------------------------------------------------------------------- DAWN WIRE SERVICE ------------------------------------------------------------------- Week Ending : 16 January 1999 Issue : 05/03 -------------------------------------------------------------------
Contents | National News | Business & Economy | Editorials & Features | Sports
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CONTENTS ===================================================================
NATIONAL NEWS + IMF offers $575m in cash to Pakistan + IPPs-EB deal on rate cut: WAPDA chief has objections + Powers of Sindh speaker, deputy speaker restored + Bid to improve performance: PIA to hire services of US company + National Assembly adopts motion amid protest + Pakistan Railways introduces computerized reservation system + NWFP gets Rs 961m through direct taxes + Bar leaders object to Nawaz's letter + Government bypassing SC order: Muttahida + Education policy: Action plan for implementation prepared --------------------------------- BUSINESS & ECONOMY + LC charges may come down: IMF loan to spur foreign trade + Private sector credit surges to Rs42 billion + Foreign gas producers to curtail output + Drastic cut in number of taxes proposed + Electricity export: Team for Delhi next month + CBR focus shifts to unregistered ST assessees + State Bank suffers Rs13.8bn loss on exchange risk cover + 22,000 new wealth tax-payers identified + Export earnings decline by 12.4pc + KSE-100 share index recovers 3.63 points --------------------------------------- EDITORIALS & FEATURES + 'Pity Pakistan' Ardeshir Cowasjee + What scares away investors Irfan Husain ----------- SPORTS + Team gets go-ahead for India Test series + Pakistan Open squash to a Super Series event + Pakistan finish 4th in Calcutta karate

IMF offers $575m in cash to Pakistan 
Shaheen Sehbai

WASHINGTON, Jan 15: The IMF Executive Board restored Pakistan's 
suspended ESAF programme on Friday morning (Pakistan time) and 
offered Islamabad 575 million dollars of immediately available cash 
-500 million on hard, almost commercial market, terms and 75 
million on the soft terms of ESAF.
After over four hours of deliberations at the meeting which began 
at 4pm Washington time and ended at 8.10pm, the IMF announced that 
Pakistan will get 500 million dollars from a little-used window, 
called Compensatory Contingency Finance Facility (CCFF), to meet 
the shortfall in its exports because of fall in cotton exports, 
mainly to troubled East Asian markets.
"This is hard money, on commercial terms," a senior IMF executive 
involved with the Pakistan case told Dawn on Friday morning.
Another experienced international banker and economic specialist 
said the IMF had practically told the Pakistan government to go 
back and show some performance before claiming the bulk of the ESAF 
soft money, of which just a bare minimum was offered by the Fund on 
The exact figures announced by the IMF show that Pakistan will get 
352.7 million SDRs for the CCFF, 37.91 million SDRs from ESAF and 
18.97 million SDRs from EFF. (One SDR is equal to US $1.40727).
IMF officials explained to Dawn that the facility which Pakistan 
will utilise to get 500 million dollars was established in 1988. 
Under the CCFF, the IMF continues to assist members experiencing 
temporary shortfalls in export earnings and service receipts on an 
optional basis.
The CCFF also includes a feature, introduced in 1988, called the 
"external contingency mechanism" that gives members that have 
entered into adjustment programmes supported by the IMF the 
opportunity to protect themselves from unexpected external 
disruptions, such as sudden movements in export earnings and import 
prices, and unexpected increases in international interest rates.
"The amounts of financing available to a member under the CCFF are 
30 per cent of quota each on account of the export shortfall and 
the external contingency elements, and 15 per cent of quota for the 
cereal import cost element. In addition, members may choose to 
apply an "optional tranche" of 20 per cent of quota to supplement 
any of the three elements. The access level of 65 per cent of quota 
applies for financing of either export shortfalls or cereal import 
costs (or both) in cases where the member's balance of payments 
difficulties are due only to the effects of an export shortfall or 
an excess in cereal import coststhat is, when there is no need for 
adjustment policies.
"Otherwise, there are various lower sublimits for access, depending 
on the extent of cooperation by the member with the IMF in solving 
its balance of payments difficulties," the official explained.
They said the compensatory financing element of the CCFF provides 
financial assistance to members experiencing, for reasons beyond 
their control, balance of payments difficulties resulting from 
temporary declines in commodity export earnings below their medium-
term trends. Compensatory financing is available to all members; 
however, its beneficiaries tend to be exporters of primary products 
whose export earnings are especially susceptible to temporary 
cyclical fluctuations in price, changes in demand, and changes in 
output owing to exogenous factors, such as adverse weather and pest 
The export shortfall is calculated as the amount by which export 
earnings in the shortfall year are below the geometric average of 
export earnings for a five-year period centred on the shortfall 
A member is required to submit a request for compensatory financing 
not later than six months after the end of the shortfall or excess 
The contingency financing element of the CCFF aims to improve the 
prospects that adjustment programmes can be kept on track in the 
face of adverse exogenous developments by means of an appropriate 
blend of additional financing and adjustment, IMF officials said.
Contingency mechanisms are attached to IMF arrangements, and 
financing is provided to cover part of the net effect on a member's 
external current account of unanticipated changes in key external 
variables that are highly volatile and can be easily identified.
The variables covered include export earnings, import prices, and 
interest rates. Variables such as workers' remittances and tourism 
receipts are also covered if they are important elements in the 
member's current account.
In the case of Pakistan the shortfall caused by decline in cotton 
and cotton-based exports made Pakistan eligible for the CCFF, 
experts said.

IPPs-EB deal on rate cut: WAPDA chief has objections 
Ansar Abbasi

ISLAMABAD, Jan 15: The WAPDA chairman will move a summary for the 
prime minister, conveying his objections over the agreement reached 
on tariff reduction between five IPPs and the Ehtesab Bureau.
Minister for Water and Power Gohar Ayub Khan told reporters here on 
Friday that the WAPDA chairman had conveyed to him his reservations 
over the agreement and had stated that he was drafting a summary 
for the prime minister to inform him about his objections on the 
The summary for the prime minister will be routed through the 
ministry of water and power.
"The chairman wants that his report and the agreement should be 
placed before the cabinet and the economic coordination committee 
(ECC) for consideration," the minister said and added, "it is 
believed that the agreement will further increase the financial 
burden on WAPDA."
The ministry of water and power on last Saturday, reportedly 
following pressure from Ehtesab Bureau, had withdrawn in writing 
its objections to the agreement but the WAPDA chief, according to 
official sources, had refused to go along without taking the matter 
before the competent forums.
Mr Khan also confirmed that the chairman did not want to sign the 
agreement as WAPDA had done in the case of Hubco while revising its 
contracts during Benazir government. "Today if we sign any 
agreement under pressure, tomorrow our fate will be similar to 
those who had signed the controversial contract with Hubco."
The minister said, at least WAPDA's view point should come on the 
With regard to WAPDA's recovery campaign, the minister disclosed 
that troops had been deployed in the authority and military courts 
were being established. "After Eid the campaign to recover 
outstanding dues and to check line losses, will be launched with 
full force."
The minister said the government did not want to fill jails with 
defaulters but would definitely take firm action where deamed 
necessary. The courts, according to the minister, would have the 
authority to impose fine or give jail term to any offender.
The minister said that the provincial governments owe Rs31 billion 
to WAPDA but they were not clearing their arrears despite the prime 
minister's personal intervention. Khan said the prime minister had 
asked the provinces to pay 75 per cent of WAPDA's actual billing 
but it was not being done.
He admitted that WAPDA had been overbilling the provinces but 
agreed that the matter could be reconciled.

