------------------------------------------------------------------- DAWN WIRE SERVICE ------------------------------------------------------------------- Week Ending : 02 January 1999 Issue : 05/01 -------------------------------------------------------------------
Contents | National News | Business & Economy | Editorials & Features | Sports
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+ SBP sees GDP growth at 4pc in new year
+ Hakim Said's case being sent to military court today: PM
+ Sartaj briefs UK official: Indian arms build-up threat to region
+ Petroleum items being sold at higher prices
+ F-16s price refund: US confirms payment of $324.6m
+ Electricity production drops to less than half
+ IMF board meets on 15th to okay  package: Dar
+ Irregularities in  Senate secretariat's  accounts revealed
+ Operation to begin in interior of Sindh now
+ US to give Pakistan 200,000 tons wheat
+ Over 90 men appointed on political basis

+ Japan to provide $0.65m grant 
+ PIA earns Rs700m profit
+ Withdrawal date of Rs50 bond extended
+ Pegging rupee to euro under study
+ NWFP's SMEDA plans Rs36bn investment
+ Forex reserves cross $1bn mark; export, imports decline: Dar
+ Bullion traders seek free import of gold
+ SES loans for viable projects only 
+ Government borrows Rs75bn in  5 months
+ $ sinks to Rs49.30 in inter-bank market
+ Stocks lose 6.06 points as investors remain on sidelines

+ The old school - 2                              Ardeshir Cowasjee
+ Accountability in action                             Irfan Husain

+ Saeed Anwar 4th in world rankings
+ Pakistan to take part in games for disabled
SBP sees GDP growth at 4pc in new year
Mohiuddin Aazim

KARACHI, Dec 31: The current fiscal year is expected to close with 
a 4 per cent growth in GDP (gross domestic product) against the 
target of 6 per cent.
"Barring any untoward developments during the remaining part of the 
(fiscal) year GDP is expected to grow at 4 per cent," according to 
a State Bank analysis of the prospects for 1998-99. This analysis 
forms part of SBP annual report for fiscal 1997-98 released here on 
"The nuclear explosion and subsequent sanctions had large-scale 
effects on the economy. In particular, it adversely affected 
investors confidence," according to the report in an analysis of 
the developments during the first five months of 1997-98.
"The external sector came under great pressure," says the report 
adding that during July-November 1998 workers remittances declined 
by 39 per cent and foreign investment by about two-thirds compared 
with the same period last year.
"It is expected that in the second half of 1998-99 the economy will 
recover substantially from the adverse developments since May 
1998." The report says all external payments are expected to be 
regularized soon, arrears of current payments cleared latest by 
June 1999 and foreign exchange reserves are projected to the range 
of $1.4-2.0 billion by the end of fiscal year 1998-99.
The report makes it clear that macroeconomic targets were not 
changed in the wake of nuclear explosion adding that the rate of 
inflation during the current fiscal year is likely to remain in 
single digit.
The report said inflation as measured by CPI (consumer price index) 
rose by 6.6 per cent during the first five months of the year 
(July-November 1998) compared with the annual target of 8 per cent.
"Other inflows and payments were also affected," says the report.
"On the basis of the trends so far current account balance for the 
year is likely to decline from 3.2 per cent of GDP during 1997-98 
to 3 per cent of GDP (in 1998-99)," the report adds.
It says money supply went up by 2.3 per cent during 1st July-28th 
November 1998 compared to a larger expansion of 6 per cent in the 
same period last year.
The report says although the economy has passed through a period of 
turbulence in the first six months of the current fiscal year the 
performance for the year as a whole may turn out to be "quite 
While reviewing the performance of the economy in the last fiscal 
year the report said GDP growth rate recovered from a record low of 
1.3 per cent in 1996-97 to 5.4 per cent against the target of 5.5-6 
per cent.
The report said that in certain areas the performance of the 
economy "would have been less than satisfactory even if no adverse 
external shocks had taken place in May 1998. This was particularly 
so in the budgetary area."
"While expenditures were kept in check and budget deficit was lower 
than last year, it concealed poor revenue performance and slow 
progress in effecting structural budgetary reforms," said the 
report. It said CBR's revenue in fact declined from 12.4 per cent 
of GDP in 1995-96 to 11.7 per cent in 1996-97 and further to 10.6 
per cent in 1997-98. "The situation was saved by the decline in 
world prices of oil which, instead of being passed on to the 
consumer in the form of lower retail prices, were utilized to 
realise higher receipts from petroleum surcharge which offset the 
poor performance of CBR."
"On the expenditure side, development expenditure were cut down 
further from 3.4 per cent of GDP in 1996-97 to 3.2 per cent (in 
1997-98) while interest payment on debt increased from 6.4 per cent 
to 6.9 per cent." Defence expenditure also declined from 5.1 per 
cent of GDP to 4.9 per cent.
It said inflation as measured by CPI fell from 11.8 per cent in 
1996-97 to 7.8 per cent well within the target of 9 per cent.
It said gross national savings as percentage of GNP (gross national 
product) rose to 14.5 per cent against the target of 13.8 per cent 
in 1997-98 from 11.3 per cent in 1996-97.
The report said Pakistan met all the end-March performance criteria 
under the ESAF/EFF programme with the IMF and data up to the end of 
May 1998 indicated that the economy was on track for meeting the 
performance criteria for June 1998. It did not spell out the 
The report said the outstanding level of external debt rose by $1.9 
billion to $29.7 billion at the end of 1997-98. It said debt 
service payments both on account of long, medium and short term 
debt, fell from $5.1 billion in 1996-97 to $4.7 billion mainly on 
account of lower amortization payments.
It said total national debt stood at Rs2518 billion or 91.2 per 
cent of the GDP at the end of June 1998.
The report said overall fiscal deficit declined from 6.3 per cent 
of GDP in 1996-97 to 5.4 per cent in 1997-98 missing the target of 
5 per cent.
Government expenditures stood at Rs599.6 billion showing a 10.8 per 
cent increase over the expenditures in 1996-97 but were within the 
budgeted amount of Rs610 billion. It said the current account of 
the balance of payments declined from $3.8 billion in 1996-97 to 

$2.1 billion during 1997-98 adding the improvement was the combined 
result of lower trade deficit and services accounts and higher 
workers remittances.
Hakim Said's case being sent to military court today: PM

KARACHI, Jan 1: Prime Minister Nawaz Sharif disclosed on Friday 
that the cases relating to the murder of Hakim Mohammad Said and 
Maulana Salahuddin would be referred to the military courts for 
trial tomorrow.

Several other high-profile murder cases like those of former MNA 
Zohair Akram Nadeem, KESC chief Malik Shahid Hamid, education board 
chairman Ismail Memon, Col Bilal, and two sons of a former SP 
Azizur Rehman, would also be sent to these courts within the next 
24 to 48 hours, he said.
Mr Sharif made this statement to newsmen after presiding over a 
high-level meeting on law and order at the Governor's House here on 
Governor Moinuddin Haider, Interior Minister Chaudhry Shujaat 
Hussain, Labour and Manpower Minister Sheikh Rashid Ahmad, prime 
minister's principal secretary Saeed Mehdi, Sindh chief secretary 
Salik Nazir Ahmad, federal and provincial home secretaries, IG 
Sindh, the DIG Karachi, the DG rangers, and the chief of the 
citizen-police liaison committee (CPLC), Jameel Yousuf, also 
attended the meeting.
Official sources said during the meeting the prime minister 
expressed satisfaction over the performance of military courts and 
it was decided that the number of these courts would be increased.
The meeting was informed that of the 49 cases sent to the military 
courts 12 were being proceeded on, while judgment had been 
delivered in four cases.
Sources said the provincial administration had been directed to 
complete the investigations into the murder of Iranian cadets and 
the Americans on priority basis.
The meeting also decided to review all the appointments made in the 
provincial government in violation of the prescribed procedure and 
re-evaluate the qualification of such officials.
Talking to the newsmen Mr Sharif said military courts were 
performing satisfactorily and the criminals were being given the 
punishments they deserved.
The prime minister also expressed satisfaction over the law and 
order situation in Karachi which, he said, had improved. 
"Government's steps to improve the situation were bearing positive 
results and the performance of police and administration showed 
mark improvement under the guidance of the governor."
He said the government had succeeded in apprehending notorious 
criminals and the military courts were trying them. He assured that 
the government was sincerely working for restoration of peace in 
Karachi. "The people of Karachi have taken a sigh of relief because 
the city's economic activities have increased along with the 
investment reducing the unemployment levels," said the premier.

