponents for supporting environmental 
degradation and for not sufficiently caring for affected 
communities, uprooted by the dams.
As a result of the world-wide campaign against large dams, some 
half a dozen large dam projects, proposed to be executed by 
developing countries, have failed to receive international 
financing. To address the problems created by this controversy, the 
World Bank and IUCN-the World Conservation Union jointly organized 
a workshop in Switzerland last year where the stake-holders and the 
dam opponents, after a bitter debate, agreed to establish a World 
Commission on Dams to develop guidelines which would meet the 
concerns regarding social and environmental aspects of large dams. 
The Commission was established early this year with a two-year 
mandate to "develop internationally acceptable standards for 
planning, assessment, design, construction, operation and 
monitoring of large dam projects."
Inevitably, therefore, the $7 billion Kalabagh Dam project will 
need to conform to the internationally accepted guidelines 
developed by the World Commission on Dams. Therefore, it is 
advisable for the government to have a comprehensive social and 
environmental impact study carried out by a team of impartial 
independent experts of international repute, preferably selected 
with the advice of the Chairman of the Commission on Dams.
The findings of the study will constitute a concrete basis for 
achieving national consensus and obtaining support of multilateral 
and bilateral financial institutions.

Why is the subcontinent a nonentity in global soccer?
Lateef Jafri

The year's greatest footballing show is already launched for the 
earthly delight of not only the French fans but billions of sports 
enthusiasts round the globe. As the soccer hysteria has soared and 
touched new heights the spectators at 10 French venues enjoy and 
cheer the attractive skills of the combating combinations. The 
families in Europe, Americas, Africa and far-off Asia are also 
glued to their TV sets to witness the aesthetics of the game and 
the exciting exercises beyond midnight.
Even though Henry Kissinger may have said that a passion for soccer 
is the best training for a diplomat, it is essentially a people's 
game  a poor man's recreation if one visits the Katchi Abadis of 
old Karachi and the suburbs of the city in Malir and its extension. 
Same is true about Quetta. It is the simplest of sport with the 
simplest possible rules which were laid out in 1863. These were to 
bring order to the playing-fields.
The game does not require many costly implements  a ball of 27 to 
28 inch in circumference with a weight of 14 to 16 ounce will do. 
Goals may be erected from wooden poles. It can be played with bare 
feet  for competitive soccer boots are needed. How is it a 
people's game? The British colonialists introduced it to their 
expanding empire, the textile workers brought it to Russia, the 
miners and railroad labour took it to the Americas. If at all it is 
a poor man's game how is it that the subcontinent, and especially 
Pakistan, is going down the hill? Samad of Assam demonstrated 
football's arts and graces. Not only there was elegance in his 
movements, his fascinating speed, effervescence and mode of play 
motivated other members of the Mohammedan Sporting Club of Calcutta 
to give of an exciting display. This was in the twenties. When the 
Corinthians, consisting mostly of England's first eleven players, 
toured the length and breadth of the subcontinent just before the 
second world war erupted with all its horrors they swept aside the 
Indian formations with their dexterity, combined thrust and 
mobility. Mohammedan Sporting's Emad, following in the footsteps of 
Samad, time and again, weaved a web around the English defence. 
*From a right spot the striker provided the finishing touch to 
firmly boot home a winner for his team.
Samad the junior, Hafiz Rashid, Majeed, Hafeez, Taj Mohammad Sr, 
Jumma Khan and Ismail Jan attracted hundreds of football 
enthusiasts to witness their wizardry, never mind, the palpitating 
anxiety about the results of the matches. In later years Yusuf and 
Dooraiswamy represented the agile feet of the south.
Pakistan too exported its style and chivalrous spirit in Moosa and 
Umer, two vigorous Sindh attackers of yore. The Englishmen were 
enchanted by the thunderous pace, bewitching skill and match - 
winning power of Fakhri, the famed left winger of Punjab.
Why, the Pakistani fans would like to know, the standards have 
declined? Pakistan was unrepresented at the last SAF Games in 
Madras. At Hiroshima a year earlier in the Asian Games, Uzbeskistan 
stunned China with their long passes and an apparent touch of 
assurance. Even South Korea was relegated to a fourth spot. 
Pakistan, trying to build a squad to face the brave new world of 
modern football, were thrown out of regional qualifiers. The 
selected pack did not have the coordination and sharpness to punch 
holes in the rival defences. Long ago, in the fifties, Pakistan had 
given an energetic performance against an enthusiastic West Germany 