Powers of Sindh speaker, deputy speaker restored 
Bureau Report

ISLAMABAD, Jan 12: The Supreme Court on Tuesday restored the powers 
of the speaker and the  deputy speaker of the Sindh Assembly which 
were taken away by the federal government a few days after the 
imposition of governor's rule on  Sindh, and held that "the power 
of the provincial assembly shall not be restricted to make any law 
under the Constitution."
The seven-member bench, headed by Chief Justice Ajmal Mian, decided 
two petitions filed by Jalal Mehmood Shah, deputy speaker of the 
Sindh Assembly, and Nawab Mirza, ex-speaker of the provincial 
When the petitions were filed challenging the imposition of 
governor's rule and the suspension of powers of the speaker and 
deputy speaker, the court had observed that the federal government 
was empowered to impose governor's rule under Article 232 of the 
However, the court heard the petitions to the extent of suspension 
of the powers of the speaker and deputy speaker.
The bench, in its unanimous short order, stated that the federal 
government could assume the powers vested in or exercisable by 
anybody or authority in the province other than the provincial 
assembly during the imposition of governor's rule. 
The apex court further stated that "incidental" and "consequential" 
orders could be passed by the federal government regarding those 
bodies and institutions whose powers had been assumed, and not 
regarding the provincial assembly which was empowered under Article 
232(c) to make laws even during the imposition of governor's rule.
The court held that during the imposition of governor's rule, under 
Article 232 of the Constitution, the powers of the provincial 
assembly shall not be restricted to make any law.
"Resultantly, the order of 10.11.98 to the extent indicated above 
is declared to be without lawful authority and of no legal effect."
During the hearing of the petitions the attorney-general for 
Pakistan, who represented the federal government, had argued that 
the provincial assembly was "intact" but "non-functional". Counsel 
for the Sindh governor had stated that the provincial assembly was 
intact but could not be allowed to meet due to "practical 
"The order of SC is victory for the constitutional democratic norms 
and promotes the representative institutions of the federating 
units," said Akram Sheikh, prominent lawyer and former president of 
the Supreme Court Bar Association of Pakistan.
On Nov 10 the federal government had suspended the powers and 
functions of the speaker and deputy speaker of the Sindh Assembly.
Bid to improve performance: PIA to hire services of US company  
Bureau Report

ISLAMABAD, Jan 12: Pakistan International Airlines (PIA) has 
decided to "out source" its information technology system by hiring 
the services of an American company to improve the performance of 
the organization.
"The services of the SABRE company of the United States are being 
hired to provide us with state-of-the-art software and hardware 
system with a view to improving our entire information system", 
said PIA chairman Shahid Khaqan Abbasi.
He told Dawn here on Monday that PIA would save a lot of money by 
not buying new information technology system. "In fact we will 
avoid a lot of expenditure by getting the services of SABRE", he 

Mr Abbasi said the PIA was acquiring 6 to 8 new planes at a cost of 
$600 million to $800 million. These planes would be bought by PIA 
from its own budget without seeking any funding from the federal 
However, he said the fleet replacement committee of the board of 
directors of the PIA would decide whether to purchase or get these 
planes on lease. "But most probably we will get them on lease 
because of being more economical". Anyway, the decision was that 
the planes to be acquired by PIA would be entirely new, he stated.
Giving details, he said that three types of planes were being 
considered which included 747-400, Boeing 777-200 and Airbus A-340. 
The replacement committee, he pointed out, would decide within the 
next 6 to 8 weeks time as to which planes should be purchased.
He said that six of the 747-200 planes currently being used by the 
PIA would be sold over during the next two years. There were a 
total of 47 planes currently under use of PIA. Replying to a 
question he said the new terminal of Lahore airport would be 
completed next year. As regards the new terminal of Islamabad 
Airport, it would be constructed on the basis of Build, Operate and 
Transfer(BOT).     He said because of expansion programme of PIA, a 
number of new foreign airlines had decided to operate from various 
cities of Pakistan.
To a question he said that 3,500 employees have left PIA either 
through mandatory retirement or by golden handshake for which PIA 
had paid Rs2.4 billion. "But we did not do any injustice to anyone 
and that is why there is no single case pending against us". He 
said that now there were 17,000 employees working in PIA.
Asked whether the PIA was opening new foreign routes, Mr Abbasi 
said that Melbourne, Hong Kong and Johannesburg were expected to be 
the three new destinations for which negotiations were being 
He also informed that the government has no plan to completely 
privatize PIA. Some of the non core activities, he continued, 
would, however, be disinvested. These are likely to include 
catering, duty free shops and a couple of other ground facilities. 
"Complete privatization of PIA involves security issues," he said 
in response to a question.
He said that the organization suffered a loss of Rs4.5 billion 
during 1996-97, while Rs700 million were earned as part of the 
profit during 1997-98.

National Assembly adopts motion amid protest 

ISLAMABAD, Jan 13: The National Assembly amid protests and walkout 
by the combined opposition and independent members adopted on 
Wednesday a motion for convening a joint sitting of parliament to 
pass eight outstanding bills.
These bills had been passed by the National Assembly but not yet by 
the Senate.
As the Speaker, Illahi Bakhsh Soomro put the motion to vote after 
the debate was summed up by the mover, parliamentary affairs 
minister Yasin Khan Wattoo the opposition MNAs, led by ANP 
parliamentary leader Asfandyar Wali Khan, rose up from their seats 
decrying the motion.
By the time the speaker put the motion before the House, the 
combined opposition as well as the independent MNAs had gone out of 
the house. So the response was only in favour of the motion.
Earlier the parliamentary affairs minister, summing up the debate 
on the motion, refuted the assertion of the opposition that the 
government was trying to decrease the powers of the Senate. He said 
no government could curtail the power of the Senate without making 
amendment in the Constitution.
Mr Wattoo said the government did not want to reduce the powers of 
the Senate under any circumstances. It was justified in convening 
the joint sitting of the parliament for legislation, said the 
Wattoo said the government could take up this matter even under 
Article 256 which says "when any act or thing is required by the 
Constitution to be done within a particular period and it is not 
done within that period, the doing of the act or thing shall not be 
invalid or otherwise ineffective by reason only that it isn't done 
within that period."
The minister maintained that it was for the first time that the 
Constitutional provision relating to the motion for calling the 
joint sitting of the parliament was being invoked.
He said as such the objections raised by the opposition were based 
on misunderstanding.
Wattoo was of the view that it was merely a misconception that only 
Senate had the powers to pass a bill. He said such assertions were 
tantamount to make mountain out of molehill. He did not agree with 
the argument that these bills were not brought on the agenda of the 
He explained the legislative procedure and mode of passing the 
bills under Article 70.
Wattoo maintained that there was no mala fide intention on the part 
of the government for bypassing the Senate. He wondered as to why 
the opposition members were allergic to the joint sitting of the 
parliament which was participated by both members of the lower as 
well as the upper houses.
He further dilated that in the joint sitting no bill could be 
passed by less than 153 votes. Wattoo added that despite 
overwhelming majority in the National Assembly, the total number of 
the PML members in both the houses were 135. He said according to 
the Constitution no bill could be passed without the members from 
the smaller provinces in the joint sitting.
Pakistan Railways introduces computerized reservation system

KARACHI, Jan 13: The Pakistan Railways on Wednesday made the first 
computerized reservation on Karachi Express for the Karachi-Lahore 
route, commencing from Jan 28.
The computerized ticket on Karachi Express (up and down) Lower 
A.C., which was booked from the passenger reservation office at the 
City Station on Wednesday, is to be made available on paper, rather 
than card, with the computer reservation number and fare to appear 
on the right hand corner of the page.
In a new feature, the computerized ticket would cover all the 
members of the group travelling together, with names and national 
identity card (NIC) numbers to be displayed prominently on one 
single sheet of paper.
The computerized booking, which has been introduced on Karachi 
Express on experimental basis, is to be gradually introduced to all 
other trains leaving from Cantt station.
Regional manager passenger, Asrar Ahmed Alvi, told Dawn that the 
computerised ticket issued on Wednesday clearly states the amount 
charged from the passenger so that it cannot be defaced and resold 
by "professionals" at a higher price.
Furthermore, he said, the plan to include all members of the 
travelling group on one ticket together with NIC numbers was meant 
to end hoarding, overcharging and blackmailing, which had become 
common outside the railway stations.
In this regard, the Khidmat Committee, led by SDM Civil Lines, 
conducted a raid on Khattak hotel on Wednesday evening where they 
seized 708 tickets for Jan 14-18 which had been bought by a five-
member gang, acting in collaboration with the railway agencies.
An FIR 11/99 has been lodged against the group under Section 114 of 
the Railway Act while the search is on for the owner of the hotel.
According to the SDM, Samiuddin Siddiqi, the tickets have become 
case property.
NWFP gets Rs 961m through direct taxes
Bureau Report

PESHAWAR, Jan 13: The total collection on account of direct taxes 
in the NWFP at the close of the first six months of the current 
financial year (till December 31) were Rs.961 million, a record 
increase of Rs.134 million over the collections made in the same 
period of the 1997-98 financial year, sources told Dawn here on 
The total of Rs.961 million in the July-December period of the 
current financial year formed 43 per cent of Rs. 2100 million 
target set for the 1998-99 financial year, according to the 
The Peshawar zone of income tax deals with collections of direct 
taxes in the NWFP whereas the Companies Zone deals with the 
At the close of the first six months of the last financial year, 
i.e. July 1997 to December 1997, recoveries under the heads of 
direct taxes including income tax, wealth tax and capital value tax 
was Rs.827 million.
"The collection in the current year was made possible due to 
special recovery week observed by the income tax, Peshawar-zone, in 
the month of December," said a well placed official.
During the special week of recovery the authorities recorded cash 
recoveries of Rs.9 million as against Rs.5.3 million in December 
1997, said the official. The official circles attached extra 
significance to the higher recoveries in July-December in spite of 
unfavourable economic conditions.
Likewise, said the sources, collections under section 50(4) 
pertaining to recovery of tax on supplies and contracts of 
developments had also recorded sharp decline.
"As the provincial government came up with least spending on the 
development schemes during the first six months of the current 
financial year collections under 50(4), which normally provides 
handsome amount of taxes, recorded a new low," maintained an 
official of the tax department, adding that "extra ordinary 
administrative measures taken by the income tax commissioner 
Liaquat Ali Khan made it possible to record improvements in the 
overall recoveries".

