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CONTENTS ===================================================================
News Flash : Pakistan conducts 2 more nuclear tests: Pakistan confirmed that it has carried out two more underground detonations of nuclear devices this afternoon (Sat. 30-05-98). The tests were carried out about 13:10 Pakistan time, at the Chagai test site in Baluchistan province near the border with Iran and Afghanistan, where the previous 5 tests were conducted on Thursday. The yield was initially estimated to be about 18KT each. The father of Pakistan's nuclear weapons program, Dr A Q Khan has said that all the 5 devices tested on Thursday were boosted fission devices. "One was a big-bomb with a yield of about 30 to 35 kilotons... the others were small tactical weapons of low yield.. they can be used on the battlefield" he said. -AFP NATIONAL NEWS Pakistan opts to go nuclear: PM Tests aimed at restoring strategic balance: PM Poland keen to invest in Pakistan Pakistan, India should show restraint: US Dr Abdul Qadeer: a legendary scientist 3 exchange rates for currency operations Politicians hail N-explosions Inquiry ordered into Fokker hijacking Blasphemy law: Christians want correct application PC being turned into empowered division --------------------------------- BUSINESS & ECONOMY CBR completes 1st round of budgetary proposals on taxes Plan to net tax evaders, loan defaulters SBP gathers details to mount watch Habib Bank to be privatized by June 30 WTO considering new proposal on dumping duties NEC to review economic conditions Sharp fall in credit flow to manufacturing sector KSE reverses decision on T+3 system --------------------------------------- EDITORIALS & FEATURES Storming of the Supreme Court - 6 Ardeshir Cowasjee Now the real test Kunwar Idris The high cost of post-blast sanctions Sultan Ahmed ----------- SPORTS Australia send Pakistan out of World Cup Pakistan ill-prepared for coming World Cup Basit, Moin, Inzamam join camp

Pakistan opts to go nuclear: PM 
M. Ziauddin
ISLAMABAD, May 28: Pakistan on Thursday joined the exclusive club 
of nuclear nations by conducting five nuclear tests of varying 
intensity in Chagai hills, a remote region of Balochistan desert 
near the border with Iran and Afghanistan.
Announcing the successful completion of a series of tests in 
response to those conducted by India on May 11-13, Prime Minister 
Nawaz Sharif told the nation on radio and television that he took 
the decision in the interest of national security and integrity.
He, however, warned the nation to be prepared to pay the price for 
taking this decision in the face of immense world pressure.
The prime minister said in a few days time he would present to the 
nation a complete national agenda for meeting the anticipated 
He announced a number of official austerity measures to meet the 
challenges of the expected sanctions and asked the nation to 
reciprocate by trying to live within its means.
The prime minister also served final notice on the country's tax 
evaders and corrupt tax collectors cautioning them to mend their 
ways otherwise he warned that the government would not spare them.
He assured the nation that the government would stop forthwith all 
of its demonstrative and wasteful expenditures and said all 
palatial official buildings would be pressed into the service of 
the nation. Some of these buildings would be turned into schools, 
some into hospitals and some others into women's universities. And 
some would be sold to retire debts.
The prime minister announced that he would not use the Prime 
Minister's Secretariat and said the government has decided to 
observe complete austerity at the official level.
He said the president was in complete agreement with these 
decisions and all provincial governors, chief ministers, federal 
ministers, chiefs of navy, army, and air-force and high civil and 
military officials will join the nation in its sacrifices and 
austerity efforts.
He asked those who had borrowed billions of rupees from the banks 
to return the national wealth and warned tax evaders to give up 
their anti-national habits.
Describing the nuclear tests as a defensive step, the prime 
minister said these tests were conducted solely in the interest of 
national security and integrity.
Prime Minister Nawaz Sharif said every time Pakistan brought to the 
world attention India's massive arms build up, New Delhi attributed 
it to Chinese threat to India's security. But he said despite its 
tremendous superiority in defensive capability China was against 
expansionism while India had proven on more than one occasion that 
it harboured strong expansionist ambitions.
Under the circumstances it was natural for Pakistan, Mr. Nawaz 
Sharif said, to feel concerned and in order to ward of the threat 
to national security, the country had even proposed that America, 
Russia and China should mediate and save Asia from arms race.
He said if Pakistan had wanted it would have conducted nuclear 
tests 15-20 years ago but the abject poverty of the people of the 
region dissuaded Pakistan from doing so. But the world, he said, 
instead of putting pressure on India not to take the destructive 
road imposed all kinds of sanctions on Pakistan for no fault of 
He said after the Indian tests, Pakistan had expected the world to 
impose a total economic blockade on India but unfortunately no such 
action was taken.
Prime Minister Nawaz Sharif praised China for its support during 
"this hour of crisis" and said Pakistan was proud of its great 
Stating that Japan's position on the nuclear issue was based on the 
highest human principles, he, however, thought if Japan had had its 
own nuclear capability Hiroshima and Nagasaki would not have 
suffered destruction.
Tests aimed at restoring strategic balance: PM  
Ihtasham ul Haque
ISLAMABAD, May 28: Prime Minister Nawaz Sharif on Thursday defended 
Pakistan's nuclear tests by saying that they were aimed at 
restoring the strategic balance disturbed by Indian tests.
"All the five nuclear tests conducted successfully today released 
no radioactivity and results were according to expectations," he 
told a news conference held at the PM house.
The prime minister did not provide details about the specification 
of these tests, nor did he mention anything in his written 
statement about the site.
He also did not take questions.
The foreign office is expected to release technical details about 
the tests on Friday.
Unlike the Indian prime minister and some of his ministers who had 
been issuing highly provocative statements eversince India 
conducted its test, Mr Nawaz Sharif offered New Delhi a dialogue to 
remove differences between the two countries.
"We are prepared to resume Pakistan-India dialogue to address all 
outstanding issues, including the core issue of Jammu and Kashmir, 
as well as peace and security. These should include urgent steps 
for mutual restraint and equitable measures for nuclear 
stabilization", he added.
"Pakistan has already offered a non-aggression pact to India for 
the resolution of the Jammu and Kashmir dispute. I would like to 
reiterate this offer", he said.
"We are also ready to engage in a constructive dialogue with other 
countries, especially major powers, on ways and means for promoting 
these goals in the new circumstances".
The prime minister also announced that Pakistan would continue to 
support the goal of nuclear disarmament and non-proliferation, 
especially at the conference on disarmament bearing in mind new 
realities. "Pakistan has always acted with utmost restraint and 
responsibility and it will continue to do so".
"We have instituted an effective command and control structure. We 
are fully conscious of the need to handle these weapon systems with 
the highest sense of responsibility".
The prime minister gave an assurance that Pakistan would not 
transfer sensitive technologies to other states.
At the same time, he added, Pakistan would oppose all unjust 
embargoes aimed at preventing it from exercising its right to 
develop various technologies for self-defence or peaceful purposes.
"I would like to again assure all countries that our nuclear 
weapons systems are meant only for self-defence and there should be 
no apprehension or concern in this regard", he added.
The prime minister said the entire nation was taking a justifiable 
pride in the accomplishments of the Pakistan Atomic Energy 
Commission, Dr A.Q. Khan Research Laboratories and all affiliated 
organizations. "They have demonstrated Pakistan's ability to deter 

Poland keen to invest in Pakistan
Staff Correspondent
FAISALABAD, May 29: Poland was keen to make heavy investments in 
Pakistan in steel and steel products, dyes and chemicals and power 
generation plants, said Commercial Counsellor of Poland, 
Vilencisikey, while addressing members of the Faisalabad Chamber of 
Commerce and Industry (FCCI) here on Thursday.
He said since Pakistan was more advanced in textile sector than 
Poland therefore Pakistani investors could launch joint ventures in 
this sector in his country and also invest in power stations, 
cement, sugar plant, cargo oil containers and fishing sectors.
He assured Poland government's full cooperation in this connection 
and said the FCCI could also play an important role.
He said Pakistan imports heavy construction machinery, tyres, 
industrial chemicals, diesel engines, generators, transformers, 
sugar and tractors from Poland while his country imports footballs, 
textile fabrics, yarn, fish, rice, fruits and fruit juices from 
Export from Poland was less than its import, he added. Raw lather 
and cotton waste in huge quantity was being imported from Pakistan, 
he stated. Vilencisikey said Poland was being included in the 
European Union. President of FCCI, Mian Javaid Iqbal, said that 
exchange of trade delegations between the two countries could be 
instrumental in promotion of joint ventures.