To a question he said the law and order and the national economy 
were his government's top priorities for the year 1999.  PPI/NNI

Sartaj briefs UK official: Indian arms build-up threat to region

ISLAMABAD, Dec 28: Foreign Minister Sartaj Aziz has expressed 
concern over arms build-up by India and stressed the need for 
finding a just solution to the Kashmir dispute in accordance with 
the UN resolutions which is imperative for lasting peace in the 
The foreign minister was talking to the Permanent Under Secretary 
of State at the British Foreign and Commonwealth Office, Sir John 
Kerr who called on him here today.
Mr Aziz informed Mr Kerr of Pakistan's abiding interest in 
maintaining peace and security in the region and expressed concern 
on the massive build-up of arms by India. He said New Delhi's 
nuclear ambitions would pose serious threat to regional peace and 
Later the British under secretary had a detailed round of bilateral 
consultations with senior Pakistani officials led by Foreign 
Secretary Shamshad Ahmad Khan.
The two sides, during the consultations, focussed on global and 
regional issues of mutual interest with particular reference to 
security environment in South Asia.
They covered bilateral matters and exchanged views on regional and 
international issues, including Kashmir, Afghanistan and non-
Both sides also focussed on continued cooperation between Pakistan 
and the UK and further augmentation of bilateral relations 
particularly in the economic field.
The two sides agreed to institute a framework of bilateral 
consultations on regular basis to exchange views as well as to 
promote understanding on regional issues of mutual interest.
PPI adds: Foreign secretary Shamshad Ahmad during his meeting with 
Sir John Kerr said Pakistan would welcome Britain mediation for the 
negotiated settlement of the long-standing Kashmir dispute, which 
had become nuclear flash-point in the nuclearized South Asia.
"Pakistan would cooperate with and welcome the engagement of the 
United Kingdom in a dialogue process with India," he said.
The third party mediation would ensure success of endeavours of the 
international community for the establishment of enduring peace in 
the region, a foreign office statement quoted Mr Ahmad as telling 
Mr Kerr.
The British under secretary arrived in Islamabad on Sunday on a 
three-day official visit to Pakistan for talks on varieties of 
The British official was also briefed in detail about Pakistan's 
position of nuclear non-proliferation. He was told that Pakistan 
sought to promote nuclear restraint and stabilization and prevent 
an arms race in the region.
Pakistan was prepared to work with "our friends and international 
community to promote goals of disarmament and non-proliferation in 
confronting with our legitimate security interests", official 
sources told PPI.
Petroleum items being sold at higher prices
Bureau Report

ISLAMABAD, Jan 1: The minister for petroleum, Chaudhry Nisar Ali 
Khan, on Friday admitted that the government was selling petroleum 
products to consumers at much higher prices only to show higher 
"There is a big gap between the actual cost of petroleum products 
and their prices in the open market," he said and added that "for 
the last several years a culture has developed where the petroleum 
products are sold on much higher rates only to show higher 
Responding to a question by Baboo Ghulam Hussain in the National 
Assembly, the minister, however, clarified that the prices of 
petroleum products were set by the finance ministry. "The petroleum 
ministry has nothing to do with it," he said.
Chaudhry Nisar informed the house that the prices of petroleum in 
1998 had been almost three times higher than what they had been in 
1987. He said the prices of regular and super petrol in June 1987 
had been Rs7.15 and Rs7.72 per litre, but in July 1998 those prices 
had risen to Rs22.19 and Rs23.64.
The prices of petroleum products had been increased 17 times and 
decreased twice since June 1987. In 1996 alone the prices had 
changed eight times.
About oil and gas explorations in the country, he said 13 
recoveries had been made during the last one-and-a-half years, 
which were expected to add four to six billion cubic feet gas to 
the existing supply. He said the gas was available to only 14 per 
cent of the people but the government was trying to supply it to 
the maximum possible number of people.
In view of the limitations of indigenous supply of natural gas and 
the new fuel strategy that aims at reducing the import of oil 
through natural gas substitution, he said, the government was 
considering a number of proposals for import of gas from 
Turkmenistan, Iran, Qatar and the UAE on the basis of the lowest 
gas price and delivery time.

F-16s price refund: US confirms payment of $324.6m

WASHINGTON, Dec 29: The State Department on Tuesday confirmed that 
an amount of $ 324,629,300 had been transferred to the State Bank 
of Pakistan as a refund for the price of F-16 aircraft.
An official echoed the words of President Clinton that an equitable 
solution to the difficult problem had been reached.
The State Department also officially welcomed the New Zealand 
government's decision to acquire the Pakistani F-16 aircraft."This 
decision will do much to help us resolve the status of these 
aircraft, once destined for Pakistan, while enabling New Zealand to 
significantly upgrade the capability of its air force," the State 

Department said.
Officials said Pakistan would now withdraw and release its $463.7 
million claim in connection with these aircraft. The money was paid 
from the Judgment Fund of the US Treasury, a fund used to settle 
legal disputes that involve the US government, they added.
"Pakistan will also receive a separate payment of about $2.3 
million from the Department of Defence, which is a refund derived 
from a prior sale of some of the equipment associated with the F-
" The remaining $140 million will be paid in shape of commodities. 
In fiscal year 1999, the United States will provide white wheat 
valued at about $60 million at prevailing market prices. With 
respect to the remaining $80 million, the specific nature of the 
additional goods and benefits, their quantities and delivery 
schedules will be decided by mutual agreement between the two 
sides", an official said.

Electricity production drops to less than half
Bureau Report

ISLAMABAD, Dec 29: The total electricity production of the country 
has been reduced to less than half of the combined capacity of 
WAPDA as well as private power stations, causing serious disruption 
in power supply to the consumers.
According to the figures laid before the National Assembly by the 
Federal Minister for Water and Power, Gohar Ayub Khan, the country 
was producing only 5,594 megawatts of electricity against the 
production capacity of 11,338MW causing forced loadshedding for 
hours in certain areas of the country.
Power shutdowns, particularly during Sehr and Iftari had evoked 
violent protests in the NWFP and Punjab.
The power generation at Tarbela has been dropped to 300MW against 
its maximum capacity of 3,728MW; the output at Mangla has been 
dropped to 208MW from its maximum capacity of 1,150MW and thermal 
generation has come down to 2,500MW from 3,100MW.

KAPCO production has been reduced to minimum of 86MW against the 
total capacity of 1,400MW. Similarly other IPPs are producing only 
2,500MW against their total capacity of 3,060MW.
The minister enlisted a number of factors, including shortage of 
water in Tarbela and Mangla reservoirs and fog, which have not only 
affected filters of thermal power plants but has also disrupted 
supply of fuel oil to the plants.
He said the government had been taking steps to overcome the 
shortage of power by regularizing supply of fuel oil to the thermal 
power plants and increasing the supply from Tarbela and Mangla 
during the peak hours.
He said the ministry of petroleum and natural resources had agreed 
to release furnace oil on daily payment basis without deducting 30 
per cent of the amount to adjust arrears.
At Tarbela and Mangla water would be stored during the day time and 
released at peak hours. The power generation at Tarbela would be 
raised to 2,000MW and at Mangla approximately 600MW.

The government, he aided, would deduct 75pc of the outstanding 
bills (Rs28bn) of the federal and provincial governments' from 
their budgetary allocations.