Bar leaders object to Nawaz's letter

LAHORE, Jan 12: Bar leaders have criticized the reading out of the 
prime minister's letter before the Supreme Court on Monday as an 
attempt to unduly influence the proceedings on constitutional 
petitions challenging the creation of military courts.
Pakistan Bar Council executive chairman Chaudhry Ashraf Wahla said 
it was highly improper for the AG to try to substitute a letter 
from the chief executive for arguments. He said information, if 
any, contained in the letter could have been placed before the apex 
court otherwise than in the form of what looked like a 'message' 
from the PM. He cited the emergency case proceedings to emphasise 
that classified intelligence reports could have been shown to the 
judges if the purpose was to explain the government's position.
Pakistan Bar Council member Hamid Khan said it is not clear from 
Press reports whether the letter was addressed to the judges or to 
the attorney-general. In either case, its recitation in the court 
was improper and unwarranted. The PM cannot write to the court on a 
matter pending before it. His communication or instructions to the 
AG were privileged and confidential and could not be used to 
influence the proceedings.
Pakistan Bar Council human rights committee chairman Rana Ijaz 
Ahmad Khan described the AG's act as a crude attempt to overawe the 
court. He said it is no part of advocacy to read out letters from 
the chief executive. Every case stands on its merits and letters 
are no substitute for arguments. If this is allowed to become an 
acceptable norm and an established practice, there will be no end 
to it. Some executive action or omission is invariably involved in 
writ petitions and the law officers would come out with the 
provincial or federal chief executive's letters or messages on the 
point at issue in every case.
Rana Ijaz said a proper way for the attorney-general was to request 
the court to hear Prime Minister Nawaz Sharif in person so that he 
could be examined by it and cross-examined by the petitioners. In 
the present case, the PM has actually made a statement in the court 
without taking oath and risking cross- examination. He said the 
letter should not be taken into consideration or the prime minister 
be called to affirm its contents on oath. The PBC member said the 
PM has rendered himself liable to contempt of court proceedings by 
allowing the AG to read out his letter in the court.

Government bypassing Supreme Court order: Muttahida

KARACHI, Jan 15: Muttahida Qaumi Movement in a letter addressed to 
the President, the Chief of Army Staff and the Chief Justice of 
Pakistan has demanded action against all those who had been 
allegedly involved in the "killing" of Fasih Ahmed, Mubashir Ali, 
Israr Ahmed and Mohammad Anwar.
The letter, signed by MQM Senators Aftab Sheikh and Nasreen Jalil, 
accused the government of resorting to extra-judicial killings to 
bypass the Supreme Court's restraint on execution of death 
sentences by the military trial courts.
"Our fears are gaining strength with the contents of the letter 
addressed by prime minister to the Supreme Court and the attorney 
general's threatening remarks to the superior courts," they said.
Giving details of the death of MQM activist Mohammad Anwar, who 
died in police custody on Thursday, the MQM senators said Anwar's 
death in custody was the second since the court stayed execution 
order of the MTC, third since the imposition of Governor's rule and 
fourth since the murder of Hakim Said.
According to eye witnesses, they said, Anwar was picked up by 
police on Wednesday evening at NIPA roundabout, and the police 
brought his body to the JPMC on Thursday morning.
The MQM senators claimed that the body of Anwar bore various 
torture marks which amply nullified police officials' claims that 
Anwar had received those injuries when he fell off his bike on a 
slippery section of a road.
Meanwhile, three activists of Muttahida were apprehended by the 
police last night.
According to reports, police surrounded a house near Khajji ground 
and arrested Saeed alias Nizami, Saleem and Aqeel.
Two Kalashnikovs, eight revolvers and 200 rounds were recovered 
from them, reports said.
Police have said that Saeed Nizami belonged to Muttahida and is 
involved in the murder of three policemen and five other persons.
The Muttahida Qaumi Movement Coordination Committee in a press 
release alleged that the Mehmoodabad Police raided the house of the 
sector Incharge of the area, and failing to arrest him, they 
arrested his younger brother, Jehangir, and threatened the family 
members that if the sector incharge was not handed over to them, 
all the family members would be arrested.
The press release also alleged that police officials last night 
raided different areas in Liaquatabad and Nazimabad and arrested 
Hameed, Shahid, Naseer and three brothers, Sajid, Aamir, Masood 
belonging to unit 164 and their father, Gahyyur Ahmad.
The police also hauled up Yamin, Zamir and Nizamuddin of Unit 86.
Another police party raided the house of one of the MQM members in 
Korangi Sector and the adjacent house of his sister and took away 
with them valuable articles and furniture in a Suzuki when his 
brother-in-law tried to question them, the press release alleged.

Education policy: Action plan for implementation prepared

ISLAMABAD, Jan 10: The ministry of education, at last has come up 
with an action plan for the implementation of the much-trumpeted 
National Education Policy (1998-2010), official sources said.
The new plan, a copy of which was made available to this scribe, 
covers the targets exclusively set in the policy for the year 1998-
The new education policy was announced by Prime Minister Nawaz 
Sharif on March 27, 1997.
The new plan envisages 20 per cent more physical facilities and 
services to universalize the primary education in the county. 
Legislations would be prepared and approved to introduce compulsory 
education in the provinces. According to the plan 2,800 schools 
would be upgraded and 1,500 additional teachers would be recruited.
About 1,200 new schools would be established and 10,000 additional 
teachers would be recruited during 1998-99; legislation to regulate 
private schools would be prepared; 5 per cent schools would be 
converted into model schools; and curricula for grade VIII would be 
Specialized training programme would be developed and launched for 
teachers and managers. Law would also be promulgated and 
implemented for teacher education in the same financial year.
The new plan envisages setting up of 18 new polytechnic, 16 
vocational, and 8 commercial institutes during the current 
financial year. For the establishment of National Council for 
Technical Education, laws would be promulgated.
In order to strengthen the linkage of institutions with the 
industry, management committees should be made operational. To 
encourage private sector for the establishment of TVE institution, 
provision of fund to education foundation as grants/soft loans 
would be ensured.
New technologies would be identified and introduced as courses in 
the existing polytechnic institutions. the plan says.
To introduce compulsory computer education in the TVE institute, 
computer courses would be offered to 20 per cent students.
The plan says to introduce metric technical stream, 20 per cent 
laboratories/workshops would be established, and to upward mobility 
of TVE graduates, development of curriculum and required 
infrastructure would be made available during the current year.
For the start of B.Ed (tech), curriculum and teaching material 
would be developed and training of master trainers would be 
HIGHER EDUCATION: During 1998-99, one medical college and a general 
college would be upgraded to university level to improve the access 
to higher education and increase the enrolment by 5 per cent, 40 
scholarships would be awarded to split PhD programmes.
Under the new plan 3 new universities (both public and private) 
would be established. Similarly, it has been planned that 5 science 
colleges and 2 professional colleges would also be set up in the 
country this year.
Preliminary work has been started on the prime minister development 
PROMOTION OF INFO-TECH IN EDUCATION: To promote computer literacy 
for educational planners, training material, logistics and 
programmes would be developed and launched this year. Preparation 
of curricula relating to computer would be initiated at all levels. 
While conceptual design has been completed for the establishment of 
cyber institute at Islamabad.
According to the plan computer labs would be acquired for training 
of teachers in 100 schools and satellite would be launched for the 
use of mass education.
In order to provide library and documentation service, 260 mobile 
library each for 50,000 population would be established throughout 
the country and a public library would also be made a model 
PRIVATE SECTOR IN EDUCATION: Regulatory bodies would be constituted 
and the curricula of the private institutions would be made 
conformed to the Education Act, 1976.
Incentives would be given to the private sector for providing 
educational facilities in rural areas.
These institutions would be provided matching grants and land, 
negotiation for foreign aid and exemption of fee to those working 
on non-profit basis.
A law would be promulgated to accept 10 per cent poor and talented 
students in private institutions.
Education card for getting funds through Zakat etc, would be 
provided to 20 per cent deserving students at all levels during 
For the utilization of Pakistani talent abroad five scientists 
would visit Pakistan.
The bill of National Education Testing Service (NETS) would be 
approved by the parliament and the operation has already been 
started in Punjab and NWFP.
Regarding the incentives to teachers, the plan says "the best 
teacher of the tehsil" certificate with Rs500 cash award, "the best 
teacher of the district" certificate with Rs1,000 cash award, the 
"best teacher of the division" certificate with Rs15,000 cash award 
would be given to the teachers.
The plan also envisages declaring of best teacher at provincial 
level and arranging conference at district and tehsil levels.
MONITORING & EVALUATION: For the establishment of Pakistan 
Education Service Cadre, the prime minister would issue executive 
Federal monitoring and evaluation committee would be constituted, 
legislation for private schools and school management committee 
would also be set up at village level and census for education 
would also be conducted during the current financial year.