SBP gathers details to mount watch
Mohiuddin Aazim
KARACHI, May 29: The State Bank of Pakistan (SBP) on Friday 
gathered hurriedly the details of foreign currency accounts 
maintained with the commercial banks.
Senior bankers told Dawn the SBP had sought the information to 
mount a closer watch on foreign exchange transactions to avert a 
flight of capital after Pakistan's five nuclear tests on May 28.
"Banks worked till late in the evening to provide the details to 
SBP teams," said senior executive of a bank. He said the SBP had 
sought the information on a three-page format covering key aspects 
of foreign currency accounts and foreign exchange transactions. 
"Banks provided some information on Friday and the rest would be 
furnished on Saturday."
The banker said the format required the banks to disclose the total 
number of foreign currency accounts with the break-up of the US 
Dollar, Pound Sterling, Deutsche Mark and Japanese Yen. He said the 
banks were also asked to give the break-up of resident and non-
resident FCY accounts. The format required the banks to give the 
break-up of the non-resident accounts in terms of the accounts of 
banks and financial institutions and the accounts not belonging to 
banks and financial institutions. "This information would help the 
central bank assess how much of foreign currency accounts were less 
visible and more vulnerable to market shocks."
The SBP also asked the banks to provide the names and addresses of 
every foreign currency account holder maintaining an account with 
their branches. The central bank also sought their account numbers 
along with the closing credit balance as of 28th May 1998. 
Immediately after conducting five nuclear tests on May 28 the 
government had stopped operation of foreign currency accounts and 
the information about the closing credit balance of FCY accounts as 
of that date is to check the violation of this order -if any. The 
information would also help the SBP devise some strategy to meet 
any eventuality in the foreign exchange regime.

Pakistan, India should show restraint: US
Shaheen Sehbai
WASHINGTON, May 29: The US on Friday sent out urgent calls to both 
Pakistan and India "to prevent a further deterioration of the 
situation and further escalation," as US agencies said Pakistan was 
ready for more tests.
White House spokesman Mike McCurry said the US had delivered to 
both the governments a very strong demarche through its embassies 
in New Delhi and Islamabad "that tells both countries that further 
testing and further efforts to weaponize military capabilities 
would worsen rather than improve the situation.
"We also pointed out to both countries separately the significant 
negative consequences to our bilateral relationship as a result of 
the separate decisions that both governments have made."
The White House is preparing the sanctions that automatically go 
into effect because of the nuclear testing, and expects to make 
that public later May 29, he said.
Asked if the US has evidence that Pakistan is preparing another 
round of tests, McCurry said the United States is monitoring the 
situation carefully and believes "dangers remain."
Asked why the United Nations Security Council took no action in its 
discussions on the matter May 28, McCurry said the Council "had a 
very good, important discussion" on the South Asian situation. "It 
was clear that governments are very concerned about the tests," he 
One member of the Security Council had to get instructions from his 
government and was unable to do so because it was the middle of the 
night in that capital, McCurry noted. He said the Security Council 
"is seized of the matter and may have something more to say today."
The Press Secretary noted that President Clinton phoned China's 
President Jiang Zemin May 25. The substance of the conversation, he 
said, "was our mutual concerns about the situation in South Asia 
and ways in which it could be addressed."
Clinton "also asked if he could send National Security Advisor 
(Sandy) Berger to China for the preparation of his upcoming visit 
and President Jiang Zemin said he was delighted to make 
arrangements for Mr. Berger to be received in Beijing for planning 
purposes for the upcoming state visit." Berger leaves May 31 for 
The call was the first use of the communications link that the two 
governments announced when Jiang Zemin was at the White House in 
October, McCurry said. "It allows voice and data communication," he 

Dr Abdul Qadeer: a legendary scientist
Bureau Report
ISLAMABAD, May 28: Dr Abdul Qadeer Khan, project director of the Dr 
A. Q. Khan Research Laboratories, has a long and distinguished 
career which includes an M.S. from Technical University of Delft 
(Holland), and a Doctorate of Engineering from the University of 
Leuven (Belgium). 
He worked as an expert in various European organizations, including 
the Urenco Uranium Enrichment Plant.
Dr Khan returned to Pakistan in 1976 and joined the Engineering 
Research Laboratories. As a tribute to his services to the security 
of Pakistan on May 1, 1981, the Engineering Research Laboratories 
at Kahuta, were renamed as "Dr A.Q. Khan Research Laboratories", 
which is an industrial uranium enrichment plant for peaceful 
application of nuclear technology.
He has made other contributions by strengthening Pakistan's defence 
capability by manufacturing sophisticated equipment including anti-
aircraft and anti-tank guided missiles for the Armed Force.
Dr Khan is a fellow of the Kazak National Academy of Sciences, the 
first Asian scientist conferred with this honour and Pakistan 
Academy of Sciences; member of various international and local 
professional organizations.
He has been awarded 13 gold medals by various national institutions 
and organizations for his meritorious services to the nation.
Dr Khan is an active research scientist. He has published about 150 
scientific research papers in reputed international scientific 
He has authored a renowned book, "Topics in Physical Metallurgy", 
and edited four proceedings of the International symposia on 
Advanced Materials (ISAM 1989, ISAM-1991, ISAM-1993 and ISAM-1995). 
In view of his distinguished contribution in science and 
technology, Dr Khan was awarded an honorary degree of Doctor of 
Science (D.Sc.) by the University of Karachi in 1993.
Dr Khan takes an active and keen interest in the promotion of 
scientific and technological education in Pakistan. As project 
director of the Ghulam Ishaq Khan Institute of Engineering Sciences 
and Technology, Topi NWFP, he is working hard to build an exemplary 
educational institution with academic standards.
3 exchange rates for currency operations
M. Ziauddin
ISLAMABAD, May 29: Pakistan will be operating three exchange rates 
from Saturday - one for official purposes, one for the conversion 
of foreign currency deposits and the third to be fixed by the 
licensed money changers whose licenses are being restored on 
Finance Minister Sartaj Aziz told a Press conference here on Friday 
that the dollar rate would remain pegged at Rs 44 for official 
purposes, eg opening of L/Cs, for essential travel and for 
remittances of educational fees for Pakistani students abroad, 
dividends and profits.
And for the purpose of conversion of foreign currency deposits into 
rupees, banks will be allowed to maintain a rate of Rs 46 to a 
The finance minister did not say what rates the licensed money 
changers would be allowed to fix for their operations, implying 
perhaps that they would be free to trade foreign exchange at rates 
dictated by the market.
Answering a question, the finance minister said the decision to 
freeze foreign currency accounts was taken to avert a possibility 
of a sudden dip in foreign exchange reserves, estimated at 1.3 
billion dollars.
He gave an assurance that the accounts would be unfrozen as soon as 
the uncertainty emanating from the nuclear tests died down.
However, financial analysts said the freeze was applied to keep the 
foreign exchange applecart from getting upset before May 30, on 
which date a debt repayment obligation of 500 million dollars was 
After the Press conference, the finance minister talked to Dawn and 
disagreed with a suggestion that by imposing a freeze on foreign 
exchange deposits, the government had in fact imposed sanctions on 
itself as this would discourage the flow of foreign private capital 
into the country.
He also dismissed a suggestion that while the entire nation had 
supported the government on the issue of nuclear tests, the 
government had declared no confidence in the patriotism of the 
people by freezing their foreign currency accounts.
Answering another question, the finance minister said he did not 
see any reason for changing annual development plan targets for the 
next financial year. The parameters for ADP were finalized at two 
meetings on May 14 and 21 by the coordination committee.
The finance minister was asked if there was any possibility that 
these targets would be revised downwards by the national economic 
council at its meeting on Saturday.
The finance minister, however, said next year's ADP targets would 
be affected by revenue collection.
"We had to scale down this year's ADP targets because of shortfall 
in revenue collection. If we achieve the revenue collection target 
fixed for next year without any problems, there would perhaps be no 
need to make any downward revision in the development targets," he 
Politicians hail N-explosions
By Our Staff Reporter
KARACHI, May 28: The five nuclear tests on Thursday were largely 
hailed by local politicians who termed it a historic achievement 
for Pakistan.
Greeting the nation, the nuclear scientists, the government and the 
army, they said with the carrying out the tests the government had 
not only equalled the strategic balance in the region but had also 
earned a dignified status for the Pakistan in the world community.
Jamiat Ulema-i-Pakistan chief Maulana Shah Ahmad Noorani and Vice 
President Prof Shah Farid-ul-Haq said this bold decision of Nawaz 
Sharif was of historic importance for which the prime minister, Dr 
Abdul Qadeer Khan and his colleagues and Gen Jahangir Karamat 
deserved congratulations. They had rightly responded to the 
aspirations of the nation despite tremendous foreign pressure, the 
JUP leaders said.
Pakistan Tehrik-i-Insaf Chairman Imran Khan and Secretary General 
Mairaj Mohammad Khan congratulated the government and the 140 
million people of Pakistan on the successful nuclear tests.
They said the people of Pakistan would resolutely resist any 
sanctions if imposed on the country. They expressed the confidence 
that nuclear weapons would prove an effective deterrent that would 
ensure peace in South Asia and serve as a guarantor of our 
Minister of State for Water and Power Haleem A. Siddiqui said the 
explosions were the in response to the nation's demand and the PML 
and prime minister Nawaz Sharif had translated the aspiration of 
the people into reality.
PML Sindh Vice President Senator Mian Ejaz Shafi said the tests 
were actually forced on Pakistan. Recalling that Pakistan discussed 
the matter time and again, he said, "we waited for two long weeks 
facing tremendous public pressure but the developed countries, 
particularly the United States, failed to give any tangible 
guarantees against the Indian aggression.
"Pakistan can't be blamed for detonating the device. Had Pakistan 
been given the necessary guarantees, the test would not have been 
carried out," he said.
ANP Sindh President Amin Khattak said after the explosion, the 
national cohesion was the need of the hour. "In the larger interest 
of the country and in view of the grave challenges of the future, 
the ANP will extend full support to the government," he said, 
adding that the government also ought to take the people into 
confidence about problems likely to arise in the wake of the tests.
Jamaat-i-Islami deputy chief Prof Ghafoor Ahmad greeting the prime 
minister, the scientists and the army, assured the government that 
the whole nation was behind it.
The NPP information secretary, Syed Zia Abbas, said that to check 
the expansionists designs of India against its neighbours and to 
disperse the war clouds, the nuclear tests were inevitable.
Pakistan Awami Tehreek Sindh President Qazi Zahid Hussain, General 
Secretary Dr D.A. Quaderi and others said Pakistan had been left 
with no choice but to respond to the Indian nuclear tests in the 
same manner.
They said it was the voice of the nation and hoped that by 
disregarding economic sanctions, the nuclear explosion had put the 
country on the road to self-reliance and prosperity.
"It has also got the honour of being the first nuclear power among 
the Muslim nations," they said.
Jamaat Ahl-i-Hadith Deputy Secretary General Dr Aamir Abdullah 
Mohammadi said the five tests carried out by the government had won 
the hearts of not only the Pakistanis but all the Muslims of the 
Tehrik Jafria Sindh President Allama Hasan Turabi said the 
government decision was a manifestation of the people's aspirations 
and the armed forces deserved salutation for the achievement. Syed 
Hasnain Abbas and Shifaat Hussain have also endorsed the views.
Shabab-i-Milli Karachi President Shahid Shaikh said the nuclear 
tests in Chaghai had demonstrated the sentiments and determination 
of the people against Indian designs and the typical Hindu 
He was speaking to the participants of a procession on motorcycles 
and other vehicles taken out spontaneously after hearing the news.
The Pasban took out a procession from Lea Market Chowk which after 
passing through Tower, Burns Road, Saddar and M.A. Jinnah Road 
reached the Quaid-i-Azam's mausoleum where participants of the 
rally reiterated their commitment for the solidarity and stability 
of the country.
Anjuman Naujawanan-i-Islam chief Tariq Mehboob speaking to a 
gathering of youths said Pakistan had dispensed with the 
responsibility of defending the survival of Muslim world.
The ANI Karachi Division has announced that it would stage a rally 
on Friday at Regal Chowk to celebrate the nuclear achievements.
Jamaat-i-Islami Karachi has also announced that it will take out a 
procession and offer special prayers on Friday at Lasbela chowk.
Urban Democratic Front Chairman Hussain Haqqani said that 
Pakistan's joining the small group of nations possessing advanced 
nuclear technology was a matter of great pride.
Pakistan-India Peoples Forum General Secretary Baseer Naved said 
the tests had neutralised the hatred against India. He called upon 
peaceful forces within the two countries to play their effective 
role to eliminate the war phobia.
Pakistan Muslim Rabita Council President Nusrat Mirza said the test 
would not strengthen the country's defence but would also help 
Pakistan in emerging as strong country in the community of nations.