IMF board meets on 15th to okay  package: Dar
Bureau Report

ISLAMABAD, Dec 31: The executive board of the IMF is meeting on Jan 
15 to approve the $5.5 billion bailout package for Pakistan, and 
disburse $600 million upfront payment before the end of next month.
"The IMF board may meet a day earlier (Jan 14) to approve the broad 
financial package for Pakistan", said Finance Minister Ishaq Dar.
Talking to newsmen here on Thursday, he said Pakistan expected an 
upfront $600 million instalment within January, out of the revived 
$1.6 billion ESAF and EFF.
The minister said the Paris Club was likely to meet on Jan 29 to 
approve about $3.5 billion debt rescheduling and added that the 
club would hold a two-day session during which issues related to 
debts would be sorted out with bilateral members.
Responding to a question he said Pakistan would pay back $230 
million in January to its preferred creditors. "Now our position is 
much more improved and we can comfortably pay off our debts", he 
"As of today [Dec 31], our foreign exchange reserves have reached 
to $1.057 billion", he added.

Irregularities in Senate secretariat's accounts revealed

ISLAMABAD, Dec 30: The Special Audit Report of the Accounts of the 
Senate Secretariat of Pakistan for the period 1992-1997 in 1998 
revealed in its findings firstly an expenditure of Rs90.366 million 
in violation of rules, secondly irregular expenditure of Rs3.372 
million on vehicles, thirdly loss of Rs380,000 due to violation of 
propriety and fourthly non-production of record.
According to the AGP's report, the Directorate General Audit, 
Federal Government Islamabad, conducted audit of the Senate 
Secretariat for the period 1992-97 in 1998. The report was issued 
on Aug 24, 1998 after two discussions/meetings with the acting 
secretary, Senate Secretariat. The report has incorporated the 
replies provided by the Senate Secretariat in the report.
Listing its findings relating to the expenditure of Rs90.366 
million in violation of rules, the AGP report gave instances of 12 
violations. These include among other things, undue benefits of 
Rs46.461 million to the employees, irregular purchase of vehicles 
worth Rs35.922 million, non-reconciliation of deposits of Rs3.121 
million with Federal Treasury, expenditure of Rs1.809m without 
tenders, unjustified expenditure of Rs1.085m on additional 
telephones, expenditure of Rs1.085 million on additional 
telephones, irregular purchase of crockery worth Rs561,390, undue 
favour of Rs477,000 to interior decorator, irregular renovation and 
purchase of furniture for banquet hall involving Rs443,314, 
unauthorised expenditure of Rs217,100 on mobile telephone, 
irregular purchase of items worth Rs170,400, pick and drop facility 
to employees without surrendering monthly conveyance allowance and 
heavy expenditure by relaxing rules, regulations and government 
Under item relating to irregular expenditure of Rs3.372 million on 
vehicles are included three violations. These are:
Irregular expenditure of Rs1.890 million on purchase of Mercedez 
car and non-recovery of Rs167,674 for unauthorised use of two 
additional vehicles, irregular purchase of vehicle valuing 
Rs685,000 and non-recovery of Rs375,704 for unauthorised use of 
vehicle, unauthorised expenditure of Rs252,942 on use of cars.
Loss of Rs380,000 due to violation of propriety. The report said 
that the Senate Secretariat incurred an expenditure of Rs1.560 
million in September 1992 on purchase of a vehicle for deputy 
chairman to replace her vehicle which was destroyed in an accident. 
Three 1600 CC vehicles of different makes were short-listed with 
price of Rs1.180 million, 1.2 million and 1.560 million 
respectively. In disregard of the government instructions on 
economical purchases, the most expensive car was purchased. The 
lowest price was quoted for the same make of vehicle as was 
destroyed. Going for a different make caused an additional burden 
of Rs.380,000 on public exchequer. The vehicle was purchased from 
Karachi without obtaining NOC from the Cabinet Division as required 
under staff car rules. Moreover, the department of supplies was not 
approached to make the purchase. An amount of Rs10,760 was paid to 
two officers to bring the vehicle from Karachi.
According to the Report, the Senate Secretariat replied that the 
particular vehicle was purchased because its spare parts were 
easily available. The reply was not tenable because purchase of the 
same make of vehicle as was originally destroyed could have saved 
Touching on the non-production of record, the report said that 
during 1996-97, the Senate Secretariat drew Rs7.5m and Rs1.5m on 
different occasions and paid to CDA as advance payment for erection 
and renovation of a building for offices of 25 chairmen of standing 
committees. It said that no documents were shown to audit to 
establish purchase of materials and approvals of the advance 
payment nor any adjustment accounts, completion and audit 
certificates were provided.
Among the five recommendations made by the AGP report, the top one 
called that the senate secretariat should avoid frequent resort to 
Rule 21-A of Senate Finance Committee Rules to relax the Government 
orders and bans. The other recommendations are: The senate 
secretariat should exercise greater control on use of official 
vehicles and telephones. The senate secretariat should regularly 
conduct reconciliation of deposits made in State Bank of Pakistan. 
The senate secretariat should get recruitment and conditions of 
service of the Staff regulated from the Parliament.

The senate secretariat should strengthen internal controls.

Operation to begin in interior of Sindh now
Bureau Report

ISLAMABAD, Dec 30: The on-going operation in Karachi is being 
extended to interior Sindh to get hold of hardened criminals there.
"We have decided to expand the scope of the operation to interior 
Sindh to apprehend 70 per cent dacoits who are involved in car 
lifting and other crimes", said Interior Minister Chaudhry Shujaat 
Hussain while talking to reporters on Wednesday in the parliament 
He said reports were being received that beside car lifting, the 
dacoits in the interior Sindh were also involved in various other 
heinous crimes including murders and kidnapping for ransom.
He said five military courts were further being established in 
Karachi and Sukkur for trial of cases related to heinous crimes. 
Seven courts, he said, had already been established which were 
performing their duties satisfactorily.
Responding to a question he said Sindh Governor had been extended 
all political, moral and financial support to improve the law and 
order situation in Karachi. "If he asks for the setting up of more 
military courts, we will not disappoint him", he said adding the 
purpose was to arrest the criminals and award them exemplary 
Mr Hussain told a reporter that over 20 cases had been returned by 
the military courts for not being heinous, now to be tried in 
normal courts. "The legal department of the military authorities do 
not entertain ordinary cases".
He rejected the argument of the MQM members that there were more 
crimes in Punjab than Sindh that also warranted the establishment 
of military courts in that province. "I challenge the figures 
provided by Sheikh Liaqat Hussain in the House on Tuesday", he said 
alleging that the MQM had presented total fake figures about the 
crime rate in the Punjab.
The interior minister also disagreed that the government was 
victimizing and harassing the MQM leaders and workers.
He claimed that the law and order situation in the Punjab was far 
more improved than Sindh and there was no need to have military 
courts there (Punjab).
Asked about the delay in the establishment of metropolitan police, 
he said the issue required consensus as the provinces were opposing 
it. He said although the draft law was being currently vetted by 
the law ministry to have such a police, it would not be established 
unless all the four provinces agreed to it.
To a question the minister said the opposition leader, Benazir 
Bhutto, had been allowed by the court to proceed to Dubai. However, 
he said her name was on the Exit Control List (ECL) and was still 
to be removed.
"In our society people spend their Eid in their own country and our 
leader of the opposition goes abroad for this purpose which is very 
strange to me". When reminded that she wanted to go to Dubai to 

meet her children, he said she should bring them in Pakistan where 
there were many good schools of international repute.
To a question he said MQM chief Altaf Hussain would not be allowed 
to hold telephonic press conference in Islamabad on Sunday. The 
minister said he had directed the concerned authorities that no 
federal lodge should be used for any news conference by MQM leader. 
"We can not allow any such activity in the federal territory", he 

US to give Pakistan 200,000 tons wheat
Shaheen Sehbai

WASHINGTON, Dec 28: The US has decided to donate another 200,000 
tons of wheat to Pakistan as part of its food aid to the "basket 
cases of the world."
Officials said this would be in addition to the 100,000 tons 
donated by Washington after Prime Minister Nawaz Sharif met 
President Clinton in New York during the UN General Assembly 
"This donation of 200,000 tons would have nothing to do with the 
wheat and other commodities which Pakistan will get in lieu of the 
$140 million of the F-16 money," a Pakistani source told Dawn.
Clinton agreed to make the donation of wheat after his meeting with 
Nawaz Sharif in Washington, but basically he is trying to 
compensate the wheat growers who have huge surpluses this year.
Official announcement of the latest donation will be made shortly, 
officials said. It would be shipped to Pakistan by US for which 
arrangements are being made and a shipping agent, specializing in 
the area, may be appointed by the US Department of Agriculture.
Reports said a close friend of Nawaz Sharif, Saeed Sheikh, may be 
appointed by the department as the special agent for these 300,000 
tons of wheat shipments.
Mr Sheikh told Dawn on Monday if his company was appointed, this 
would have nothing to do with Pakistani purchases or shipments of 
wheat as this was a totally US-controlled matter and they only 
needed expert advise from a company dealing in shipments to that 
Details of wheat shipments to Pakistan in lieu of the F-16 money 
are still being worked out as Pakistan has proposed to buy some 
other commodities, including some spare parts from the US, sources 
"Pakistan is trying to get some spares for its military under the 
new arrangement in which $140 million worth of payments would be 
made in kind, in addition to the $327 million to be paid in cash 
within the next couple of days," they said.