LC charges may come down: IMF loan to spur foreign trade


KARACHI, Jan 15: Pakistan's foreign trade is likely to be an 
immediate beneficiary from the approval of IMF loan package, 
bankers said on Friday.
"There will be more trade lines to facilitate opening of letters of 
credit which may improve the depressed imports", bankers said. They 
further said that LC confirmation charges might also come down as 
forex reserves position will improve after the release of IMF loan.
Pakistan's imports are continuously falling since last July as 
banks are hesitant to open letter of credits while their 
confirmation charges have gone up to 8 per cent due to country's 
fragile reserves position. Importers are also required to submit 30 
per cent cash margins before opening L/Cs which is subsequently 
reduced to 20 per cent.
The International Monetary Fund on Thursday approved $575 million 
disbursement for Pakistan.
Pakistan imported $4.39 billion goods for July-December (1998-
1999), down by over 19 per cent compared to same period last year.
But experts say this build-up in reserves might be temporary as 
government has to clear huge debt arrears of various lenders. "This 
is more or less a book entry as most part of this money will go in 
the payments of debt arrears", says a former top official of the 
ministry of finance.
Government is under severe pressure by various private sector 
creditors to clear their dues, which according to reports touched 
about $1.5 billion mark.
Financial analysts say IMF funding will improve the Pakistan's 
outlook in the international financial market, but in the short-run 
the doors for commercial borrowing will remain closed.
"Pakistan may go to these markets after the debt rescheduling 
process is completed", says a foreign banker. "The terms and 
conditions of the rescheduling will determine the cost of future 
borrowing", he added.
Pakistan is in the process of rescheduling of about $3.5 billion 
external debt from the Paris Club of creditors. The amount of 
private sector's commercial debt to be rescheduled at the London 
Club is not known.
Stock analysts, however, were of the opinion that impact on the 
market will be mildly positive. "There is no excess cash in the 
market as most of the leading stocks are overbought", said a stock 
He said there is no chance of immediate lifting of the capital 
controls unless reserves reached to a comfortable position." I 
don't think foreign funds will be allowed to repatriate their 
stuck-up funds unless reserves touch $2 billion mark", he said.
Foreign portfolio investors want to remit over $60 million share 
proceeds and dividends from Pakistan, which are not allowed due to 
capital controls imposed after May nuclear explosion.

Private sector credit surges to Rs42 billion
Mohiuddin Aazim

KARACHI, Jan 15: Banks and development financial institutions lent 
a little more than Rs42 billion to the private sector by third week 

of December out of a total allocation of Rs98 billion for the 
entire fiscal 1998-99.
Senior bankers said the private sector borrowing totalled only Rs20 
billion by third week of November adding that it rose by Rs22 
billion within a month due to increased demand from textile and 
sugar sectors. Cotton ginning and sugarcane crushing in late 
November and early December creates a cyclical demand for bank 
credit by several sub-sectors.
Business leaders say roughly Rs20 billion go to cotton sector and 
Rs5-6 billion to sugar sector each year. They say once financing to 
these two sectors is over the demand for bank credit may decline in 
the months to come. "I think part of the allocated Rs98 billion for 
the private sector may remain unutilized this year," said ex-
chairman of All-Pakistan Textile Mills Association Anwar Tata.
"The economy is passing through a slowdown. Lately banks are 
offering working capital only and no major project financing has 
been done in the last one-and-a-half years," Tata told Dawn by 
telephone. He said part of the Rs2 billion lending to private 
sector by third week of December may have gone to cement and food 
and allied industries. "Besides private sector borrowing also 
includes commercial loans."
Bankers say the disbursement of Rs42 billion by third week of 
December is higher than the Rs29 billion worth of disbursement made 
by the same period in last fiscal year. But business leaders say 
that only indicates higher demand for working capital due to 
increased cost of production. In 1997-98 the total allocation for 
private sector including public sector commercial enterprises was 
Rs82 billion which was fully utilized with the net borrowing of 
private sector at Rs64 billion. "There is a demand for working 
capital by many industries but banks have rather become extra 
conservative (in lending)," said Chairman of Pakistan Sugar Mills 
Association W. Ashraf Tabani. Talking to Dawn by telephone he said 
there had been no project financing for the last one to one and a 
half years. "This is a serious situation, it shows that the economy 
is not expanding." Tabani felt that providing working capital to 
industries amidst this backdrop was all the more important because 
it was the only way to keep the wheels of economy moving. He said 
depreciation of rupee over last one year alone has created a demand 
for more credit after leaving many industries short of working 
capital due to higher cost of production.
Senior bankers say banks have become a bit more cautious in lending 
to the private sector to keep fresh loans from falling into default 
that has slowed the credit flow to a certain extent. They say that 
the requirements of prudent lending also keep them from meeting 
funding requirements of small industries. Bankers say sometimes 
higher than allocated government borrowing makes it difficult for 
the banks to be meet fully the requirement of the private sector. 
Hence a contraction in the private sector lending.
Bankers say the government borrowing by third week of December 
crossed the mark of Rs43 billion  set for the entire fiscal year 

1998-99. They say the figure may come down after retirement of some 
of the bank loans by the government but it cannot be said safely 
that the government would not allow it to swell further by the end 
of this fiscal year.

Foreign gas producers to curtail output
Haris Anwar

KARACHI, Jan 14: Foreign gas producers have decided to cut their 
output to a minimum level from the next month due to non-payment of 
their dues by the gas distribution companies, energy sector sources 
told Dawn on Thursday.
The Sui Southern Gas Company (SSGC) may face 38 mmcf per day 
shortfall from next month as its major gas supplier Union Taxes of 
Pakistan (UTP) has sent a notice, saying that it will not be able 
to maintain its gas supplies at 150 mmcf per day from Feb 1, 
sources added.
SSGC buys over 40 per cent of its total gas form the foreign gas 
companies. Out of its total per day need of 500 mmcf, 220 mmcf is 
provided by Lasmo and Union Taxes of Pakistan.
Sources at a foreign gas company said they had not been paid for 
their gas sales to gas distribution companies since last July.
"Our total dues are over $ 150 million as monthly payments to all 
companies come to around $ 25 million", he said.
The payments to these companies were withheld due to foreign 
exchange crisis which hit the country soon after its nuclear 
explosions in May, 1998.
However, these companies were offered payments in rupees at the 
composite rate, which they refused to accept.
Sources at the one gas distribution company said they had intimated 
the ministry of petroleum that disturbed gas supplies form these 
companies would affect power and fertiliser sectors. "We would not 
be able to continue normal supplies to these consumers by next 
month " they added.