PPP (Shaheed Bhutto) Chairperson Ghinwa Bhutto said it would have 
been better if Pakistan had not entered a nuclear race.

Inquiry ordered into Fokker hijacking
Bureau Report

ISLAMABAD, May 25: The ministry of defence on Monday ordered an 
inquiry into the hijacking of the PIA Fokker, and started 
interrogating the hijackers.
In Karachi an official of the Airport Security Force said his 
agency had begun investigating as to how the hijackers managed to 
get into the plane at Turbat. The official, Brig Manzoor Bangash, 
also said the ASF had ordered tightening up of security at all 
A Press note of the defence ministry said the hijackers, believed 
to be Pakistan nationals, wanted to take the plane to Jodhpur 
(India). Before they could contact any Indian control tower, the 
pilot succeeded in deceiving them that the plane had landed at Bhuj 
airfield, in India, on its way to Jodhpur.
The hijacking drama ended in the small hours of Monday when 
contingents of the army and civil agencies stormed the plane and 
overpowered the hijackers.
Giving details of the nine-hour drama, the Press note said a PIA 
Fokker on a Turbat-Gwadar-Karachi route was hijacked by three men 
at 6.30pm on Sunday. There were 25 passengers and crew members on 
The hijackers were carrying two TT pistols and claimed they were in 
possession of a bag of explosives.
The demands put forward by the hijackers included refuelling to 
take the plane to New Delhi and a meeting with Pakistan's high 
commissioner in India. They said they had hijacked the plane to 
protest "misappropriation of funds" provided by the government for 
the relief of flood victims in Turbat.
They also said that on the one hand, the government was making 
bombs while no funds were being provided for the uplift of backward 
areas in Balochistan.
Soon after receipt of the news, the corps commander of Karachi took 
charge of the situation and flew in a helicopter to Hyderabad. A 
crisis control headquarters was set up at the ministry of defence 
and an operation control centre at Hyderabad.
Anti-terrorist operational procedures were set in motion and an 
anti-terrorist company of the Special Services Group was rushed to 
Rawalpindi from Tarbela and later flown to Hyderabad by a C-130 
Meanwhile, PAF's air defence elements had also been scrambled to 
keep a watch on the plane and meet any be prepared for meeting any 
Troops from the Hyderabad garrison were moved to the airport and 
the aircraft was cordoned off as soon as it touched down at 
The corps commander, the Hyderabad GOC, Sindh Chief Secretary and 
the IGP remained at the airport throughout the operation.
Negotiations with the hijackers were initiated immediately for the 
provision of essential commodities, eg water and milk, through 
Major Aamir, the ASP and the DC of Hyderabad, who were 
impersonating as Indians to hoodwink them into believing that they 
were on Indian soil.
Blasphemy law: Christians want correct application 

ISLAMABAD, May 23: Dr S. M. Zaman, Chairman, Council of Islamic 
Ideology, has reiterated that there has not been any difference of 
opinion among the Ummah over the imposition of death penalty on a 
person committing blasphemy against the Holy Prophet (Peace be upon 
Dr. Zaman was talking to Mr. J. Salik former MNA and a well known 
leader of the Christian community, who called on him  here on 
Friday to discuss the prevalent situation over the blasphemy law.
Mr Salik said that they had no quarrel with Section 295 C of the 
PPC but there was a desperate need for serious thinking over the 
possibilities and causes of innocent people being falsely involved 
in such cases.
He made a plea for an emergent meeting of the Council of Islamic 
Ideology to make suitable recommendations for blocking any 
irregularity or injustice in the implementation of this law.
The chairman assured him that Islam was absolutely against any kind 
of coercion in matters of faith and does not tolerate any injustice 
in any field. The CII will not be slow in discharging its 
obligations in this behalf, Dr Zaman added.

PC being turned into empowered division
Ihtashamul Haque

ISLAMABAD, May 23: The Privatization Commission is being converted 
into a Privatization Division to extend it all the powers for 
accelerating the pace of privatization in the country.
Official sources told Dawn here on Saturday that Prime Minister 
Nawaz Sharif has accepted a proposal to convert the PC into a 
Privatization Division specially with a view to ensure the 
privatization of Habib Bank Limited (HBL), National Investment 
Trust (NIT), Investment Corporation of Pakistan (ICP) and the 
Industrial Development Bank of Pakistan (IDBP) before the end of 
the current financial year.
The Chairman of Privatization Commission, who currently enjoys the 
status of state minister, will be made the federal minister with 
full powers to decide the issues relating to disinvestment of 
public sector corporations on his own.
Sources said that the Privatization Division was being revived to 
remove various bottlenecks in the system. PPP government had 
converted the PC into a Privatization Division but later the 
caretakers had reversed the decision and restored the the 
Privatization Commission.
"But now this being turned into a division to allow free hand to 
Chairman Privatisation Commission Kh Muhammad Asif for accelerating 
the process", said an official. He added that the role of the 
finance ministry was being totally marginalised as has been 
demanded by Kh Asif.
With the formation of the Privatization Division, officials said, 
the role of the Cabinet Committee on Privatization (CCOP) was also 
likely to be greatly minimized.
Sources said that a special meeting has been called in the PC on 
May 25 to consider a number of issues to accelerate the process of 
the privatization and finalize new deals for disinvestment.
The PC has expressed its inability to foster the pace of 
privatization in the absence of a Privatization Division. It also 
said that due to its involvement in the long-drawn litigation 
process, and the absence of regulatory framework needed for most of 
the State-Owned Enterprises (SOEs), it was facing difficulties to 
achieve the objectives of off-loading shares of the majority of the 
public sector corporations.
It has also been demanding for rationalization of tariffs of 
various Corporations for their disinvestment.  The officials of the 
PC continued to say that there were 99 cases pending in courts, 
opposing the privatization of various public sector entities. 
They said that they needed quick disposal of the cases by the 
courts with a view to accelerating the process of privatization.
PC was of the view that except for couple of organizations, 
regulatory framework of many SOEs has not been provided with the 
result there was hardly any progress to achieve the desired 
Sources said that despite reduction of time period for submitting 
pre-qualification documents and Expression of Interest (EOI), there 
was hardly any progress to disinvest even couple of Nationalized 
Commercial Banks (NCBs) and Development Financial Institutions 
(DFIs) by June this year.