Over 90 men appointed on political basis
Ansar Abbasi

ISLAMABAD, Dec 27: The year 1998 has been one of the worst years 
for civil bureaucracy in Pakistan for mounting politicization, 
intensified inter-service rivalries, controversial promotions and 
non-resolution of outstanding issues.
According to official sources, during 1998 well over 90 persons 
were appointed on political basis and were given key positions in 
the civil bureaucracy on the orders of Prime Minister Nawaz Sharif.
The political appointees include retired government servants and 
persons from open market. At least 13 persons were offered grade 22 
positions; 17 were adjusted against grade 21 posts; 31 were offered 
grade 20; and the rest in other grades.
These include the retired civil servants re-employed in violation 
of the rules and without fulfilling the conditions for re-
employments. These political appointees also include those retired 
military officers who were re-employed without following the 
prescribed procedure.
"Most of these appointments were irregular," a source said, adding 
the prime minister had been using his discretionary powers to make 
these appointments.
Political appointments in certain cases is allowed under the rules 
provided it is done in the public interest. However, during the 
year under review hardly any of these political appointments were 
made on the recommendation of relevant government agencies.
"Everything has been travelling down from big office," a source 
The sources said transfer of bureaucrats remained a tricky issue 
and most of the appointments at key positions were made without 
consulting the government agencies which were supposed to initiate 
and regulate the transfers of bureaucrats.
The establishment division, which is responsible for the career 
planning of the officers, has turned into a post office and is 
there only to stamp whatever is communicated to it by the prime 
minister's office.
Under the rules the prime minister issues the transfer order for 
bureaucrats in grade 21 and 22. The rest is the jurisdiction of the 
secretary, establishment. But in case of the transfer of grade 21 
and 22 bureaucrats the establishment division is the authority to 
identify the vacancy, look for suitable candidates and propose a 
panel of officers before the prime minister. The PM is then 
supposed to select one of the officers.
"But in actual practice no such exercise is done. Now everything is 
done by the PM's office who simply conveys as to who should be 
transferred against which position," a source said, adding during 
this year almost all the key positions like federal secretaries, 
chief secretaries, inspector generals of police (IGPs) and heads of 
different departments were decided without the knowledge of the ED.
"The ED has been only bothered at the time of the issuance of 
notifications," the source said.
Even in those cases where the secretary, establishment, is the 
competent authority, the PM office has been interfering to give the 
plum postings to 'blue-eyed' bureaucrats.
Sources in the PM's office confirmed to this correspondent that 
most of these posting orders were issued by the PM's office on the 
wish of the parliamentarians and other influentials.
The promotions have also been very controversial during this year. 
Most of the groups of the civil bureaucracy remained frustrated 
because of their bleak promotion prospects. The district management 
group, however, got good promotions. It got two promotion in grade 
22, 14 in grade 21, at least 21 in grade 20 and others.
Information group officers, having very bleak promotion prospects, 
were happy during this year because of their en-block promotions. 
These promotions were made without following the statutory 
Disparity in the pace of promotion between different groups has 
further worsened. Bureaucrats, particularly belonging to the groups 
of office management/secretariat, information, military land and 
cantonment, railways, and commerce and trade, remained the worst as 
far as promotion is concerned.
The government has set a new precedent during the year 1998 by 
giving out of turn promotions to at least four of its 'blue eyed' 
bureaucrats. Two juniors were promoted (in grade 20 and 21 
respectively) in PSP; and one each in secretariat group (in grade 
22) and DMG (in grade 20) without considering a brigade of their 
All these officers were promoted without following the statutory 
provision or fulfilling the prescribed procedure and in complete 
violation of government rules.
Long-standing issues, like the fixation of share for different 
occupations in the secretariat group, remained unresolved. The  
issue is pending since the introduction of the 1973 administrative 

Japan to provide $0.65m grant 

ISLAMABAD, Dec 28: Japan will provide grant aid to Pakistan, 
amounting to 75.211m Yen (approximately $0.65m) for refinancing the 
payment obligation of Pakistan to Japan's Overseas Economic 
Cooperation Fund's (OECF) incurred under the agreements concluded 
between 1974 and 1978.
For the purpose, Exchange of Notes was signed on Monday between 
Minoru Kubota, Ambassador of Japan and Zaheer Sajjad, Sec, Economic 
Affairs Division on behalf of their respective governments.
The refinancing has been arranged in accordance with Resolution 
165 of the 9th special session of the Trade and Development Board 
of the United Nations Conference on Trade and Development held in 
According to a press release by the embassy of Japan, since 1961, 
Japan has been assisting Pakistan through Overseas Economic 
Cooperation Fund's (OECF) Yen Loans. At a time when Pakistan faces 
difficulties of debt payment due to the prevailing financial 
crisis, OECF has decided to continue to disburse its soft and long 
term loans to Pakistan.
In addition, Japan has decided to extend grant assistance for the 
debt relief of Pakistan and the amount will be used by Pakistan as 
a balance of payments support for purchasing commodities like 
electrical machinery, transport equipment, optical and medical 
instruments, scientific apparatus and other commodities mutually 
agreed upon between the two governments.

PIA earns Rs700m profit

KARACHI, Dec 30: PIA, suffering an accumulated loss of nearly five 
billion rupees until last year, has registered a profit of Rs 700 
million by Dec 31.

The airline, through re-structuring of its manpower strength, saved 
Rs 100m a month which would mean a net saving of Rs. one billion a 
year. This was despite the payment of Rs.2.5 billion in golden 
handshake scheme carried out last year.
Nadir Chaudhry, advisor, said an annual saving of dollar nine 
million has been effected through innovative technology in 
management information and marketing, finance and corporate 

Withdrawal date of Rs50 bond extended

KARACHI, Dec 30: Government has extended the deadline for 
withdrawal of Rs 50 prize bonds up to March 31, '99. However, no 
draws for the bond will be held during the period.

According to a notification issued Wednesday, the prize bonds of Rs 
50 will be completely withdrawn with effect from March 31, '99, as 
against the previous deadline of Dec 31, '98.
These bonds will neither be issued nor encashed after the deadline.
The last prize draw of Rs 50 denomination was held on Dec 1 at 
The prize winning bonds will be entertained upto 6 years after the 
date of the relevant draw as per rules.
The Rs 50 bonds were introduced on July 1, '81 and till date its 
1047 series have been issued. Each series contained 100,000 pieces.
In all 70 prize draws in respect of these bonds have been held over 
17 years on quarterly basis including the last draw. Upto February 
1996, in each draw 302 prizes with an aggregate prize money of Rs 
125,000/- in each series were awarded.
However, effective from March 1, 1996, the number of prizes reduced 
to 282 in each series while the prize money was increased to Rs 
150,000 to make scheme more attractive.
The bond has, however, lost its popularity particularly with the 
introduction of higher denomination prize bonds having attractive 
and big prize money.
Prize bonds of other denomination of Rs 100; 500; 1,000; 5,000; Rs 
10,000 and Rs 25,000/- will continue to remain in circulation.APP

Pegging rupee to euro under study
M. Ziauddin

ISLAMABAD, Dec 31: Pakistan is seriously considering pegging its 
dollar-devastated rupee on to the euro, the unified currency of 
eleven member countries of European Union (EU) which will come into 
being on Friday, Jan 1, 1999.