Drastic cut in number of taxes proposed

KARACHI, Jan 14: The Committee on Taxation of the Federation of 
Pakistan Chamber of Commerce and Industry (FPCCI) will propose to 
the prime minister that there may be only six taxes  three federal 
taxes (one direct and two indirect), two provincial taxes (one 
direct and one indirect) and one local tax.
According to final draft of committee on taxation, the reduction in 
number of taxes and their collecting agencies will reduce chances 
of harassment and enable to devote their time and energy to promote 
their business.
Currently businessmen deal with at least 40 government 
departments/agencies (provincial, federal and local) for paying 
their taxes.
The 16-member committee recommends that taxes on agriculture such 
as agricultural income tax, land revenue, local cess and Usher be 
merged and collected as withholding tax on major crops like cotton, 
rice, sugarcane, tobacco and wheat and collected at the time of 
procurement by the government or the factories.
The committee calls for removal of income from orchards on five 
acres of land or over from the definition of agricultural income. 
Other recommendations include:
Wealth tax be abolished as the government should encourage 
generation of wealth and their utilization for the economic 
development rather than discourage them.
Central Excise Duty (CED) should also be abolished from industries 
on which there is also a sales tax.
The capital value tax on motor vehicle and immovable property be 
abolished as it encourages evasion of tax and reduces provincial 
government's revenue.
All labour related taxes and levies such as Social Security, 
Employees Old Age Benefit, Education Cess, Workers Participation in 
Profit Tax, Professional Tax, Worker Welfare Fund be merged and a 
single levy be charged on the basis of five-year average of the 
payments made by a trading or industrial concern, enhanced by 50 
per cent and be linked with the annual turnover. The enterprise be 
subjected to post audit only.
The committee also calls for removal of Zilla Tax (Export Tax) and 
rationalization of octroi rates initially to be followed by its 
abolition ultimately.
There should be only one computerized number for an assessee for 
income tax, sales tax, wealth tax and CED instead of different 
registration number with each department.
On income tax, the draft of the committee said that due to 
depreciation of value of rupee and high inflation, the income tax 
exemption limit be raised from present Rs 40,000 to Rs 75,000 which 
should be linked with inflation rate for future.
All investments made in any export-oriented industrial undertaking, 
either for establishing new projects or for BMR of existing 
projects or in shares of industrial company should be immune from 
any enquiry as to the source of investment.
Till the time wealth tax is abolished, the present limit of wealth 
tax i.e.. one house/one shop or Rs 1.00 million be increased to Rs 
2.5 million.
Reduction of sales tax to 10 per cent from 15 per cent. However, in 
order to promote invoiced based sales, the sales tax to 
unregistered persons be levied at three per cent additional tax 
instead of one per cent presently.

Electricity export: Team for Delhi next month
Bureau Report

ISLAMABAD, Jan 14: Pakistan will send a high-powered team to New 
Delhi early next month to further negotiate and finalize an 
agreement to export 2,000 MW of surplus power to India.
"We do have surplus power which can be exported to India but I am 
trying to get a study conducted to have the full impact of the 
exercise", said the minister for water and power, Mr Gohar Ayub 
Talking to Dawn here on Wednesday, he, however, pointed out that a 
couple of issues, including that of tariffs, were still to be 
sorted out with the Indian authorities for exporting surplus 
Mr Khan said it was also to be seen whether there were real 
prospects for exporting power to India. "A number of Indian 
companies in East Punjab do not have a good track record of making 
regular payments", he said adding that the Pakistani delegation 
would discuss this issue in detail.
Responding to a question, Mr Gohar Ayub said that the IPPs were 
expected to be giving a full load to further generate surplus power 
for the purposes of exports. This power, he said, would be exported 
after finalizing all relevant details with the Indian officials.
To another question, he said his ministry was studying the notice 
given by Hubco through the Karachi Stock Exchange for not making 
adequate payments thus committing a default.
He also hinted at the possibility of serving some kind of notice to 
Hubco as well. However, he did not elaborate. "I will not like to 
comment on the issue since the matter is sub judice", he said 
adding that unless courts disposed of the issue, it would not be 
good to talk about it.
But he expressed the hope that all conflicting issues related to 
independent power producers(IPPs), including Hubco and Kapco, would 
shortly be resolved.
"I am quite optimistic that differences with Hubco will 
particularly end soon".

CBR focus shifts to unregistered ST assessees
Ikram Hoti

ISLAMABAD, Jan 12: The Central Board of Revenue has stepped up 
efforts for raising increased tax revenue from the un-registered 
sales tax assessees as its registration drive has been adversely 
affected by increase in sales tax rate from 12.5 per cent to 15 per 
cent, sources said.
The CBR has written letters to sales tax collectorates indicating 
fresh estimates and directing them to step up collection efforts 
and  not to spare any of the non-registered suppliers of the raw 
materials to the registered ST assessees, and to collect the one 
per cent extra ST from them, as per the CBR notification.
A notification issued in August 1998 directed all the non-
registered suppliers to pay one per cent extra ST for not getting 
registered. Under the ST rate of 12.5 per cent they were to pay 
13.5 per cent, while under the increased ST rate of 15 per cent 
they are bound to pay 16 per cent on making supplies.
The CBR has now set an estimate of Rs 2 billion to collect from the 
non-registered suppliers. This money would practically be in lieu 
of the Retail Tax which was estimated at Rs 2.2 billion for 98-99. 
The retailers have not responded as expected. Out of roughly 
estimated about 39,000 retailers with annual turnover of Rs 5 
million and more, only about 600 have so far registered, the 
progress coming down to under one per cent of the total.
Under the CBR directives, the campaign for getting the 
wholesalers/distributors and retailers has assumed secondary 
importance while the collection to maintain revenues at the 
estimated figures has become of primary status.
The collectorates have slackened efforts for enrolling new 
businessmen under the registration campaign, though it had brought 
considerable dividends as for as compulsory registration of 
importers is concerned. These non-registered importers were facing 
dual loss as they had to pay additional 3 per cent sales tax at the 
import stage while as suppliers they have had to pay another 
additional one per cent.
"Even this pressure did not force them to get registered and this 
led to failure of the campaign for registration to a great extent", 
said CBR officials. Now that the CBR has started concentrating on 
the money aspect of the revenue and not the registration, the 
monitoring of the non-registered activity under ST collectorates 
has been stepped up for revenue gains.
Sources revealed to Dawn that CBR is even considering to propose 
that the additional one per cent ST payable by the non-registered 
suppliers be raised to 2 per cent, after the increase in ST rate 
from 12.5 per cent to 15 per cent.
When asked whether it was advisable to raise it from 1 to 2 per 
cent, senior CBR officials said they were in favour of doing it if 
the government had the will to impose it.

State Bank suffers Rs13.8bn loss on exchange risk cover
Mohiuddin Aazim

KARACHI, Jan 12: The State Bank suffered a huge loss of around Rs 
13.8 billion on the exchange risk cover it provided on foreign 
currency accounts in fiscal 1997-98. This wiped off a little less 
than one third of Rs 42.12 billion SBP earnings reducing them to Rs 
28.32 billion.
These figures form part of the SBP annual accounts for fiscal 1997-
98 released last on December 31.
SBP provides exchange risk cover on foreign currency accounts at a 
pre-determined rate for a specified period. Suffering loss in this 
business means the SBP realised lesser amounts in forward cover 
fees than the losses it booked due to rupee depreciation.
In 1996-97 the State Bank had incurred Rs 25.7 billion loss on this 
business that had lowered its total earnings worth Rs 40.4 billion 
to Rs 14.7 billion.
The enormous losses the State Bank booked during 1996-97 and 1997-
98 show that the forward cover was being provided at sort of 
subsidised rates. Now the SBP has realised this and is bent upon 
eliminating this subsidy. 
In mid-November the SBP raised forward cover fee from 7 to 8 per 
cent on dollar deposits in the second upward revision since July 
1998. On July 9 the fee was enhanced from 5.5 to 7 per cent per 
annum. On both occasions the fee was also raised on other foreign 
currencies as wellincluding pound sterling, Deutsche mark and 
Japanese yen.
Senior bankers say what enabled the State Bank to raise the fee 
twice within five months was that foreign currency deposits had 
already been frozen on May 28 1998. Higher forward cover fee meant 
a direct increase in the cost of foreign currency deposits which 

forced the banks to cut profits on them. Had the deposits not been 
frozen banks would not have swallowed an increase of 3.5 per cent 
in forward cover fee within five months fearing loss of business in 
case of slashing profits on the deposits accordingly.