CBR completes 1st round of budgetary proposals on taxes
Ikram Hoti

ISLAMABAD, May 26: The Central Board of Revenue has completed the 
first pre-budget round of presenting tariffs/revenue proposals 
under reduced rates applicable during the financial year 1998-99.
Under the commitment made by Islamabad to the World Trade 
Organization for further (phased) reduction in tariff rates by year 
1999-2000, the government is bound to incorporate steps in the 
1998-99 federal budget ensuring a "solid movement in that 
direction", said an official of the CBR.
Dawn learned from officials that number of items covering the 45 
per cent highest rate of duty would be further decreased under the 
Finance Bill 1998.
They said more than 50 items would be taken out of the list 
presently covered by the highest duty rate, and this would be a 
step toward removing the tariff barriers facing the imports to 
An overall duty loss of about Rs25 billion has already been 
estimated by the CBR on items that have already been taken out of 
the list of highest tariff rate in the Finance Bill 1997. This 
"loss" of duty has been compensated by the donors under the Tariff 
Reforms Fund, and the ministry of finance expects more funds to be 
received by Pakistan in lieu of the money lost in duty under these 
An estimate of the total loss of removing another set of items from 
the highest duty rate during the financial year 1998-99 has already 
been presented by the CBR to the ministry of finance. The ministry 
is to complete its side of job on the issue with the current week. 
"We would be able to set an estimate of collectible duty during the 
next financial year only after the ministry tells us whether these 
estimates are viable", said an official working on the tax revenue 
side of the federal budget.
He further explained that two different proposals have so far been 
offered to the ministry, one putting the customs duty estimates for 
1998-99 at Rs80 billion, the other at Rs65 billion. "I expect of 
the ministry to allow the first (Rs80 billion), in view of the 
revised target for the current financial year", he said.
The revised (downward) target for customs duty collection during 
the entire financial year 1997-98 is Rs81 billion, but the CBR 
expects collection of only Rs72-75 billion under this head, by the 
end of June 1998. The CBR has estimated that had the rate of tariff 
not been reduced on scores of items covered under the highest rate 
in 1996-97, the amount of duty collectible in 1997-98 would have 
been at least Rs100 billion. They say that if another Rs10-15 
billion is lost on reducing the number of items presently covered 
by this rate, the total amount collectible in duty during 1998-99 
would not be more than Rs70 billion, that too given an escalation 
in import of machinery and raw materials during the next financial 
The slump in the local market caused at least 20 per cent reduction 
in the import of machinery and raw materials during 1997-98, as 
compared with 1996-97, which was a major cause of reduced 
collection of import duty during the current fiscal. "We need at 
least a 20 per cent escalation in the imports of dutiable items, to 
make up for the loss to be incurred from further reduction of the 
items presently on the list of highest rate of tariff, during the 
financial year 1998-99, said a senior official.

Plan to net tax evaders, loan defaulters
Ihtashamul Haque
ISLAMABAD, May 29: Minister for Finance, Senator Sartaj Aziz has 
said that the scope of the emergency is being further enlarged to 
get hold of the tax evaders and the defaulters of Rs150 billion 
outstanding loans.
Speaking at a news conference here on Friday he said the government 
has decided to make best use of the emergency that will help 
collect huge funds from the tax evaders and defaulters of loans.
"We have not imposed the financial emergency and decided to impose 
general emergency that will help the government to recover taxes 
from the tax evaders and those defaulters of billions of rupees", 
he added.
The finance minister also announced an incentive for voluntary 
conversion of dollar account into rupee account. "To provide an 
incentive for voluntary conversion, the conversion will be allowed 
at the rate of Rs46 to a dollar", he said adding that the 
prevailing official currency rate was Rs44 which will surely be a 
great incentive for the dollar account holders.
Aziz also assured that there will be no restriction on any 
withdrawal from the rupee account but, "we expect that the 
depositors will contribute to the national efforts by investing 
their rupee deposits in tax-free defence savings and other 
He also said that there will be no restriction on bringing in or 
taking foreign exchange, by travellers and foreign exchange 
accounts not converted into rupee, will be able to resume their 
work on Saturday.
"I also want to tell you that there will be no restriction on 
opening of LCs for imports or remittance of profits on accounts of 
dividends or royalties. State Bank will also allow foreign exchange 
for essential travel and education expenses", he said.
He appealed to the people to covert their dollar account into local 
currency and place them in local accounts or various saving 
schemes. He expressed hopes that the depositors will also show 
confidence in the country's currency and not engage in any scramble 
to buy dollar in the black market and thus push up its price.
"Let us show to the world that we are committed to make the 
Pakistan rupee a strong and stable currency", he said adding that 
he was confident that all Pakistanis who have foreign currency 
abroad will bring back it through the normal banking system and not 
through the Hundi system to build up the reserves of the country. 
He was hopeful that the people will respond full to the prime 
minister's appeal to observe austerity and discourage smuggling and 
use Pakistani goods.
He said that the prime minister will soon announce a National 
Agenda to be launched soon to increase exports, enhance more 
revenues, and expand agricultural production which were the 
suitable measures to build the economy and achieve self-reliance.
Asked what was the likely impact of the restrictions to be slapped 
on Pakistan for having tested five nuclear test, the finance 
minister said that so far it was difficult to say about it in the 
absence of its full scope and exact nature of the sanctions.
SBP gathers details to mount watch
Mohiuddin Aazim
KARACHI, May 29: The State Bank of Pakistan (SBP) on Friday 
gathered hurriedly the details of foreign currency accounts 
maintained with the commercial banks.
Senior bankers told Dawn the SBP had sought the information to 
mount a closer watch on foreign exchange transactions to avert a 
flight of capital after Pakistan's five nuclear tests on May 28.
"Banks worked till late in the evening to provide the details to 
SBP teams," said senior executive of a bank. He said the SBP had 
sought the information on a three-page format covering key aspects 
of foreign currency accounts and foreign exchange transactions. 
"Banks provided some information on Friday and the rest would be 
furnished on Saturday."
The banker said the format required the banks to disclose the total 
number of foreign currency accounts with the break-up of the US 
Dollar, Pound Sterling, Deutsche Mark and Japanese Yen. He said the 
banks were also asked to give the break-up of resident and non-
resident FCY accounts. The format required the banks to give the 
break-up of the non-resident accounts in terms of the accounts of 
banks and financial institutions and the accounts not belonging to 
banks and financial institutions. "This information would help the 
central bank assess how much of foreign currency accounts were less 
visible and more vulnerable to market shocks."
The SBP also asked the banks to provide the names and addresses of 
every foreign currency account holder maintaining an account with 
their branches. The central bank also sought their account numbers 
along with the closing credit balance as of 28th May 1998. 
Immediately after conducting five nuclear tests on May 28 the 
government had stopped operation of foreign currency accounts and 
the information about the closing credit balance of FCY accounts as 
of that date is to check the violation of this order -if any. The 
information would also help the SBP devise some strategy to meet 
any eventuality in the foreign exchange regime.

Habib Bank to be privatized by June 30
Bureau Report 

ISLAMABAD, May 25: The cabinet committee on privatization (CCOP) 
decided on Monday to disinvest 26 per cent of the shares of the 
Habib Bank (HBL) and also agreed to transfer its management to a 
new buyer.
The CCOP meeting, presided over by Finance Minister Sartaj Aziz, 
approved a proposal to invite Expression of Interest (EOI) from 
potential buyers for a minimum of 26 per cent shares in HBL with 
the transfer of management.
The meeting was told that the Privatization Commission (PC) had 
completed and submitted a preliminary report for privatizing the 
Habib Bank. Sources said PC chief Khwaja Asif had assured the CCOP 
that the HBL would be disinvested and its management transferred to 
a new buyer before June 30 provided no bureaucratic hurdles arose.
Sources said the CCOP also discussed ways and means to further off-
load the remaining 64 per cent charges of the Kot Addu Power 
Company (KAPCO). However, there was a consensus that market 
sentiments must be evaluated before disinvesting KAPCO shares.
He told Dawn the CCOP believed that the government could get a good 
price for the remaining shares of KAPCO, provided some good 
spadework was done and reputed local and foreign firms were 
attracted. The British Power Company had earlier been given 36 per 
cent shares along with the transfer of management.