Sources said that the dollar short State Bank of Pakistan was 
looking at the euro closely to see if by pegging on to it, the 
value of the rupee could be brought to its realistic level without 
appearing to be depreciating the currency which the IMF wants 
Pakistan to do at the earliest.
The official financial managers in Pakistan have already begun 
evaluating the likely impact of euro on the country's deposit base 
and its foreign trade.
Pakistan's finance minister has recently hinted at delinking 
the rupee from the dollar and pegging it to the euro after weighing 
the advantages and disadvantages.
Pakistan's foreign minister had suggested on Nov 7, 1998 that since 
one-third of Pakistan's imports originate from European Union, it 
would be beneficial to maintain at least one-third of Pakistan's 
foreign exchange reserves in euro. Half the reserves, he pointed 
out, could be maintained in dollars and for the balance there could 
be a flexible decision based on trade and flow currency trends.
Pak rupee, which was earlier linked to the pound sterling, was 
pegged to the dollar on May 12, 1997. And in January 1982, Pakistan 
delinked the rupee from the dollar and is since maintaining a 
managed floating exchange rate with reference to a trade weighted 
basket of currencies of country's major trading partners. The 
dollar, however, has continued to be the intervention currency.
According to a latest study conducted by Shaik Ziauddin of Area 
Study for Europe at the Karachi University, EU is by far Pakistan's 
largest trade partner, absorbing 31 per cent of this country's 
exports and accounting for 24 per cent of its imports.
The growth in trade has been significant in recent years, with two 
way trade increasing by over 183 per cent in the period between 
1994-95 and 1996-97.
During the same period, Pakistan's total external trade grew by 105 
per cent indicating the enhanced position of the EU as Pakistan's 
most important trading partner.
Nearly 50 per cent of Pakistan's exports to EU have entered the 
area duty free under the Generalised System of Preference (GSP).
Textiles and leather products occupy a particularly important place 
in EU- Pakistan trade, as they represent 80 per cent of Pakistan's 
exports to the EU.
This reflects Pakistan's strong penetration of the European market. 
Sports goods and equipment is another sector in which Pakistan has 
established a strong presence in the EU market. 
On the other hand EU has a 20.9 per cent share in world trade as 
compared to 19.6 per cent and 0.5 per cent share of the US and 
Japan respectively.

NWFP's SMEDA plans Rs36bn investment
Intikhab Amir

PESHAWAR, Dec 30: The Small and Medium Entrepreneur Development 
Authority (SMEDA) has chalked out a Rs36 billion plan for the 
development of small and medium industries in the Frontier province 
in a four- year period, the Authority's NWFP head Sultan Tiwana 
told Dawn.
"The money would be loaned out in four phases as during the first 
six-month period we have plans to issue loans of Rs 1 bn, an other 
Rs 2 bn in the second six months and Rs 7 bn in the second year of 
operations, Rs 11 bn in the third year and Rs 15 bn in the fourth 
and final year," said Tiwana, whose services for the SMEDA, NWFP, 
have been acquired from the Bank of Khyber where he is the director 
Micro Business and Rural Development.
Six sectors with 16 sub-sectors have been identified in which the 
Frontier province carries potential for the SMEDA funding.
The six sectors include agro-forestry, engineering, mineral, 
tourism, leather & textile and crafts whereas the sub-sectors of 
these sectors where the SMEDA will be focussing are fruit and 
vegetable processing, farm management, furniture, fresh flowers and 
orchards, light engineering, sporting arms, agriculture 
implements/tools, gems mining/processing and marketing, marble and 
economic minerals, hotel/restaurants, tour 
programmes/services/sports, weaving, leather products and garments, 
bronze, carpets and rugs and woollen products/patti(speciality of 
Dir and Chitral districts).
Though there was no such intimation as how much of the total Rs 250 
bn volume of SMEDA would be spent in the Frontier province, said 
Tiwana, adding "we are hopeful that the province would get the 
amount [Rs 36] the SMEDA, NWFP has based on its four-year plan of 
According to him, NWFP has got tremendous potential in these six 
sectors as in accordance with the initially available data there 
are about 25,000 units [small and medium] of these sectors in 
different parts of the province.
"Each of the six sectors and their sub-areas has from 400 to 4000 
units presently under operations in the province creating over 
125,000 jobs and involving a total investment of Rs 2.5 bn," said 
the SMEDA, NWFP head, adding "so much potential these sectors have 
got that as per conservative estimates there is a value addition of 
Rs 2.5 bn annually in these areas which means 100 per cent of 
capital is recreated every year".
There was much more scope in these sectors, said Tiwana , adding if 
invested the money could be double and triple in a short period of 
Though the amount of Rs 36 bn has not yet been approved or 
intimated by the SMEDA head-office as share for the NWFP out of the 
total lending volume of Rs 250 bn, Tiwana said that investment 
would definitely be provided to small and medium entrepreneur on 
satisfaction of the scope of the business they would be going to 

Forex reserves cross $1bn mark; export, imports decline: Dar
Bureau Report

ISLAMABAD, Dec 29: With the reciept of $324.6 million from the 
United States on account of F-16 planes Pakistan's foreign exchange 
reserves has increased to $1.21 billion, said Finance Minister 
Ishaq Dar.

Speaking at a news conference here on Tuesday about the economic 
performance of the country, he said that the foreign exchange 
reserves had crossed $1 billion mark which he believed was a 
positive development and a sign of recovery of the economy.
Mr Dar said the government had no immediate plan to spend $324.6 
million on the purchase of defence equipment.
"These would be used for improving the balance of payment's 
position as at this stage we can not afford any new military 
purchase", he added.
He said Pakistan had passed through all the difficult period 
despite international recession, South-East Asian crisis and the 
contraction of the Japanese economy. "I can now say with confidence 
that Pakistan is fast coming out of the problems that it faced 
immediately after May 29".
Responding to a question Dar said the IMF executive board would 
meet in the mid-January to approve $5.5 billion bailout package 
which also included the proposed $3.5 billion rescheduling by the 
Paris Club.
"We have been told the Paris Club too would hold a two-day meeting 
in January to formally approve the rescheduling of Pakistani 
loans", he said.
Dar told a reporter that it was going to be lengthy session of the 
Paris club where debt issues would be settled individually with the 
bilateral donors.
He again reiterated that there was no question of devaluation of 
Pak Rupee during the current financial year.
Asked how much Pakistan had to return to the international lenders, 
he said around $60 million would be repaid to the World Bank and 
the IMF jointly during January, which he believed would not cause 
any worry for the government.
The minister said the year 1999 would witness an unprecedented 
campaign against the tax evaders and loan defaulters and those 
involved in smuggling.
He admitted that nothing substantial had been achieved so far by 
chasing loan defaulters or curbing smuggling during the first two 
years of the PML government. "You should hold me accountable if I 
did not deliver on both these accounts during next year", he said 
claiming that so far he had fulfilled all his promises made with 
the public and the media.

