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DAWN WIRE SERVICE
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Week Ending : 27 June 1998 Issue : 04/25
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Contents | National News | Business & Economy | Editorials & Features | Sports
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CONTENTS
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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
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EDITORIALS & FEATURES
Beasts of prey Ardeshir Cowasjee
Once bitten... Irfan Husain
Kalabagh: need for a rational solution Saiyid Ali Naqvi
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SPORTS
Why is the subcontinent a nonentity in global soccer?
ICC Trophy dates announced
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NATIONAL NEWS
980624
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Pakistan trying to defuse tension: PM
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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
development.
He said economic progress depended upon scientists and
technologists.
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.
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980626
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Sindh PA says no to Governor's rule 'move'
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Reporter
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
killed.
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980625
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Centre offers to help Sindh stem violence
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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 ......"
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980625
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Essential goods again exempted from taxes
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Correspondent
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
1990.
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,
1931.
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980625
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Rs25bn mopped up: Govt replaces STFBs by T-bills
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Reporter
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
Wednesday.
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.
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980625
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Hasina welcomes proposal for talks
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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
concern.
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.
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980627
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Hubco's pact with PPP govt invalid, says Ehtesab bureau
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Correspondent
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.
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980626
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NWFP assembly approves budget
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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.
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980623
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NA okays 92 demands for Rs230bn
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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
passed.
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.
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980621
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'Essential drugs may disappear if prices not raised'
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Correspondent
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
company.
"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).
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980622
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Quake rocks Quetta
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Correspondent
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
Peshawar.
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
city.
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BUSINESS & ECONOMY
980627
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Credit cards costlier due to ban on FCY accounts
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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.
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980626
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Proposals invited for CBR's restructuring
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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.
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980627
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Index plunges below 900-level barrier, loses 36.38 points
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Reporter
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
unloadings.
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
shares.
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980626
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Exporters unclear on forward forex rates
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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
discounting.
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.
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980625
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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
value.
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.
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980624
-------------------------------------------------------------------
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.
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980623
-------------------------------------------------------------------
Additional incentives for raising deposits
-------------------------------------------------------------------
Reporter
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.
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980623
-------------------------------------------------------------------
Trade policy widely hailed
-------------------------------------------------------------------
Reporter
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
said.
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.
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980621
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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.
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980626
-------------------------------------------------------------------
Govt decision to restrict cotton export flayed
-------------------------------------------------------------------
Correspondent
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
policies".
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.
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980626
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Reserves fall to $946 million
-------------------------------------------------------------------
Reporter
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
===================================================================
EDITORIALS & FEATURES
980621
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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
Court?"
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
living.
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
office".
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.
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980627
-------------------------------------------------------------------
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
Birmingham...
"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.
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980626
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Kalabagh: need for a rational solution
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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
provinces.
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
storage.
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.
===================================================================
SPORTS
980622
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Why is the subcontinent a nonentity in global soccer?
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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.
DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS
980623
-------------------------------------------------------------------
ICC Trophy dates announced
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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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