WTO considering new proposal on dumping duties
Ihtashamul Haque

ISLAMABAD, May 26: The World Trade Organisation (WTO) is 
considering a proposal not to entertain any complaint for anti- 
dumping duties at least for two years once the allegation is not 
proved against any developing country for being involved in it.
"The WTO has, in principle, agreed that no anti-dumping duties 
should be imposed against any country at least for two years once 
the matter is investigated and it is determined that it has not 
violated any rule", said the Minister for Commerce and Investment 
Ishaq Dar.
"We tried to convince them that it is not fair to entertain 
complaints of anti-dumping duties every now and then".
Speaking at a news conference after attending a 3-day WTO's 
Ministerial Conference during May 18 to 20 at Geneva, he expressed 
the hopes here on Tuesday that the developed countries would stop 
politicizing the issue of anti-dumping duties against the 
developing countries.
He said he had also pleaded in the conference that the benefits of 
the WTO should go to the developing countries. "Currently it is one 
way as WTO rules greatly benefit the developed world", he added.
The minister for commerce pointed out that the WTO capacity should 
not be overloaded and must be trade related. Why should the issues 
like labour standards, child labour, environment and social 
accounting standards should dominate the charter of the WTO, he 
asked. "There should not be further distortions in the original 
charter of the world body".
Dar said that he had opposed a proposal forwarded by the United 
States that there should not be any custom duties on the equipment 
relate to internet. "Pakistan had succeeded in the Ministerial 
Conference to ask the Americans to get a technical and economic 
study conducted about the implications of not imposing duties on 
the internet related equipment", Dar added.
"I told the conference that we must reiterate the primacy of the 
multilateral trading system and ensure that regional trading 
arrangements do not distort trade flows and do not exclude or 
discriminate against the development countries", the minister for 
commerce pointed out.
"Increased trade and investment have by-passed the majority of the 
developing countries. The gains from trade liberalization have been 
disappointingly asymmetrical. Areas of special interest to 
developing countries - textile, agriculture, the movement of 
natural persons - are being liberalized at a slower pace than other 
areas. The move towards free market in the past few years has been 
accompanied by a slowdown in global economic growth. Wealth has 
become more concentrated, among and within countries", he said.
He said Pakistan also pleaded for accelerating the process of 
accession to the WTO by a large number of developing countries 
including China, Saudi Arabia and Oman which should not be 
subjected to more excessive demands than the existing commitments 
of WTO members. "In the absence of such major countries, the 
Multilateral Trading System cannot be called global or 
comprehensive", he believed.

NEC to review economic conditions
Muhammad Ilyas

ISLAMABAD, May 25: National Economic Council (NEC), the highest 
policy making body on economy and development, will meet here on 
May 30 under the chairmanship of Prime Minister Mohammad Nawaz 
Sharif, according to an official source.
It will be attended, besides deputy chairman, Planning Commission; 
federal minister for finance & economy; other relevant members of 
the Federal Cabinet; the chief ministers and the finance ministers 
of the four provinces.
The meeting will review the economic situation prevailing in the 
country, particularly in the context of the current uncertainty 
that prevails on the economic front following the recent nuclear 
tests by India and their likely impact on the economic future of 
The implications of economic sanctions that may be imposed by the 
creditor countries of Pakistan and international 
finance/development agencies in the event of Pakistan also staging 
its own nuclear test might also figure in the discussions, 
according to a knowledgeable source.
Basically, the NEC meets at this time of the year to accord its 
approval to the broad features of annual budgets. The 1998-99 
budget is likely to be announced on June 14 by the Finance Minister 
Sartaj Aziz. The NEC will also consider the Public Sector 
Development Programme (PSDP) for the next financial year in the 
light of its dismal performance in the current financial year.
The NEC, it is expected, would also consider broad parameters of 
the 9th Five Year Plan. Particularly, to be discussed would be the 
size of the Annual Plan and the projections for the behaviour of 
the GDP in view of the final formulations about the growth rate of 
the national economy. The figure bandied by different government 
spokesman is 5% to 5.5%.
Once it is clear what the GDP growth rate has been during the 
current financial year, it would be taken as the benchmark for 
projecting the GDP growth rate during the 9th Plan period, a source 
told Dawn. The aim is to avoid the anomaly created at the time of 
launching of the five-year plans in the past.
What happened then was that the GDP growth for the first year was 
tailored to the presumptions and macroeconomic objectives of the 
overall plan which was, however, substantially out of balance with 
the performance of the economy during the last year of the previous 
five year plan period.  This is especially so because except the 
first two five year plans, all the plans have fallen short of their 
targets by as much as 70 to 85 per cent in terms of macroeconomic 
targets, social sector development programmes etc, the source 

Sharp fall in credit flow to manufacturing sector
Mohiuddin Aazim

KARACHI, May 23: During the first nine months of the current fiscal 
year credit disbursement to manufacturing sector fell by Rs 11.493 
billion to Rs 27.372 billion from Rs 38.865 billion a year ago.
The State Bank report on the state of the economy released on 
Thursday reveals that credit supply to manufacturing sector proper 
declined to Rs 28.105 billion during July-March 97/98 from Rs 
38.324 billion in July-March 96/97.
The report shows that credit disbursement for locally manufactured 
machinery (LMM) recorded a negative growth of Rs 733 million during 
this period against an expansion of Rs 541 million in 1996-97. 
Hence a total fall of Rs 11.493 billion in credit distribution to 
manufacturing sector as such including loans for LMM and small 
The report reveals that the entire credit disbursement to 
manufacturing sector was in the form of working capital totalling 
Rs 28.629 billion and not a single paisa went for fixed investment.
In fact a negative growth of Rs 587 million in fixed investment 
brought down the Rs 28.629 billion credit disbursement to the 
private sector to Rs 28.105 billion.
During the first nine months of the last fiscal year the flow of 
credit in fixed investment of the manufacturing sector stood at Rs 
7.960 billion.
"The figures indicate the extent of recession in manufacturing 
sector during the first nine months of the current fiscal year," 
said senior executive of a local bank.
The State Bank projection that the economy would grow by 5.00-5.5 
per cent during 1997-98 is largely based on healthy developments in 
agriculture sector. The report does not hide the fact that large 
scale manufacturing sector would miss the growth target of 6.5 per 
cent. The report says this sector may record a growth rate of 4.4 
per cent at most.
If credit disbursement may serve as an indicator to the growth of a 
particular sector - then there has been a tremendous growth in 
agricultural sector during July-March 97/98. The report reveals 
that credit disbursement to agricultural sector totalled Rs 23.332 
billion during the first nine months of the current fiscal year - 
almost double the amount disbursed during the same period last year 
i.e. Rs 12.388 billion.
The break-up of the figure shows that the agricultural sector 
received production loans worth Rs 17.375 billion and development 
loans worth Rs 5.957 billion - a significant increase over the 
1996-97 figures of Rs 9.262 billion and Rs 3.126 billion.
KSE reverses decision on T+3 system
Staff Reporter
KARACHI, May 25: The Karachi Stock Exchange (KSE) on Monday 
reversed its decision on introduction of T+3 system.
But financial analysts were surprised over the deferring of T+3 
system as in their opinion any step short of spot clearing will not 
work in the prevailing situation, what they called "highly alarming 
one", and could lead the KSE 100-share index below its base of 
1,000 points even during the current week.
The members' exposure limits have been reduced from the previous 
Rs30 million from 40 million and limit of losses has been cut to 
Rs2 million from 3 million with effect from the afternoon of May 
The index has lost another 6 per cent over 100 points since the KSE 
resorted to T+3 system late last week.
"The market has some other reasons behind the massive sell-off than 
the technical one, alone", said few adding "after having lost about 
300 points or more than 20 per cent during the last two weeks and 
Rs100 billion from the market capitalization, it might have some 
genuine reasons behind its current impending collapse".
APP adds: Meanwhile, KSE is also seeking an appointment with Prime 
Minister Nawaz Sharif.
It deferred its decision to place some companies on T+3 counter and 
transferred three companies Hub Power, PTCL, and ICI Pak for 100% 
trading on Karachi Automated Trading System (KATS) with effect from 
afternoon session of May 26.
These three scrips were being traded on the open outcry system.
Analysts said that all these measures announced by KSE Board on 
Monday were aimed to prevent further losses in stocks and avoid a 
crash of the Index.
Back to the top
Storming of the Supreme Court - 6
Ardeshir Cowasjee