22,000 new wealth tax-payers identified
Intikhab Amir

PESHAWAR, Jan 12: The income tax authorities have undertaken a 
fresh initiative to improve wealth tax collections by bringing 
about 22,000 new tax-payers in the wealth tax net across the NWFP, 
official sources told Dawn here on Tuesday.
"Notices would be issued to 6000 new wealth tax-payers only in the 
provincial capital," said a well placed official of the income tax.
Overall 22,000 new wealth tax-payers identified under the reports 
of various agencies would be brought under the tax net in the 
The step is in line with the income tax, Peshawar-zone's move to 
enlarge its tax base.
As per the target set by the Central Board of Revenue for the 
current financial year, the number of direct tax-payers in NWFP has 
to be raised to 190,000 tax payers from the existing 128,000, said 
the sources.
Sources told Dawn that the move on the part of the tax authorities 
would cover a considerable number of officers of the provincial and 
federal governments who, as per lists prepared by the authorities, 
own big bungalows in the Hayatabad and University town, which are 
considered the posh localities of Peshawar.
At the first instance, the owners of residential plots and flats 
and apartments in Hayatabad and University town, Peshawar, are 
being issued notices to submit their wealth tax returns within a 
week time with the authorized officers of the Income tax, Peshawar 
"A total of 6000 such plots and flats have been identified and 
their owners are being issued wealth  tax notices," said the 
A total of Rs 20 million is expected to be raised alone from the 
Hayatabad and University town's residential areas.
Likewise Peshawar, wealth tax notices to new identified tax-payers 
in the Mardan, Abbottabad and D.I.Khan circles of the Peshawar-zone 
of income tax would also be issued, said the sources.
Some 16,000 wealth tax notices will be issued in the  three 
circles, according to sources, who hoped the process of issuing 
notices in Mardan, Abbottabad and D.I.Khan would also get under way 
The tax collection authorities in Peshawar are hopeful that the 
inclusion of 22,000 new wealth tax-payers in the tax net would 
record a considerable increase in the over all collections of the 
Peshawar-zone of income tax.
"Apart from the payment of wealth tax, the people falling under the 
tax net would have to show their source of income and apparently 
they would fall in the income tax net, too," maintained the 


Export earnings decline by 12.4pc

ISLAMABAD, Jan 11: The country's export earnings during first half 
of the financial year 1998-99 declined by 12.40 per cent to $3.84 
billion from $4.342 billion compared to corresponding period of 
1997-98, according to the foreign trade figures provided by the 
Federal Bureau of Statistics here on Monday.
According to current trends the annual export target for current 
fiscal appeared to be unachievable.
As the imports, at $4.39 billion, also fell by 19.65 per cent, the 
July-December (1998-99) period limited the trade deficit to $0.553 
billion. This is less than half of the trade gap registered during 
the corresponding period of 1997-98. In July-December, 1997, the 
trade deficit was $1.13 billion.
The Trade Policy for 1998-99 had projected the trade deficit to be 
$1.5 billion. That actual trade gap at the end of first half of the 
financial year was 36% of the projection can mean that Pakistan 
would be comparatively better off in terms of balance of payments 
situation when 1998-99 comes to a close.
To finance even this reduced trade gaps a government economist 
remarked, would be a big problem in view of the worsening resource 
crunch compounded by difficulties being faced in raising loans from 
the traditional creditors in the current financial year.
In order to catch up with the exports target, the exporters face 
the challenge of exporting $1.02 billion worth of goods each month 
during the rest of the year. This, however, involves a Herculean 
effort because exports in the first six months averaged $0.640 
billion per month.
Exports during the month of December, 1998, stood at $0.716 
billion, compared to $0.837 billion in December 1997, denoting a 
decline of 14.47 per cent. Compared to November, 1998, however, the 
exports during December were higher by 14.44%.
Analysis of the figures for the month of December, 1998, showed 
continuing downward trend in imports. Totalling $0.773 billion last 
month, the imports declined by a further 18.29% compared to 
December 1997. When compared with the figures for November 1997, 
the imports showed a decline of 0.37%.
Sharply reduced imports during December, 1998, translated into a 
sharp drop in trade deficit to $57.34 million from $150.6 million 
in November, 1998. In December, 1997, Pakistan had experienced a 
negative trade gap of $109.3 million.
Thanks solely to a steep drop in imports, the proportion of imports 
covered by exports at the end of December, 1998, was a high 87 per 
cent. During the first half of 1997-98, the exports had accounted 
for 79.33% of imports.

APP adds: Main items of exports during December, 1998 were cotton 
yarn (Rs 4,227m), knit-wear (Rs 4,139m), ready-made garments (Rs 
3,689m), cotton fabrics (Rs 3,306m), rice (Rs 2,838m), bed-wear (Rs 
2,469m), synthetic textile fabrics (Rs 1,680m), leather 
manufactures (Rs 1,431m), other textile made-ups (excluding towels 
& bed-wear) (Rs 1,182m), towels (Rs 722m), sports goods (Rs719M), 
fish and fish preparations (Rs 529m) and surgical instruments (Rs 
Main items of imports during December, 1998 were petroleum products 
(Rs 4,332 m), palm oil (Rs 2,890 m), soyabean oil (Rs 1,579m), 
fertilizer (Rs 1,556 m), wheat unmilled (Rs 1,545 m), petroleum 
crude (Rs 1,524 m), road motor vehicles (Rs 1,274 m), plastic 
materials (Rs 1,022 m), medicinal products (Rs.1,004 m) and iron & 
steel (RS 932 m).

KSE-100 share index recovers 3.63 points

KARACHI, Jan 14: Stocks turned in a relatively improved performance 
on Thursday on short-covering in some leading shares ahead of IMF 
meeting in Washington to approve the first tranche of $250 million 
out of the revived $1.5 billion credit line under ESAF. The index 
recovered 3.63 points.
Fall of the volume to a meagre figure of 31 million shares tells a 
different story but there are reasons to believe it could finally 
lead to a status quo in the sessions preceding the IMF approval of 
the Pakistan's aid request.
Although the index moved in an extremely narrow band as the PTCL 
again assumed the role of a trend-setter and virtually danced to 
the tune of its price movements, its final show of strength 
reflects that it could take the entire market along with it where 
it likes to, said an analyst.
"News that the Goldman Sachs team is due possibly by the next week 
to accelerate its process of privatization seems to be the chief 
inspiring factor behind the current speculative support and 
bargain-hunting," he added.
Foreign investors did not return to the rings as they will stay out 
until IMF finally okays the bail-out package, of course, without 
new conditionalities, some others said.
The KSE 100-share index was up by five points soon after the 
opening on news that the IMF board meeting scheduled for today will 
approve the credit line of $1.5 billion under the Extended 
Structural Adjustment Facility (ESAF) but investors took profits 
toward the close owing to a long weekend ahead.
The index finally ended around 924.19 as compared to 920.56 a day 
earlier after moving either-way within a narrow range, reflecting 
the strength of PTCL, which holds a weightage of 33% in it. It 
finally ended higher by 3.63 points.
Analysts said the first tranche of $250 million under the ESAF will 
be available possibly by the end of the current month if the IMF 
meeting approves the package and that will further reinforce the 
forex reserve base.
"Pakistan is aspiring to attain the level of $2 billion by early 
next month for its forex reserves and that goal now appears to be a 
possibility if all goes well with the IMF meeting," they added.
They said a decline of 17% in export and an identical fall in 
imports has certainly narrowed the trade deficit for the first half 
of the current fiscal. It did not add anything to the forex 
"The pre-holiday stance of the market, which is a bit firm, 
reflects that bulls are now entertaining a bull-run possibly by the 
next week," said a leading floor broker. "They consider the IMF 
approval is sure and that is why loath to leave the rings," he 
There appears to be a near-consensus among the leading stock 
analysts that the post-eid sessions could witness a buying euphoria 
leading to a sustained bull-run, based of course on positive 
developments on the foreign aid front and the return of foreign 
investors. Most of the current favourites remained active centre of 
alternate bouts of buying and selling and maintained a firm posture 
despite late selling at the higher levels.
Leading gainers among them being Pak-Suzuki Motors and Pakistan 
Tobacco, which rose by Rs 1.95 and Rs 1.50, followed by Yousuf 
Weaving, PNSC, Tri-Pack Films and Union Bank, rising by 75 paisa to 
one rupee.
Barring sharp decline in Ideal Spinning, Trust Bank and Kohinoor 
Genertek, which suffered fall ranging from Rs 1.50 to Rs 4.00, all 
other losses were mostly fractional and reflected lack of support 
rather than large selling from any quarter.
Trading volume showed a sharp decline at 31 million shares as 
compared to 50 million shares on Wednesday as investors were not 
inclined to make larger commitments owing to holidays ahead.
There were 102 actives out of which 39 shares rose, 33 fell with 30 
holding on to the last levels.
PTCL topped the list most actives, up 10 paisa at Rs 18.40 on 15 
million shares, followed by Hub-Power, steady 10 paisa at Rs 13.15 
on 8 million shares, Fauji Fertilizer, easy by 10 paisa at Rs 43.75 
on 2 million shares, ICI Pakistan, unchanged at Rs 9.95 also on 2 
million shares, and Engro Chemical, higher 35 paisa at Rs 88.60 on 
1.5 million shares. Other actively traded shares were led by FFC-
Jordan Fertilizer, unchanged on 0.541 million shares, Askari Bank, 
firm by five paisa on 0.436 million shares, MCB, easy 10 paisa on 
0.326 million shares, and PSO, up 45 paisa on 0.262 million shares.
DEFAULTING COMPANIES: The share of Asia Board came in for stray 
support at the lower level and was marked up by 25 paisa on 1,000 