at the YMCA ground of Karachi. Even though losing, the home side 
pleasingly matched the ingenuity and improvisation of the Germans. 
That gave the glee to the onlookers as the final whistle was blown.
Group bickerings, lack of interest in the officials, scarcity of 
grounds  grassy surface  methodical coaching and proper 
programming of competitions may be taken as some of the factors 
responsible for the steep fall which has made Pakistan a non-entity 
in global soccer.
In this age of marketing and sponsorship when millions are poured 
into sport and multinationals spend bagful of money on their logos 
and on contracting the boards on the fields and in the cities why 
can't they be invited to procure turfs for players' practice and 
tournaments? The bare KMC ground is packed to capacity for soccer 
games but is it well-maintained or good enough for competitive 
football. Same is true of the Railway ground in Karachi. Apart from 
army centres the venues in the country are few and far between. 
Only the interest of one firm will not be fully helpful to the 
cause of national football. Let a combination come forward to 
secure, prepare and maintain grounds for a game that is the centre 
of attraction throughout the world, particularly during the 
quadrennial World Cup, now being staged in France, next time set to 
be held in Japan and South Korea.
The feud among officials must come to an end, if at all the game 
has to show a steady rise in its level. Why should greedy and 
ambitious persons, running only after offices, be given the charge 
of the country's football. Honest, hard-working and energetic 
people, having ideas of planning, must come forward to give boost 
to the game. Soccer has base in the country. If the poor play it 
every evening and night the decline in its standards can be 
arrested. Round-the-year coaching of talented players along with 
competitions throughout the land can revive the game. Let the 
officials and the multinationals join together to chalk out the 
mode and method to rescue the game. Foreign coaches are necessary, 
like the Gulf countries and Saudi Arabia.
It is possible the tactics and technique may be a ticklish problem 
for the Pakistani bosses and coaches, as also for the other South 
Asian guides. The Europeans prefer long and high kicks which 
quickly send the ball soaring near the target for dodging a few 
defenders, booting it straight into the net or directing the ball 
through the head or chest. The defenders and the goalie are on test 
and trial. The Latin Americans move ahead with short, adroit 
passes, exhibiting magical dribbles, rotating the feet for the 
delight of the connoisseurs. The ball is charmed into the goal, 
exquisitely and unbelievably. The methodology is a technical 
problem which can be sorted out by an expert coach. A mingling of 
the two styles  the European and South American  will benefit the 
Pakistanis. The requirements to throw down the gauntlet on the 
regional nations are speed, strength and physical fitness, which 
push the human body to perform extremes. Players have to be well-
muscled but not fat. The global experts are agreed that height is 
unimportant. Pele, the Brazilian wonder, is just 5ft.8 in tall.

ICC Trophy dates announced
By Our Sports Reporter

LAHORE, June 22: The West Indies was chosen as venue of the ninth 
World Cup Cricket Tournament to be organised in the year 2007.
If the West Indies failed to upgrade their match centres in the 
next five years then some of the World Cup matches may be  staged 
in Bermuda, Canada and the USA.
Pakistan Cricket Board (PCB) released some details of the ICC 
decisions here on Monday. The PCB chairman Khalid Mahmood and chief 
executive Majid Khan also attended the ICC meetings. The PCB 
announcement said that the ICC also decided to hold the World 
Under-19 Cricket Cup after every two years.
Canada was selected as venue of the next ICC Trophy. The 
competition is organised among the associate members of the ICC. 
Ireland, and USA were also candidates for hosting the competition. 
Canada will host the contest in July and August, 2001.
The ICC knock-out Tournament involving all the nine Test-playing 
countries will be held in Dhaka from Oct 24 to Nov 4.

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