Bullion traders seek free import of gold

KARACHI, Dec 29: Bullion traders have urged the government to allow 
free import of gold to neutralize the negative impact of the Indian 
stuff on their daily sales which has created crisis-like conditions 
on the local market.
"Our daily combined sales of jewellery after value addition is 
8,000 tola worth Rs40 million, the Indian stuff has taken away 
about 30 per cent of the total", said an office-bearer of the 
Bullion Traders Association.
He said 30 per cent of the entire market is a big quantity and the 
pace with which the Indian jewellery invasion is penetrating deeper 
into the interior could cause the collapse of the local trade.
The Indian jewellery is much cheaper than the one produced in 
Pakistan as the gold trade is free there and the government also 
gives rebate on jewellery export after value addition, dealers 
But the import in Pakistan is not free as importers have to deposit 
$10,000 with the central bank and pay an import duty at the rate of 
$2.5 per ounce. Moreover,imports are allowed only against exports 
of jewellery.
"Our immediate worry is to stop the Indian jewellery invasion", 
bullion dealers said adding" we are not afraid of healthy 
competition but the current situation amounts to fight between the 
"Give us the facilities enjoyed by our Indian counterparts, we will 
throw them out of the Pakistani market within no time", they claim.
Pakistan's current jewellery exports are placed around $25 million 
but "we can boost them to $100m if we are treated at par with the 
Indian producers", they added.
SES loans for viable projects only 

ISLAMABAD, Dec 27: Under Self-Employment Scheme the domestic banks 
and development finance institutions (DFIs) would be giving Rs 10 
billion loans to unemployed persons during financial year 1998-99 
but for viable projects only, official sources said.
The SES was unveiled by the prime minister three months back to 
provide loans to jobless youths to expand network of small to 
medium enterprises and to boost exports.
The bankers have apprised the prime minister that their financial 
institutions cannot afford to lend money for the unviable projects 
that involve high-risk of wastage of precious money.
They are also believed to have briefed the prime minister that most 
of the loanees were asking for loans for grocery, boutiques 
business which have less potential of growth compared to other 
Updated details show that three months after the beginning of the 
scheme the banks have disbursed 1.50 billion rupees, a trend which 
makes clear the banks were exercising extreme caution in giving 
loans to applicants.
Sources disclosed the Small Business Finance Corporation has given 
Rs 480 million to 4,656 applicants, United Bank Limited disbursed 
Rs 1.70 million, Habib Bank Rs 4.20 million, Allied Bank Limited Rs 
345 million, National Bank Rs 170 million, Bank of Punjab 29 
million, Bank of Khyber Rs 27 million and Muslim Commercial Bank 
disbursed Rs 11 million.
Sources, however, have disclosed that Prime Minister Nawaz Sharif 
has directed the bankers to speed up the process of loans 
disbursement to achieve the desired results of giving loans to 
jobless youth and to spread network of small businesses throughout 
the country.
The PM is personally receiving complaints of the applicants and 
expressing his concern against slow disbursement of loans. He has 
advised the banks to take decision promptly regarding sanction of 

Government borrows Rs75bn in 5 months

KARACHI, Dec 29: The government bank borrowing totalled about Rs75 
billion during the first five months of the current fiscal year 
against the target of Rs43 billion set for the whole year.
This fact came to the fore at a meeting of the central board of 
State Bank held in Islamabad on Tuesday with SBP Governor Dr 
Muhammad Yaqub in the chair.
A SBP press release said the board noted that "drying up of foreign 
inflows and inadequate revenue performance were the two main 
factors responsible for excessive government borrowing."
The board was informed that monetary impact of the excessive 
government borrowing "was much less because nearly Rs34 billion of 
this borrowing was kept as deposits with the State Bank 
representing rupee counterpart of foreign public debt that could 
not be paid due to foreign exchange constraints." This means that 
the net impact of excessive borrowing on monetary system was that 
of Rs41 billion only "which was within the target for the year."
The release said the board also approved SBP annual report for 
1997-98 which would be released to the press on Thursday (December 
31). It said the board made revisions in credit plan for 1998-99 
and initiated "the process for inclusion of euro as approved 
foreign exchange."
No senior SBP was available to say what exactly the board did in 
case of euro. Under the rules SBP board is to declare euro an 
approved foreign currency and recommend to the government whether 
it can be used as part of foreign exchange reserves before the 
government takes a decision.
Finance Minister Ishaq Dar had said earlier the government would 
watch the performance of euro for at least three months before 
making it part of foreign exchange reserves. The State Bank has 
already given a go-ahead signal to banks to start euro transactions 
and banks are ready to do it from January 5.
The board was also briefed on the possible monetary scenario 
following likely reactivation of ESAF/EFF next month "when 
availability of external resources and expected external debt 
restructuring" would help reduce net government borrowing for 
budgetary support with the result that for the fiscal year as a 
whole this might have a contractionary impact on money supply. 
"This will keep the rate of monetary expansion in 1998-99 much 
lower than last year and the target of the originally approved 
credit plan."
"In the context of anticipated normalization of international 
financial relations and inflow of external resources the board 
approved a revised credit plan for 1998-99 that envisages monetary 
expansion of 9.2 per cent in 1998-99 as compared with the original 
credit plan target of 13.6 per cent." The SBP press release did not 
say whether the limits for government borrowing and private sector 
borrowing from banks have been changed for this purpose.

The lowering of the target for monetary expansion "is entirely due 
to the anticipated contractionary impact of the government sector," 
the release said. "Credit to the private sector will remain 
protected as originally approved and in addition foreign sector is 
expected to become expansionary due to anticipated accumulation of 
net foreign assets."
The board, however, underscored the importance of prudence in 
lending to the private sector by the financial institutions to 
protect depositors' interest and health of the banking institutions 
and in this regard hoped that "the lending process will continue to 
remain depoliticized."

$ sinks to Rs49.30 in inter-bank market

KARACHI, Dec 31: The dollar plunged to Rs49.30 in the inter- bank 
market on Thursday from Rs51.00 on Wednesday due to a host of 
reasons including increased supply.
Consequently the State Bank closing composite rates fell to 
Rs49.26/49.71 per US dollar for spot buying and selling from 
Rs50.30/50.74 on Wednesdayshowing a fall of Rs2 per dollar or 4 
per cent.
Senior bankers said floating inter-bank rates opened around Rs50.85 
on Thursday and after an hour or so fell to Rs49.30 because there 
were not many buyers around. They said the State Bank later on 
intervened in the market through dollar-rupee swap for one week 
that boosted the demand for the greenback and helped it close 
around Rs50 at the end of the day. SBP did not say anything.
"The supply of the greenback was up as the exporters who had held 
up their export remittances hurriedly sold them to escape 
penalties," said a treasury manager. In mid-November the State Bank 
had reduced the permissible time from 14 to 7 days for the 
exporters to sell 50 per cent of their export proceeds in the 
inter-bank market. Several exporters had held up export proceeds in 
their special bank accounts anticipating a better exchange rate at 
the year-end. "But as things turned out to be otherwise they better 
started offloading their stocks," said a banker referring to the 
fall of the dollar in inter-bank market during last three days.
Bankers said the demand for the greenback was low on the other hand 
because importers were not making big purchases after the change in 
the composite rates mix from 50:50 to 80:20 last week.
On top of all this there was another reason for the steep decline 
of the dollar: banks were eager to keep their net open positions 
within limits at the year-end so all those who had taken long 
positions earlier sold out their stocks of dollars.
As there were less buyers of foreign exchange than the sellers the 
forward sale of dollars also remained sluggish. Bankers said 
premiums fell to 2.15 per cent and 6.8 per cent on one-month and 
three-month forward sale and to 10.40 per cent on three-month sale.
Senior bankers said the steep fall of the greenback would send a 
message to exporters not to indulge in currency speculations 
because they said scores of exporters incurred heavy losses on 
Thursday as the dollar nose-dived.
Bankers said activity on rupee counters was rather slow and no huge 
funds changed hands on Thursday. 
They said call rates shot up because of the year-end with offers 
rising to 16.5 per cent and bids to 10 per cent. They said the 
rates came down to 2-3 per cent at the end of the day as the market 
remained still surplus by around Rs5-7 billion.
Some bankers said the State Bank also conducted an informal open 
market operation to suck in part of excess liquidity in the market 
but there was no official word on it from the State Bank.