Back to the top
'Pity Pakistan'
Ardeshir Cowasjee

"PITY Pakistan" was the heading of an editorial in The Times 
(London) on January 5. The sub-heading : "A wretched mess of 
intolerance, killings and corruption."
Portions of this editorial read: "The massacre of at least 16 Shia 
Pakistanis at prayer in a mosque in the Punjab city of Multan is 
another grim example of the religious fanaticism that is destroying 
government and society in Pakistan... Religious vendettas ... are 
only one aspect of a deadly combination of lawlessness, 
intimidation, assassinations and corruption that has already 
brought this unhappy country close to political and economic 
"Pakistanis look in vain to their government to end these horrors. 
In addition to the sectarian conflict... Pakistan also suffers from 
the debilitating violence in Karachi... violence which has killed 
most commercial initiative in this former centre of trade is now 
spilling beyond city and into all local politics...
"Nawaz Sharif, the prime minister, has promised to crack down on 
terrorism. But he shows neither the will nor capacity to do so... 
In many ways the prime minister is in an enviable position. He has 
an overwhelming parliamentary majority. He has won the power 
struggle with the former president and with Pakistan's judiciary... 
The political opposition is discredited by the allegations of 
corruption levelled at Benazir Bhutto, her family and her cronies. 
But he has thrown away his advantage. He has done little to 
liberalize the economy, reform the country's political institutions 
or crack down on corruption. He has shown himself to be as venal an 
opportunist as most politicians. And he appears greedy for absolute 
power with little idea of how to use it for Pakistan's advantage.
"There is an illusion in Pakistan that because it has exploded a 
nuclear bomb, it commands world respect. Pakistanis believe that 
they will be bailed out of their largely self-made economic mess 
because of their strategic and political importance. In fact, the 
resort to nuclear testing, just like Mr Sharif's embrace of an even 
more rigid Islamicization, is a populist attempt to hide the 
failings of his rule. Both may bring short-lived popularity. But 
the costs  a cut in foreign aid and growing religious intolerance 
are weighing heavily on the population..."
This is a serious indictment, not a word of which can be denied. It 
arouses anger. Why have the people of Pakistan been made objects of 
pity? For far too many years our leaders have forced us to rely on 
bounty, on crumbs doled out by the West and Japan to suit their own 
purposes. They made no effort to make a resourceful country self-
reliant. To add to the humiliation, they rob and loot, they enrich 
themselves. Why do they not educate, encourage their people to 
strive, to seek, to find? The tyranny of the uneducated has 
surpassed the tyranny of the intellect. We must blame ourselves, we 
imbeciles. We did not rise; we remain supine.
Strife and violence, particularly when dependent upon drugs, guns 
and fanaticism, grows and grows when not stemmed by reprisals and 
even-handed punishment to mete out which there must be even-handed 
justice, to hand down which there must be honest god-fearing men. 
But, each leader since the loss of half the country in 1971 has 
done his utmost to subdue the judiciary, and down the years the 
efforts and results have progressively taken their toll.
History will not forgive Nawaz Sharif for bringing down the 
judiciary as he has done. To save his own skin, he conspired with 
the greedy pliable elements of the crumbling pillars of state. The 
Supreme Court of the land, whilst in session, was stormed by 
hooligans, and the judges forced to withdraw. This happened 
fourteen months ago. The ruffians did not fall from the sky. The 
world knows the raid was organized. The culprits have been 
identified. Yet the court has found itself incapable of, or 
unwilling to, bring the stormers and their instigators to book and 
to redeem its violated honour. If after a year and two months the 
Supreme Court has not acted, must we not ask why? Are the judges 
not aware that acquiescence in violence and an inability to punish 
have but encouraged further violence in our courts?
Again, we are to blame. Would the American people have tolerated 
Clinton organizing the storming of Congress to save himself? For 
that matter, would Clinton even have dreamed of such a measure?
The sooner we accept that the nation has no leverage and that to 
the lenders it is now of little strategic or political importance, 
the more chance we will have of survival. We should meekly accept 
whatever pittance they are willing to give us, and knuckle down to 
trying to attain self-reliance.
The last begging spree ended in a fiasco. We broke the begging-
bowl. Should the enlightened joy-riders and wives included in the 
129-strong 'delegation', who travelled in the special plane to 
Washington, who demanded to be kept in five-star hotels, not have 
asked themselves (let alone their leader who invited them) just 
what they could possibly contribute? Did one choose to withdraw?
A Lahore weekly newspaper reported that Jamil Rana, a former 
cricketing pal of Nawaz Sharif, was part of the 'delegation.' 
Apparently, on the eve of the grand departure, whilst the prime 
minister was holding court in Lahore, Rana, in his pristine 
Punjabi, asked his old pal, "Kaddi sanoo ve naal lay jaya karo, 
Badshaho." (Oh great king, take me too along with you sometime). 
Done, said the king. Get your passport to my military secretary and 
be at Chaklala at dawn. Rana rushed to his suburban Santnagar home, 
retrieved his passport, got himself to the airport on time, and off 
he went on the state-funded picnic.
Unbelievable, said I, to the editor. Did you check and recheck? I 
was told the source was another cricketer of Santnagar, and that so 
far there had been no denial. It reminds me of the old joke floated 
in the 1950s by the Sikhs, who are able to have a good laugh at 
their own expense, I told her. Precisely, she replied, we have 
referred to it this week.
Despite advice to the contrary from Khushwant Singh and others, the 
Sikhs strove, managed to carve out a homeland for themselves, and 
called it Khalistan. They opted for the presidential system and 
elected the brave warrior, Sardar Mahajagat Singh, as president. He 
swore in a government of a hundred ministers and advisers. 
Brothers-in-law, cousin-brothers thrice removed, and so on and so 
forth, had to be employed. Apart from the usual run-of-the-mill 
members, his cabinet included a Master of the Kirpan, a Master of 
the Kachaa, a Master of the Kesh, a Master of the Kara, a Master of 
the Kanga, a Master of the Roads (Sardar Rathore Singh) and a 
Master Gunner of the Gurdwaras (Sardar Tope Singh) holding the rank 
of a five-star general whose job it was to ensure that flags were 
hoisted, guns were fired, and bells were rung each time the 
president or one of the hundred VVIPs passed by any one of the many 
gurdwaras. The duty of the Master of the Roads was to block all the 
roads when any of the VVIPs were on the move and keep the hoi-
polloi firmly out of sight. 'Protocol', they called it.
After the first week of celebrations, pomp and glory, the president 
and his ministers went about their business  robbing, cheating, 
extorting. This involved so much movement that normal life in 
Khalistan came to a standstill and no work could be done. Rathore 
had the roads blocked day and night. The guns of the gurdwaras 
fired non-stop, the bells clanged unceasingly, flags were never 
After the passage of a hundred days Mahajagat called in his 
hundred. All is well, he told them, but in a week's time most of 
our people will be unemployed, they will have no food to eat, no 
water to drink. Tope Singh will have no powder for his guns. Form 
caucuses, and come up with a solution within three days.
Three days later they all met again, and Tope rose to address the 
assembly. "Oh Sardar of Sardars, Mahajagat, have no fear. We have 
before us precedents. Germany and Japan fought a war with America, 
they lost it, the victor then came to their aid and rebuilt both 
countries. Look at them today. We must declare war on America. We 
will lose it, and America will then come to our aid."
"Bravo, bravosimmo," said the president, as cheers resounded around 
the hall. Then, Mahajagat paused to think. He beckoned his Master 
Gunner to his side and whispered in his ear, "But, Brave Tope, what 
if we win the war?"