AND so, it ended - six months after the Storming of the Supreme 
Court by the members of the ruling party who successfully 
obstructed the course of justice, prima facie committing contempt 
in the face of the court. The Inquiry Tribunal has held ten 
sessions over the course of the last two months.
Parliamentarians, members, activists and supporters of the ruling 
party have been examined under oath and have, more or less, given 
similar statements. They have sworn that on that 28th day of 
November they arrived at the Supreme Court merely to be present to 
cheer on their Great Leader who was to be present at the contempt 
of court hearing. And this, despite the fact that the public had 
been informed by the press that the leader had been exempted by the 
court from personal appearance. The lesser orders, the "pawns" as 
they have been dubbed, arrived with cloth banners (one measuring 
50' x 4' reading 'Enemy of the solidarity of Pakistan, Sajjad Ali 
Shah - Pakistan Muslim League), printed pamphlets, placards, and 
rehearsed slogans such as 'Sajjad Ali Shah, kutta, hai, hai, - 
Leghari kutta, hai. hai'.'
The main players, the upper crust who testified, all swore that 
they were there to disperse a mob that had spontaneously formed and 
was spontaneously charged (in Lahore?) by the current events, thus 
implicitly admitting that there was in fact a violent mob organized 
to disrupt the Chief Justice's Court. Their protestations of 
innocence were such that even Deputy Attorney-General Mian Tariq 
Mahmud (now wearing a halo in the Lahore High Court) was prompted 
to admit to the Bench that summoning any further ML 
parliamentarians or supporters was a waste of time as they would 
all swear to the identical story.
He should know. For the Leaguers who were summoned to testify 
verbally came to court via the Attorney-General's office, where 
they were tutored as to the statements they were to give. When, 
later in the hearings, the Bench ordered that written statements be 
prepared by those summoned, in the case of the four ANP leaders 
these were also said to have been drafted and typed in the 
Attorney-General's office. With the usual government inefficiency 
and sloppiness, the men of the AG's office inserted the phrase 
"just before tea break" quite forgetting that on Fridays there are 
no tea breaks. The newly hired super- consultant to the AG, Raja 
Muqsit Nawaz Khan, was obviously caught napping.
Senator ANP President Ajmal Khattak and ANP's Asfandyar Wali 
produced identical statements, as did ANP's Arbab Jehangir and 
Ghulam Mohammed Bilour with the necessary name changes as they 
declared they came together.
In the case of the former two: "My Lord the Chief Justice, your 
court has been raided . . . . . ". Each had heard the man who had 
'rushed' into the courtroom to warn the judges whereafter the 
judges rose and the "........ people started going out of the 
courtroom where the doors were closed from the outside and we were 
told that hundreds of Muslim League workers had entered the main 
gate of the court . . . ., " but "....I had not seen anything 
happening . . . . . we came down and learnt about the unfortunate 
incident." When questioned by the court, Asfandyar Wali stated that 
he saw no one outside the courtroom but he did see overturned 
damaged chairs and flowerpots. Now, who could have done the damage?
The latter two ended their statements declaring they were both 
outside the compound, standing together on the left of the gate. 
"And then we heard cries and shouting and learnt that a mob had 
broken the main entry gate and they were heading towards the main 
building. Since I and . . . . both are physically weak, we 
therefore got to a side so as we were neither hit nor crushed." By 
what were they to be hit or crushed? By cries, by shouts? They saw 
nothing. However, when asked by the bench whether the crowd 
resembled a group exiting from a mosque after Friday prayers, 
Bilour admitted that that was exactly how it was.
The last man to be examined, on May 21, was Senator Iqbal Haider 
(Groovy to his friends). His statement ran into seven handwritten 
He opened up: "The attacks on the SC started on August 21, 1997, 
when the strength of the SC judges was arbitrarily reduced. The 
spate of attacks on the SC continued thereafter with the intent to 
disrupt the course of justice and prevent the court from hearing 
the most crucial cases, incriminating the prime minister and his 
parliamentarians and friends, e.g. cases relating to the wheat 
freight contracts, recovery and rescheduling of loans under 
pressure, allotment of plots, distribution of over Rs.140 million 
of public money to the candidates of the ruling party and their 
allies, Riba, the Anti-Terrorism Act, the 13th and 14th Amendments, 
contempt of court, etc, etc.".
Senator Haider went to state that the attacks were twofold. 
"Firstly, efforts were made to influence, pacify and win over the 
judges of the SC, as has been revealed by former President Farooq 
Leghari in his press conference of December 2 and subsequent press 
interviews. Secondly, to physically intimidate and to harass the 
judges. This started in the court of the CJP on November 27 when 
the contempt cases against the prime minister and his 
parliamentarians were being heard."
Groovy related how his car was mobbed and battered, how he had to 
save himself, drive away and park, and return to the SC on foot, 
how later when the judges had retired, Mushtaq Tahirkheli had 
accosted him outside court No.1, exhorted the mob to beat him up, 
and accused him (of the PPP) of having instigated the whole 
scenario, how he had to be rescued and ultimately escorted safely 
out of the court premises by the PM's counsel, S M Zafar.
Groovy's most telling and most pertinent remark is that the mob 
attack on the court on November 28 must not be seen in isolation. 
It is the background to it that is of vital importance.
Now to Farooq Ahmad Khan Leghari: It was suggested that he, being 
privy to the background, be called to give his statement. In his 
press conference of December 2, at which he announced his 
resignation, he dwelt in detail on the events leading up to the 
attack. The video cassette is on record with the Supreme Court. The 
Bench held otherwise. No, he cannot be called; he must volunteer. 
In the same breath, the judges observed that times had changed, 
that Benazir and Nawaz Sharif had appeared before the honourable 
court in other cases. Their attention was drawn to the fact that 
indeed they had appeared, but both had been summoned.
Sajjad Ali Shah (the intended victim of the mob attack who, after 
conferring with his brother judges on that mortifying day, decided 
to rise and retire so as to save them and the court further 
humiliation and contempt): It was never suggested that the former 
Chief Justice be summoned to give his statement to the court, to be 
subject to being questioned by the very judges who, with seven of 
their bretheren, had decided that, after holding his high office 
for almost four years, he had held it unlawfully and removed him.
In my statement of May 16, sent to the court, to which was attached 
Sajjad Ali Shah's press statement of May 14 and his letter of 
November 28 written by him as Chief Justice to the then President 
describing the mob storming, I simply requested that this be put on 
court record, adding: "Should the court or the Attorney-General 
challenge the veracity of [former] Chief Justice Sajjad Ali Shah's 
statement or letter, appropriate action is available to them."
Nevertheless, the people have managed to place more than sufficient 
evidence on court record to establish the truth. Press reports, 
columns and articles of November 28 and 29 are on record. 
Five reputable journalists who were in court on November 28 have 
come forward voluntarily to record their statements: Altaf Bhatti 
of Asas, Aslam Butt of the Frontier Post, Zahid Hussain of 
Newsline, The Times, and AP, Wadood Qureshi of Din, Mahmud Ahmad of 
the Business Recorder, and Naveed Meraj of the Frontier Post. They 
were witness to the assault on journalist Fakhr Zaman who warned 
the judges that a mob had invaded the building. Zaman was beaten, 
kicked and abused by PML men, infuriated that their plan had been 
Those likely to be examined this coming week are members of the 
police force, the Islamabad administration (according to former DAG 
Tariq Mahmud the 'entire' administration was present that day), and 
employees of the Supreme Court. Their evidence, procured as it will 
be, can be of no importance.