Stocks lose 6.06 points as investors remain on sidelines

KARACHI, Dec 31: Stocks closed the last year account on Thursday on 
an insipid note as both foreign investors and local financial 
institutions did not cover positions to fill in the technical 
portfolio gaps owing perhaps to settlement problems. The KSE 100-
share index shed 6.06 points at 945.24.
Investors appeared to be in a mood to maintain a status quo as 
bulls and bears did not cross the delicate dividing line, allowing 
the massively mauld financial year to move into the history record 
books as one of the leanest year the stock market ever witnessed 
during the last 50 years.
"Although the worst seems to be over, the new year market debut 
could hardly be that attractive despite bright prospects of 
resumption of foreign aid suspended after Pakistan became a nuclear 
power in late May this year," stock analyst Faisal Abbas at AHRA 
Aid or no aid the important point to note is that the economy is 
not responding to various corrective steps as it should have and 
until this happens the market might not find one sound reason to 
respond to its technical demands, analysts at the KASB & CO 
The opinions about the new year stock trading widely differ and 
that in a way reflect the possible market behaviour during the 
first half of 1999.
But the second half could be a bit better as many financial 
problems will be resolved by that time, a member of the KSE 
"The market could take years to clear the financial debris heaped 
on it by an unprecedented stock market collapse, although there are 
chances of a progressive recovery from the current bottom levels," 
he added.
"But there could hardly be anything to cheer about for the small 
investor who is the chief victim of the market collapse, losing his 
saving in totality," said a leading floor broker.
However, it was an eventful year for more than one reasons. The 
year that just ended saw the KSE 100-share index breaching its base 
level of 1,000 points in post-nuclear tests sessions and touched 
the all-time low of 765.00 points from the year's peak level of 
1400.00 points.
The market capitalization also fell to a record low of Rs 234 
billion from Rs 400 billion during the year, showing a decline of 

over 50% both in the KSE index and the market capitalization.
There were technical flutters here and there depending on positive 
background news but the market did not attempt to show a measure of 
strength based on its inherent strength and strong dozes of 
institutional support.
How will the stock market behave during the new year is anybody's 
guess but some analysts are optimistic about its future direction 
basing their assessment on the resumption of foreign aid, notably 
the economic bail-out package of $5.5 billion arranged by the IMF.

Back to the top
The old school - 2
Ardeshir Cowasjee

GRATIFICATION! Messages have come in during this past week from Old 
Virbaijeeites scattered around the world expressing their happiness 
at having read about their old school. Those who studied under Mrs 
Dinoo Mistri have asked me to convey to her their gratitude for 
what they learnt under her good guidance.
Respecting seniority, I submitted to the admonishment of an 
octogenarian. You ungrateful man, he said, you forgot your 
grandfather Fakirjee Cowasjee. You ommitted to mention one of his 
finest acts of benevolence wrought just before the end of the World 
War. Fading memory, I wondered and politely interrupted to remind 
him that my grandfather had died in 1939, just after the WW2 broke 
out. "What a fool I was, what a damned fool, to think I was the 
earth and sky." He was talking about WW1.
Towards the end of 1918, when taken around the school by Principal 
Rustom Dastur, my grandfather noticed that some boys did not carry 
much in their Tiffin boxes.
He forthwith announced that as of the next day none would go 
hungry. Meals for the needy were to be provided at his expense. He 
created a trust fund in commemoration of his parents, Cowasjee and 
Virbaijee Variawa. The 'Bhojan Fund' till exists to feed those BVS 
boys who need to be fed. I wonder why it is, the Old Boy went on to 
ask, that Nawaz Sharif does not feed the hungry and the poor of his 
country before filling his own stomach?
One message came from a Virbaijeeite who has been away from 
Pakistan for 30 years and has settled in Canada. He said he would 
now like to return and teach at the BVS. Another from one who was 
in the US working with Moody's. Whilst wishing the old school well, 
he expressed his distress at the fiscal rating of Pakistan. The 
graph just dips, dips, and goes on dipping.
A Hindu from Hong Kong e-mailed expressing his gratitude to our 
community, as he had read and benefited from education received at 
the Bai Avabai School at Bulsar. Seemingly apologetic, he mentioned 
that his school had taught just one politician, a man of quaint and 
orthodox views, but, as we all acknowledge, of the greatest 
integrity and honesty  Morarji Desai  who rose to be the prime 

minister of India. Another Hindu who read the column corrected my 
Gujerati in my quote about the donkey. His father had taught him: 
"Gadheda ne bey var salaam karvi, khoob vali, vali ne." Translated, 
this means: The bigger the donkey you meet, the lower you must bow 
and salaam.
One Old Virbaijeeite asked me if I could find any logic in Nawaz 
Sharif. With all the power he has, why does he want more power? Why 
is he fiddling with the 15th Amendment? May I suggest that he e-
mail Nawaz Sharif ('primerminister@pak.gov.pk') and ask him 
This same suggestion goes to all who transmit messages asking me to 
explain to them the mindset of our prime minister and his acolytes.
Another OV e-mailer expressed his hope that in future the school 
will be lucky enough to keep up its record of not producing 
politicians and debt defaulters, and that it will continue to turn 
out men who give to society more than it gives them.
Reproduced is one message received from a Pakistani, a Muslim, an 
Old Nedian, settled in the US:
"What a wonderful way to express your gratitude for the source of a 
solid foundation of your life. I would like for you to write about 
NED as well. Were it not for the Parsi community and the 
benevolence of the people NED would not exist, and if it were not 
for NED Pakistan would have been lost without engineers. I am not 
sure what complexion NED has taken now, but during my tenure there 
as a student (1966-70) it was an extremely nice place, in cramped 
quarters, and a great education it delivered.
"I would say that there are very few graduates of NED who have left 
Pakistan for higher education and not made a very good life for 
them abroad. I truly enjoy your opinions. It makes my day since I 
read them before I [venture] into the mad world of business in the 
great metropolis of Houston, Texas."
In the second decade of this century, Sindh needed engineers. So 
the citizens of Karachi rallied, donated funds, a college was 
founded in 1921, and named The Prince of Wales Engineering College 
in commemoration of the visit to India of the Prince, the future 
Edward VIII.
In 1924, the four sons of Nadirshaw Dinshaw  Hoshang, Monocher, 
Faredoon, and Dinshaw  gave substantial amounts for the building, 
development, and running of the college and it was renamed the 
Nadirshaw Eduljee Dinshaw Engineering College. With the passage of 
time, post-Partition, the college converted itself into a 
university, the NED.
After Zulfikar Ali Bhutto took over what was left of Pakistan at 
the end of 1971, his greed for absolute power and patronage led 
him, amongst many other disastrous acts, to nationalize schools and 
Those that escaped nationalization suffered in other ways  their 
premises were taken over, they were harassed, and so forth. The 
universities became hotbeds of political, ethnic and religious 
strife. The days of armed student bodies began on our campuses, 
when kalashnikovs were carried with greater pride than books.
At the end of 1994, the Chancellor of NED, Governor of Sindh, 
Mahmoud Haroon, prevailed upon me to be his nominee on the 

Syndicate. My reluctance was countered by him. The university is 
named after your children's' maternal great-grandfather, he 
reminded me. It was mainly founded with funds donated by your 
community. Merely moaning and groaning won't help.
After attending my first Syndicate meeting, I was disgusted enough 
to write to Mahmoud Haroon on January 2, 1995: "You nominated me as 
a member of the Syndicate. I find myself sitting with certain 
members the working of whose minds I am unable to fathom."
It had just been discovered, after their having completed their 
finals, that two students had gained entry on forged certificates. 
Nevertheless, the Senate wished to give them their degree 
certificates. How can this be done, I asked? Simple, I was told. By 
a Syndicate majority vote which included that of the vice-
That same day, Mahmood Haroon wrote to the then VC forbidding him 
to issue the degree certificates. Matter ended.
We jump to April 27, 1997, and to what was written in this 
newspaper under the heading 'Academic Fraud.'
"Every institution of this country has been well and truly 
mutilated, subverted, or snuffed out. Can we not at least start 
cleaning up and curing those institutions that educate and heal?
"Willy-nilly, whether they be discredited politicians, seat-
warmers, favoured friends, army generals, strongmen or shrinking 
violets our governors are the chancellors of the universities of 
their provinces. They dole out honorary doctorates to undeserving 
friends, and preside over the ceremonies looking highly incongruous 
and their predecessors' mortar boards. On the whole they are 
ineffective and do little good.
"The one right thing done by chancellor Kamal Azfar was to appoint, 
entirely on merit, Engineer Abul Kalam, as vice-chancellor of the 
Nadirshaw Eduljee Dinshaw University of Engineering and Technology. 
On taking over in December 1996, Kalam found on his table the case 
of 64 students who had been fraudulently passed. He asked the 
chancellor to hold an inquiry. The chancellor then did wrong in 
appointing me, a member of the NED Syndicate, to inquire into the 
affair, later compounding it by having a message passed to Kalam 
via another member of the Syndicate asking him to pour water over 
the findings, whatever they be....
"Now, the chancellor is our new governor, Lt-General Moinuddin 
Haider, reputed to be a strong man. He is pondering over the 
Believe it or not, the affair of the 64 students has still not been 
resolved. Four days ago, on December 23, I wrote to the same 
chancellor: "By a process of manipulation, the majority of the NED 
Syndicate members have managed to resolve that degree certificates 
be issued to those fraudulently passed. The vice-chancellor and the 
minority (which includes me) do not wish to be a party to the 
fraud..." High time he fired his gun.
The good news is that Kalam still arrives at his desk each morning 
at 0825 and has ensured that his faculty members do the same, and 
that they also do some work, which, after years of indiscipline, 
they are loathe to do. A semblance of order has been restored and 