What scares away investors
Irfan Husain

YOU'D think a government headed by an industrialist would at least 
be sympathetic to his fellow-entrepreneurs. Forget it. Apart from 
the kitchen cabinet of loan defaulters and tax evaders, the rest of 
the tribe is having a pretty tough time.
Take the case of those foolish enough to invest in the Gadoon 
Amazai Industrial Estate outside Peshawar as an example. Here were 
businessmen attracted by the incentives offered by the PPP 
government in 1989, and who established a number of industries in 
one of the most backward parts of Pakistan. Obviously, their 
decision only made sense if one factored in the duty-free import of 
machinery and raw materials. Soon after the dismissal of the 
Benazir Bhutto government in 1990, these concessions were 
The affected businessmen went into appeal against this capricious 
and ruinous decision, and pending a decision, they were allowed to 
continue importing raw material and machinery against bank 
guarantees. After the usual long drawn-out litigation in the 
superior courts, the decision went predictably in this government's 
favour and these industrialists are now faced with the very real 
prospect of having their guarantees worth billions of rupees 
While this judgment will certainly swell the official exchequer, it 
won't advance the cause of industrialization in Pakistan.
As it is, the business environment and investment prospects have 
been dealt a severe blow by the mishandling (and, indeed, 
manhandling) of independent power producers. And the freezing of 
foreign exchange accounts hasn't exactly enhanced the government's 
credibility in business circles. To now penalize the industrialists 
who took a government policy at face value ten years ago will 
certainly ensure that nobody repeats this mistake in the future. We 
may all just as well forget about creating an industrial base under 
these circumstances.
It would seem that the whole country is hostage to the political 
vendetta that is being waged with such vicious disregard for the 
national interest. Clearly, industry is no exception. And yet the 
economy needs consistent policies if it is to be resurrected from 
the terminal moribundity in which it is currently languishing. If a 
businessman knows he will get shafted every time the government 
changes, he will think ten times before investing a penny. Indeed, 
this is precisely why industry is in the doldrums right now. 
People would rather speculate in real estate and dollars (the stock 
market having been brought to its knees by what passes as this 
government's economic policy) rather than invest in a factory where 
he becomes a sitting duck for marauders from political parties and 
government departments. As a car sticker proclaimed: "Please do not 
steal: the government doesn't like competition."
For readers who think I am exaggerating, let me reproduce here a 
list of government inspectors who regularly and officially visit 
factories for their pound of flesh:
1) Labour Inspector (under various labour laws).
2) Labour Inspector (Technical) for safety and health.
3) Electrical Inspector, Government of Sindh.
4) Electrical Inspector, KESC.
5) Inspector, Social Security.
6) Inspector, Employees Old-Age Benefits Institution.
7) Inspector, Civil Defence.
8) Inspector, Weights and Measures.
9) Excise and Taxation (Property).
10) Sales Tax Audit, Karachi.
11) Sales Tax Revenue Audit, Islamabad.
12) Survey and Rebate Department, CBR.
And if this platoon of shakedown artists wasn't enough, the head 
offices of industries have to endure the additional attentions of 
the following functionaries:
1) Shops and Establishment Inspector.
2) Excise & Taxation  Professional Tax Inspector.
3) EOBI Inspector.
4) Income Tax Inspector and Notice Server.
5) Inspector Stamps  Government of Sindh Board of Revenue.
Any of this horde has the power to inflict huge losses on a 
business operation. Take the innocuous-sounding Civil Defence 
Inspector as an example. Given the dismal track record of our civil 
defence personnel during the two wars of 1965 and 1971, it seems 
strange that this department is still functioning. 

Nevertheless, it continues to flourish; indeed, it is considered a 
desirable and profitable sinecure. If a factory manager refuses to 
pay off the inspector, he threatens to send key production workers 
on a civil defence course, something he has the legal authority to 
do. So you pay up or accept a loss in output. 
And so on down the line. Those few businessmen who play by the book 
and pay the official amount due to each agency add considerably to 
their costs, and thus lower their profit margin. The vast majority 
simply pays them a fixed amount under the table.  Apart from these 
periodic and predictable depredations, there is the protection 
racket being run by political parties and their armed wings. 
Businessmen are threatened with dire consequences if they do not 
contribute to party funds. We all know that this money finances the 
lifestyle of our leaders. The MQM is alleged to be the worst 
offender. How else, people ask, can its chief be living in comfort 
in London for years?
Then, of course, there are the kickbacks that have to be paid to 
the Customs on the clearance of imported consignments and to the 
Income Tax officials when tax returns are being filed. And if 
somebody is foolish enough to wish to expand or diversify then a 
whole new set of bribes have to be negotiated. 
The whole thing is now so institutionalized that a businessman can 
probably calculate at the beginning of the year how much he has to 
put aside as bribes.
I know that our industrialists are no angels. When they give a 
bribe, they save some money or time or both. But then they are in 
the business of making money. The ones I know would rather pay the 
exchequer than the parasites the state has set loose on them, but 
government inspectors and agencies make life so hard for them if 
they don't pay bribes that most simply take the line of least 
resistance and cough up.
For their part, officials are wonderfully creative when it comes to 
extracting bribes. Recently, we imported some testing equipment for 
the laboratory of the educational institution I am involved with. 
When no inducement was offered to Customs for its prompt release, 
the documents were sent to the Atomic Energy Commission in 
Islamabad for a certificate that the machine did not emit any 
dangerous radiation!

Team gets go-ahead for India Test series 

CALCUTTA, Jan 14: A top Pakistan cricket official said on Thursday 
after a security visit that he was satisfied with arrangements for 
his team's tour of India which has been threatened by Hindu right-
wing attacks.
Brigadier Saeed Ahmad Rafi is to send his report, on which hangs 
the fate of the tour due to start in nine days' time, to the 
Pakistani High Commissioner and the Pakistan Cricket Board (PCB) in 
the next 24 hours.
"I am satisfied. I am satisfied they have done a lot of work and 
hopefully we will see they will be implementing whatever we have 
discussed," Rafi said after meeting senior Indian cricket officials 
The tour will mark the first time Pakistan have met India at test 
level for 10 years, since when their cricketing links have been 
repeatedly hit by threats from a fringe of Hindu extremists.
Rafi flew in to inspect the security arrangements for the tour 
after Shiv Sena activists vandalised the Delhi pitch last week. The 
party vowed to prevent the originally scheduled first test from 
taking place on the ground.
Rafi met Board of Control for Cricket in India (BCCI) secretary 
J.Y.Lele and International Cricket Council president Jagmohan 
Dalmiya on Thursday.
Rafi said: "We had many meaningful discussions with each other and 
certain clarifications have been made. Based on those 
clarifications, I shall be submitting my report.
"Thereafter, it is the job of the High Commissioner and the PCB to 
contact the government (of Pakistan) and give a response. Hopefully 
it will be done very soon," he said.
India has assured Pakistan of "fool-proof" security for the tour.

Pakistan Open squash to a Super Series event

KARACHI, Jan 9: The Pakistan Open squash this year will carry a 
cash prize of US$ 70,000 and is among the eight super series events 
listed in the Professional Squash Association (PSA) 1999 tour 
Due to the financial constrains, the Pakistan Squash Federation 
last year reduced the prize money of the Pakistan Open to US$ 
50,000 which was won by Amjad Khan of Pakistan in the absence of 
Jansher Khan who did not defend the title.
The 1998 Pakistan Open was a major tournament but it was not a 
super series event.
According to information available the Pakistan Open will be of a 
32-man main draw whose main round starts on Oct 10-15, preceded by 
a two-day qualifying round on Oct 8. However the PSF has yet to 
confirm to the PSA about the venue of the Pakistan Open.
The Tournament of Champions with a US$ 70,000 tournament scheduled 
in New York from Jan 23 is the first super series event followed by 
the prestigious British Open commencing from March 22 with a prize 
money of US$ 79,000.
The other five super series events are:
Hong Kong Open at Hong Kong from Aug 24-29 (Prize money US$ 
74,000), Al-Ahram Championship at Cairo from Sept 11-17 (US$ 
1,30,000), Kuwait POW s Open at Kuwait city from Oct 3-8 (US$ 
70,000), Qatar International at Doha from Oct 18-22 (US$ 1,00,000), 
World Open at Cairo from Oct 28-Nov 5 (US$ 1,50,000), preceded by 
World Team Championship which is not a ranking event.

Pakistan finish 4th in Calcutta karate

LAHORE, Jan 12: Pakistan claimed fourth position in  eight-nation 
Kyokushin Cup Karate Championship which was held at Calcutta 
(India) last week.
Pakistan team coach Muhammad Arshad Jan told reporters here on 
Tuesday that the team displayed good performance in the 
championship against the strong teams of Japan, Australia and India 
who won the first three positions respectively. Sri Lanka, Jordan, 
Bangladesh, Nepal and Pakistan were the other countries who took 
part in the tournament.

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