Now the real test
Kunwar Idris
In conducting the nuclear test, the prime minister said he was 
inspired by the people. Instantly, however, on his advice the 
president negated the sentiment by promulgating an ordinance 
denying the people their right to speak and to be free. Clearly the 
government does not expect people's support in the making of 
history, that is how the prime minister described the nuclear test 
in his broadcast. Inevitably a thought arises: can history ever be 
made with the free and full participation of the people. History, 
old and recent, especially Pakistan's itself, would deny that.
Slipping into the Indian syndrome which has become a part of our 
life, couldn't the prime minister, like India, have called a 
session of parliament to get the state of emergency voted, if at 
all it was considered necessary, to control any mischief after the 
test. Incidentally, debate in the Indian parliament is not centred 
on the curbs on freedom of the press and the people. The opposition 
is questioning the motive and wisdom of the BJP's rickety coalition 
in conducting the test and the government is defending it.
In the first post-test moral contest between the two countries in 
trusting their own people, India has emerged the winner. Pakistan's 
leadership may still follow India here as well and immediately call 
a session of parliament to discuss the state of emergency and other 
measures the prime minister says will follow. Even if the executive 
decree is endorsed, which almost certainly will be, the opposite 
viewpoint will also reach our own people and, more importantly, the 
world at large.
The brunt of an emergency is borne by the poor and lower middle 
class so they have on the very first day of the emergency clamped 
after an overwhelming support from this very segment of the 
society. All foreign currency accounts have been frozen. The rich 
keep their dollars abroad. Those who kept them here have borrowed 
rupees against the pledge of their dollars at fancy rates of 
interest. Thus it would be only the poor and families of workers 
who toil abroad in brutish existence whose small dollar deposits 
would go to strengthen the government's reserve for imports and 
debt repayment.
By freezing the small foreign currency accounts (which it seems 
will be followed by conversion into rupees), the government has 
punished the poor and the patriot and placed a premium on dollar 
holdings abroad. For the future, a clear signal has gone out to 
horde even your legitimate money abroad, not in the country.
The estimates of money held abroad by Pakistanis range from 40 
billion to 100 billion dollars. The deposit figure generally 
mentioned for the country is 10 billion. Of that perhaps only a 
billion is not pledged against rupee loan. The free billion belongs 
to a million poor.
The prime minister has talked of tightening the belt. In our 
culture, the rich don't pay taxes and the poor cannot. The belt 
would become a noose around the poor's neck. Before skepticism 
takes hold the ruling class, the elite - feudal or industrial - 
should voluntarily pay the taxes they have not for all these years. 
The payments off and on attributed to the rich - Sharif and Z.A. 
Bhutto's families included - seem to represent a ridiculous 
fraction of what they should have been paying. Now their wealth and 
recurring income is public knowledge if ever there was any doubt 
about it. They should pay all the arrears.
On the payment of taxes by those who can pay lies the only hope of 
countering, to an extent, the effect of economic sanctions and 
enhanced expenditure on the creation of a credible nuclear arsenal. 
If the prices of the commodities and utilities go up through 
indirect taxation, the poor and the lower middle class will take to 
the streets notwithstanding the claims regarding the renaissance of 
Pakistani nationhood or the glory of Islam.
Retired General Aslam Beg says no one would die of hunger for we 
are an agricultural country. Last year we imported four million 
tons of wheat. The harvest this year being somewhat better, the 
import may be two million tons but no less. For that the country 
would pay more dollars than it did previously because of the 
sanctions. Aslam Beg having failed as a politician should not 
inflict his economics on the people. The people may not die but 
because of scarcity and high prices, many more would join the 40 
per cent of the population who live malnourished, without even 
clean drinking water and basic health care. The bravado of the pre-
test days should give way to realism even among the hawks like 
Messrs Hamid Gul, Majeed Nizami and Altaf Gauhar and a horde of 
them inspired by no less than the president of Pakistan.
Whatever the real gain to national security and pride, the 
leadership now must consolidate and sustain the sentiment of the 
majority through the hard days ahead. For that rhetoric would not 
work, examples have to be set. The prime minister has set the pace 
by promising to vacate his multi-billion gilded monster of a 
secretariat. The hope is that he would on Monday, after his 
mandatory weekly excursion to Lahore, sit in his sprawling house on 
the hill. It is large enough for the staff he really needs. The 
rest should be sent home.
The president should follow the prime minister's example by moving 
into a four-bedroom house, which by his own admission is all that 
he needs and craves for. Security should not stand in the way. He 
has already declared: "Who would kill me." For once he is right in 
his modesty. The sprawling parliamentarian lodges should be 
converted into a hotel. Where in the world are members of 
parliament provided state-built and furnished houses? It will also 
help in bringing down the astronomical tariffs of the only 
worthwhile (not five star) hotel in the capital.
More gestures similar and greater money saving need to be made, for 
neither the tax revenue would go up nor the bureaucrats would shed 
their perks or numbers. For a thousand dismissed for economy, a 
score will continue to be recruited to equal the pay bill of the 
unfortunate thousand.
The friends and opponents here and abroad will have their own 
assessments and interests. Coaxing the government to conduct the 
test, Benazir Bhutto now says security threat to Pakistan has 
increased and it stands alone in the world. 
Those relying on Islamic support should not be surprised by the 
condemnation of the test by the Arab League, regrets expressed by 
China and a sigh of relief in India that Pakistan would also suffer 
the rigours of economic sanctions and increased military 
expenditure alongside.
In conducting the test besides the world opinion, Pakistan has 
defied the advice of three air force chiefs Asghar Khan, Noor Khan 
and Zafar Chaudhry. They planned the defence and conducted three 
wars in the first quarter of Pakistan's united existence. Their 
professional skill and integrity was never called into question 
then or now. Advice of Eqbal Ahmad, perhaps the best military 
historian and political scientist in the country, repeatedly and 
forcefully tendered has also been ignored. There were many lesser 
The political leadership now shoulders a heavy responsibility to 
prove them all and Bill Clinton wrong when he said that by testing 
the nuclear device, Pakistan has missed a priceless opportunity to 
strengthen its security and to improve its standing in the world.
The prime minister is right when he said it is Pakistan's moment of 
glory. It can change into its moment of ignominy if our own poor 
suffer more without diminishing the suffering of the people of 
Kashmir. Another threat to Pakistan looms under the American 
"Freedom from Religious Persecution Act" already sailing through 
the congress after the death of Bishop Joseph. The nuclear test 
will give the bill further impetus. In that, Pakistan is a 
candidate for economic sanctions second only to Sudan.

The high cost of post-blast sanctions for Pakistan
Sultan Ahmed

THE usually pragmatic Finance Minister, Sartaj Aziz was more 
rhetorical than realistic when he said Pakistan could survive any 
kind of post-nuclear explosion sanctions by the West, and in fact 
it had withstood such sanctions in the past.
The fact is that when sanctions were imposed in 1990 that was done 
largely by the US, not by much of the rest of the world, and that 
resulted in Japan emerging as the largest donor of Pakistan with 
$500 million a year on an average on really concessional terms. 
Other Western countries, including Germany, did prevent import by 
Pakistan of items which they suspected could be used for 
manufacture of nuclear weapons and they included items used by the 
textile industry as well.
It its effort to check our nuclear weapons capacity, the US did not 
stop its surrogate, the World Bank, the IMF, or the Asian 
Development Bank from extending their normal or even stepped-up 
economic assistance to Pakistan. But if Pakistan comes up with an 
explosion these financial institutions would be barred from 
extending loans to it, as has been done in respect of India. And 
Japan has already suspended its assistance to India, where too it 
is the largest donor country, and the same course would follow any 
nuclear explosion by Pakistan to be on a level with India in its 
destructive power.
The fact is there is a vast difference between Pakistan exposing 
itself to sanctions with just a $1.2 billion foreign exchange 
reserves, and India risking the anger of the West with a foreign 
exchange reserve of $26.3 billion and the hope that overseas 
Indians would send far more funds following the sudden swell in 
their national pride.
In fact there is not even the certainty there would not be a run on 
the $10 billion deposits by resident and overseas Pakistanis in our 
banks if they fear Pakistan would face a serious foreign exchange 
crunch following the new rigid sanctions, clubbing India and 
Pakistan together. If a run starts Pakistan will be real trouble. 
The small men with little deposits may not be in a hurry to 
withdraw them as they may want to help the nation, but the big fish 
with large deposits have no such restraints as they are on a money 
maximising game.
If the people feel the nation faces a real emergency and they have 
to make sacrifices to overcome the deep crisis, there should have 
been a fall in big-time crimes in the country, including massive 
snatching of cars. But the number of cars snatched in the city 
continues to rise from the earlier 10 and later 20 per day, to 35-
a-day now.
And when it comes to the rupee which resisted a fall against the 
US. dollar, it has now begun to slip and it lost 15 paisa on 
Wednesday to close at Rs 45.68 to a dollar, while the Indian rupee 
is static at 40.55 to a dollar, and is expected to stay that way 
despite the sanctions imposed by the US, Japan, Canada etc. In 
fact, the six-monthly premium on the dollar was reduced from 8.31 
per cent to 7.88 per cent on Tuesday.
The Bombay Stock Exchange Index, which was rattled by the explosion 
and fear of the economic consequences of sanctions, stands above 
4,000 points while the Karachi Stock Exchange Index sank to 
shattering 1,294.60 points on Wednesday - almost the same 
demoralising bottom to which it reached in 1994. Recovery from that 
has been marginal and too erratic. What we are seeing in not a 
tough market standing up to the challenges of exploding a bomb but 
an exchange which wants to sell as quick as possible and cut its 
losses hastily.
The $1.6 billion Enhanced Structural Adjustment Facility (ESAF) 
spread over three years is also petering out within its first year, 
like its ill-fated predecessors and the stand-by arrangement with 
IMF. The first tranche of the IMF loan was $208 million, the second 
one was reduced to $180 million, and the third, it appears, would 
be between $30 and 35 million. The IMF assistance is drying up not 
because we have not carried out an explosion but because of the 
critical fiscal failures marked by a large fall in revenues and 
rise in the budget deficit above the 5 per cent committed for the 
current year.
Mr. Sartaj Aziz said following the meeting of the Pakistan 
Development Forum in Islamabad that Pakistan would receive external 
funds of $5.8 billion this year and the next. Much of that is 
likely to vanish if it undertakes an explosion.
The fact is that even without sanctions following an explosion, 
Pakistan is threatened with sanctions by the US and some of the 
Western countries on one account or another, including religious 
intolerance, particularly against the Christians more recently, use 
of child labour, bonded labour and not doing enough to fight 
narcotics, particularly their clandestine export.
Pakistan is already frustrated by its sustained failure to increase 
its exports by 15 per cent. An increase in five per cent exports 
during the last nine months is a poor performance, following our 
sustained failure in this area over a long period. It is true that 
imports have fallen by 17 per cent. The reasons, apart from the 
fall in world prices by 40 per cent, is poor imports by the 
exporting industries and the downturn in the economy. And fall in 
imports means a large fall in revenues at the import and later 
stages which hurt the government grievously and disappoints the 
IMF. So the finance minister cannot hold the fall in imports as 
blessing. If it helps him one way, it hurts him another way. What 
would happen to Pakistan when our grandiose foreign direct 
investment expections are thwarted by the sanctions? We have been 
talking of direct foreign investment of $5 billion in two years and 
$10 billion in five years. How much of that would come after we 
explode the bomb and invite the sanctions? And how much would the 
overseas Pakistanis, who want us to explode the bomb forthwith, 
invest in Pakistan out of the $60 billion to 100 billion allegedly 
kept abroad?
Meanwhile, the government is having a serious problem with the 
Independent Power Producers who are threatening to take the issue 
to the international court if the government breaches the agreement 
reached with them and lowers their prices unilaterally. The US has 
a direct interest in 16 of these companies while Japan has 
investment in 12 of the total 22 companies.
There is also the issue of food aid. Luckily for us wheat imports 
have been reduced from the earlier scheduled 4 million tons to 2 
million tons and much of that is to come from the US under the PL-
480 programme. Will this programme continue when the sanctions are 
And in the area of trade with the West, what matters is not only 
our ability to export as much as we can but also the import high 
tech items for our industrial expansion. How much will that be hurt 
by the sanctions.
Above all, what would happen to our ambitious privatization 
programme which is now regarded as the final remedy to reduce our 
fearsome total debt of Rs 2,240 billion and shrink the large budget 
deficit? If many of the Western companies are not allowed to bid 
for the major units to be sold, including banks, oil and gas 
companies and power projects, privatization will not take off.
The difference between now and 1990 is now President Clinton, Prime 
Minister Tony Blair of Britain and the Japanese Prime Minister 
Hashimoto have made direct appeals to Prime Minister Nawaz Sharif 
if Pakistan disregards their requests not to explode the bomb but 
benefit by the political, military and economic assistance. If 
their appeal with all the reasoning they embody are rejected and we 
explode the bomb they may make a horrible example of us to other 
countries with nuclear weapons - ambitions as Dr Kissinger, US 
Secretary of State, had told Mr Zulfikar Ali Bhutto as Prime 
Minister in 1976. Exploding the bomb now means, not only brushing 
aside the Comprehensive Test Ban Treaty signed by 149 states of the 
world but also giving a rebuff to all the world leaders who have 
earnestly urged us to stay by the path of sanity and the lasting 
interest of Pakistan.
And since the weak are vulnerable in the global power politics, and 
the poor countries are exposed to too many pressures, Pakistan 
should give full weight to its long-term interest and greater gaits 
from non-explosion than the brief glory of exploding a bomb or two, 
and then facing all the economic problems cumulatively in a period 
of extreme economic travail for us.