disruptors are sternly dealt with. In the face of tremendous 
political pressure, the Dawood College of Engineering and 
Technology, which was nationalized by Bhutto (to get at the 
industrialist Dawoods more than for any other reason) has just been 
disaffiliated by the NED, as it neither followed university rules 
nor discipline. Unqualified students were being enrolled on payment 
of Rs 2 lakhs per head to the college administrators. It has been 
so far estimated that Rs 20 crores have slid into the pockets of 
these functionaries.
For the Texan Nedian: This is how matters stand. If fraud and 
corruption can be curbed, we can rebuild.

Accountability in action 
Irfan Husain

I HAVE just received a brief taste of the embarrassment our leaders 
cause expatriate Pakistanis by their endless corruption and puerile 
behaviour: while on a brief visit to England, I have already come 
across two damning reports against Nawaz Sharif and Benazir Bhutto 
in the mainstream press.
First the Sunday Telegraph carried a story about our prime minister 
running amok at Harrods: apart from a 5,000 pounds bed and 
thousands of pounds spent on linen and other goodies, the reporter 
painted a very funny picture of Nawaz Sharif's security guards 
being unable to keep up as the PM shopped as though there were no 
tomorrow. The article included a comparison of Third World leaders 
who had been shopping recently at Harrods: Pakistanis will be 
pleased to learn that the Mian from Model Town topped the list for 
conspicuous and vulgar consumption. All this, of course, at a time 
when we are being asked to tighten our belts to face the foreign 
exchange crisis that confronts us. Mr Sharif has made a number of 
requests to his businessmen colleagues to shell out a few million 
dollars each out of their overseas accounts to see us through. He 
would have been a little more credible had he made a significant 
donation himself instead of going on a shopping spree in London.
A few days after this sarcastic news item appeared, the Times 
carried a piece on Asif Zardari's and Benazir Bhutto's estate in 
Surrey. It was alleged that neighbours had seen her at the famous 
property, and details about the extensive lands and the cost of the 
property were printed. Actually, at no point has the former prime 
minister flatly denied that she owns the estate, equivocating by 
asking why she could not buy property in England if Nawaz Sharif 
could own several flats in Central London. This lame argument has 
not gone down well either in Pakistan or in England. Neither leader 
has grasped the fact that people in England are most unimpressed by 
such a vulgar display of wealth. When Arab sheikhlets flaunt their 
unearned petro-dollars, most people laugh at them while relieving 
them of their money. BB and Nawaz Sharif have placed themselves in 
this category.

Against this backdrop of the usual sleaze in high places in 
Pakistan, the recent revelations and resignations in the British 
cabinet provided refreshing counterpoint. Here was Peter Mandelson, 
the second most powerful man in Britain, resigning because he had 
taken a loan to buy a house from a colleague before the Labour 
Party swept to power. The loan itself was perfectly legal; what was 
deemed improper was the fact that he had not informed Tony Blair of 
the transaction. Also, as Mandelson's ministry was investigating 
Geoffrey Robinson, the minister who had lent him the money, there 
was a potential conflict of interest. In the event, both ministers 
resigned as soon as the story appeared in the press just before 
In Pakistan, we have a sitting prime minister against whom there 
are billions in defaulted loans and unpaid taxes. According to his 
tax returns filed with the Election Commission, and quoted by 
Aitzaz Ahsan on the floor of the Senate, he paid under Rs 500 as 
income tax in three years. Then we have Benazir Bhutto, the ex-PM, 
who, together with her husband, is alleged to have salted away 
millions of dollars abroad; the Swiss magistrate investigating her 
questionable dealings with Cotecna and SGS, two Swiss firms, has 
detailed her and her husband's extensive foreign holdings. To go 
back even further in time, we have Ijazul Haq, the late dictator's 
son, who is mysteriously well-heeled despite Zia's relatively 
modest official income.
I suppose one could go on and on about the strongly suspected and 
often alleged chicanery and corruption in high places, but the 
contrast I am trying to make here is between the thick skin of our 
politicians, and the prompt accountability that underpins democracy 
in developed nations like Britain. This is not to suggest that 
corruption is totally absent in Whitehall; far from it. But when 
somebody is caught with his hand in the till, the chances are that 
the whistle will be blown, and heads will roll.
In Pakistan, the press continues to expose crooks in high places 
day in and day out, but to little avail. When these revelations 
reached a certain critical mass, the Establishment  comprising 
GHQ, the presidency and our shadowy and powerful intelligence 
agencies  used these news reports, columns and editorials to throw 
out the government of the day, replace it with an interim 
arrangement and then tried to manipulate the elections. Now, of 
course, this is no longer an option, thanks to the constitutional 
changes introduced by Mr Nawaz Sharif to protect his government.
But at no point has any politician in power paid any heed to 
allegations of sleaze made by the press. This refusal to clean up 
their act has cost several governments heavily, but this ostrich-
like approach remains ingrained in the psyche of our rulers. They 
really believe that they were elected to enrich themselves, and any 
suggestion that they have a responsibility that goes beyond adding 
to their personal account is rejected as sour grapes from the 
opposition-inspired press. For these people, democracy is about one 

thing, and one thing only: con the people to vote your party to 
power and then cling on to amass as much money as possible.
Under these circumstances, it is difficult to see when genuine 
accountability will take root in Pakistan. Until that day arrives, 
I suppose we will just have to make do with Saifur Rahman's 
inefficient and one-sided version. 

Saeed Anwar 4th in world rankings

LAHORE, Dec 30: Two Pakistani batsmen and three bowlers have been 
included among top 15 in the Price Waterhouse Coopers rating list 
of Test cricketers issued on Wednesday.
Pakistan's Test opener Saeed Anwar, with 781 points, has been rated 
fourth and middle-order batsman Ijaz Ahmad Senior, with 675 points, 
14th in the list. Inzamam-ul-Haq, having 638 points, is rated 21st 
while Aamir Sohail, with 611 points, is rated 28th along with 
Ramparkash (England).
Sachin Tendulkar of India, with a tally of 822 points, tops the 
list of batsmen while Steve Waugh of Australia, with 819 points, is 
at No 2 spot among the batsmen of the world.
Waqar Younis of Pakistan, having a tally of 713 points, has been 
rated eighth among the bowlers while Wasim Akram, with 704 points, 
is rated 10th and Mushtaq Ahmad, having 662 points, is rated 15th. 
Saqlain Mushtaq, with 517 points, is rated 28th among the bowlers.
Allan Donald of South Africa, with a tally of 885 points, tops the 
list of bowlers while Curtly Ambrose of the West Indies is second, 
having a tally of 881 points.
Pakistan to take part in games for disabled

LAHORE, Dec 29: A 15-member Pakistan contingent will take part in 
six different events of the seventh Far East and South Pacific 
Games for Disabled to be held at Bangkok (Thailand) from Jan 10 to 
The contingent will leave for Bangkok on Jan 8.
To prepare the players for the competition, training camps are in 
progress at the Pakistan Society for the Rehabilitation of the 
Disabled centre since September.
Pakistan had taken part in the 1989 and 1994 editions of the games 
which were held in Japan and China, respectively.
Pakistan will compete in the events of badminton, table tennis, 
javelin throw, discuss throw, powerlifting and wheelchair races.

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