Australia send Pakistan out of World Cup
Sydney Friskin
UTRECHT, May 28: Pakistan, the World Cup holders, went down 
gallantly to Australia whose 3-1 victory put Pakistan out of the 
semi-finals and consigned them to the play-off series for fifth to 
eighth places.
While luck ran out on Pakistan the superiority of Australia as an 
attacking unit was without question and in Jay Stacy they had the 
fire power to put themselves on top. He converted two of their five 
penalty corners. Pakistan had three of these awards all in the 
second half.
Germany in Semis: Germany, already assured of their place in the 
semi-finals, defeated South Korea 2-1 without making too many 
demands on their exertions. The result enabled the Germans to 
consolidate their position at the top of Pool A with 13 points from 
five matches and they are the only unbeaten side in the pool.
Canada trounce India: The gloom deepened for India who lost 4-1 to 
Canada and finished last in pool A consigning themselves to the 
play-off for ninth to 12th place. The last time this happened was 
in London in 1986 when India finished last after losing the play-
off for 11th place to Pakistan.
Pakistan ill-prepared for coming World Cup
Zafar Samdani

For the next World Cup, to be held in the summer of 1999 in 
England, practically every participating nation has entered the 
home stretch for preparations. In Pakistan, a proper beginning is 
yet to be made.
The African safari was presumably undertaken to harness resources. 
But it lost its way in the jungle of mismanagement and erratic 
performance. Available talent proved unequal for demanding 
international contests. Batting failed, bowling was largely off 
target and fielding down to the deepest level of incompetence.
The squad looked a faint shadow of teams which had won the honour 
of carrying the prized cup once and reaching the semi final stage 
in two tournaments surprisingly in the last edition of the meet 
despite glaring shortcomings in strategy, planning and 
administration and truant behaviour of the captain.
All the major team have decided on their captain for the 
tournament. Barring a mishap Steve Waugh, Brian Lara, Hansie 
Cronjie, Alstair Campbel, Stephen Fleming and Adam Hollioake would 
be leading their countries. Ranatunga would be leading Sri Lanka to 
defend the title the Islanders won in 97. Hollioake has been 
mentioned towards the end of the list because he seems to have a 
question mark against his name although he was assigned the job 
last year to help him settle down as captain by World Cup.
But, after the first flush of success in Sharjah followed a 4-1 
defeat in the West Indies. His own form was a factor in the 
failure. However, if England was forced to review the decision, 
there is a clear option in Alec Stewart, captain of the Test side 
this summer. He is certain to play the cup. Then there is Nasir 
Hussain in the waiting. There is a defined line of succession.
The picture in Pakistan is not just out of focus; it is also 
disturbed. There is no front runner for the job. But half a dozen 
players are regarded as being in the run, at least in the race. The 
issue of match fixing and gambling, to be precise, some player's 
integrity, is also casting dark shadows on the turf.
Two men have been in two deck, both former captains and ace 
players. Salim Malik is living through a second condemnation. He 
was in fine form in domestic cricket in the last winter. Wasim 
Akram was sacked in controversial manner and similarly recalled, 
though not as captain. Top people in the PCB are divided on how to 
treat him. But if Akram was resorted, the case of a return for 
Salim Malik would be strengthened. Malik was a successful captain. 
Akram is an experienced leader too.
A third possibility is Aamir Sohail. He looked in greater control 
of the team during the second Test against South Africa on the 
recent tour than any one since Imran Khan and Javed Miandad. 
Pakistan's victory in the Test enhanced his credentials. Keeper 
batsman Moin Khan has been mentioned in some dispatches. He has 
belligerence, experience and from all indications, he seems to be a 
certainty for selection. Academically, there are other 
possibilities too as Saeed Anwar and Waqar Younus have led the 
national side while Ijaz Ahmad is sufficiently experienced to be 
considered for the job. PCB may not have written off Rashid Latif. 
The field is certainly crowded.
Basit, Moin, Inzamam join camp
Sports Reporter
LAHORE, May 28: Inzamam-ul-Haq, Moin Khan and Basit Ali also joined 
the national senior cricket camp on second day on Thursday.
Camp Commandant and former Test opener Mohsin Hasan Khan told 
`Dawn' that barring Shahid Afridi and few others now playing as 
professional cricketers in Britain, all other cricketers had 
reported. He expressed satisfaction over the fact that most of the 
boys were looking fit and with six weeks' training they would be in 
the finest-possible shape.
Inzamam-ul-Haq, Yousaf Yohanna, Azhar Mahmood and Aamir Sohail were 
facing some fitness problems and the Pakistan Cricket Board (PCB) 
officials look keen to get them properly treated. Inzamam-ul-Haq 
did not take part in running. However, Azhar Mahmood, Yousaf 
Yohanna and Aamir Sohail did take part in training.
On Thursday, the cricketers did swimming at pool of a private club 
from 6 am to 9:30 am. That they did not show any signs of fatigue 
during the afternoon session, indicated that the boys had been 
doing running and exercises on their own to keep themselves fit.
The afternoon session lasted from 6 pm to 7:30 pm. The trainees did 
physical exerices under the supervision of Mohsin Hasan Khan and 
the physiotherapist Dan Kiesel. They also did running for almost 
half an hour for stamina-building.
"The trainees will be required to do swimming on alternate days. We 
intend to change physical exercises and mode of training every day 
so that all the muscles of the boys are properly developed. On 
Friday, boys will be asked to do short sprints," said Mohsin Hasan 
Khan in a determined tone.
When the darkness covered the Qadhafi Stadium on Thursday evening 
and the session concluded, Mohsin Hasan Khan was seen working out a 
strategy for next days' training with the physiotherapist Dan 
Kiesel. The morning session on Friday will last from 5:30 am to 
7:30 am. The afternoon session will continue from 6 pm to 7:30 pm.
While talking to Dawn, Test star Basit Ali said that he had joined 
the camp because his father was looking slightly better on 
Wednesday. Basit said:
"Papa has a serious problem of a kidney and was being treated in 
the Agha Khan Hospital. He is very weak and frail. We are hoping 
that he responds to treatment well. As a last resort, we may have 
to arrange his treatment at the Apollo Hospital in New Delhi, 
circumstances permitting!" 

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