------------------------------------------------------------------- DAWN WIRE SERVICE ------------------------------------------------------------------- Week Ending : 12 August 2000 Issue : 06/30 -------------------------------------------------------------------
Contents | National News | Business & Economy | Editorials & Features | Sports
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CONTENTS ===================================================================
NATIONAL NEWS + President amends Act: Convicts can't hold party office + Cease-fire ends, Hizbul Mujahideen to resume fighting + China increased missile sales to Pakistan: US + Pakistan troops urged to liberate Kashmir + Nuclear war feared possible over Kashmir: New York Times + India wants to divide Kashmiris: Foreign Office + Door to peace still open: FO + Devolution plan rejected: APC wants immediate timeframe for polls + Extradition talks with US expert make progress + Underemployment rising alarmingly + Plane hijacking case: Production of new papers in SC opposed + Supreme Court rejects Nawaz's petitions + Jabbar rules out talks with Nawaz + Musharraf dissatisfied with pace of Ehtesab --------------------------------- BUSINESS & ECONOMY + Federal tax ombudsman to try corrupt employees + Mark-up rate on loans to provinces cut + Exports drop by 23.75% in July + New FCY deposits cross $1 billion mark + Textile sector on govt priority + 3,500 CBR employees face dismissal + Pakistani banks' LCs refused + 3% black economy comes into tax net + National Finance Commission faces fiscal devolution issue + Rs90.3 billion paid to HUBCO + Wheat dues to be deducted at source + Meeting on turnover tax + Stocks finish on easy note --------------------------------------- EDITORIALS & FEATURES + Progressive Pakistan Ardeshir Cowasjee + Drones and brahmins Ayaz Amir ----------- SPORTS + Moin pulls out of Singapore series + Malik replies to show cause notice + 'Life ban on Malik not to be revoked'

President amends Act: Convicts can't hold party office
Bureau Report

ISLAMABAD, Aug 9: President Mohammad Rafiq Tarar amended Political
Parties Act, providing that a convicted person or who is otherwise
disqualified to be elected as a member of the parliament, will not
be able to hold party office.

The amendments in the Political Parties Act will hit the heads of
Pakistan People's Party and PML as both Ms Benazir Bhutto and Nawaz
Sharif have been convicted by the accountability courts on the
charges of corruption. Both have filed appeals against their
convictions but the higher courts have not yet suspended the
judgments of the trial courts.

"It is a step towards political purification," Law Minister Aziz A.
Munshi said at a press conference here on Wednesday night. He
further said that amendments in the Political Parties Act were made
to regulate the political activities in the country, adding:
"criminalization of the society cannot and will not be allowed."

He said that law was not violative of any fundamental rights and
was in consonance with international norms. He told a questioner
that in England, a convicted person loses even the right of vote.
Answering a question when the law will come into operation, the
minister said that government will take cognizance if the law was

The law has provided that any person violating the new law would be
liable to be punished with imprisonment up to three years and can
be fined or both. The ordinance called the Political Parties
(Amendment) Ordinance 2000, has come into force. Amending section
4, of Political Parties Act, the amended law has added a new
proviso which reads as:

"Provided that person shall not be an office bearer of political
party if he

- a) is disqualified from being elected or chosen as, and from
being a member of Majlis-i-Shoora (Parliament) under Article 63 of
the Constitution or under any law for the time being in force; or

ii) has been convicted of any criminal offence involving moral
turpitude or offence under the Anti-Terrorism Act 1997 or offence
involving public office order or morality and sentenced by a court
of law to imprisonment for not less than two years, unless a period
of five years elapsed since his release."

The amended law has also substituted section 7 with the following
section: "Any person who being disqualified to be an office bearer
of a political party under this Act or who has been convicted of
any criminal offence and sentenced by a court of law as mentioned
in clause (ii) of proviso to sub-section (2) of section 4 of the
Act as stated above, acts or hold himself out as office bearer of
that party shall be guilty of an offence punishable with
imprisonment for a term which may extend to three years, or with
fine or with both.

2) Any person who, after the dissolution of a political party under
section 6, holds himself out as a member or office bearer of that
party, or acts for or otherwise associates himself with that party,
shall be punishable with imprisonment for a term which may extend
to three years, or with fine, or with both.

3) If any person who was an office bearer of a political party at
the time of its dissolution under sub-section (2) of section 6
indulges or takes part in any political activity with seven years
of its dissolution, he shall be punishable with imprisonment for a
term which extend to three years or with fine or with both."

When asked the law was promulgated to remove Ms Benazir Bhutto and
Nawaz Sharif from the political scene, the minister said that it
was the assessment of the questioner and he was free to draw his
conclusion. Law is very clear and there is no ambiguity in it, he

Cease-fire ends, Hizbul Mujahideen to resume fighting
Ansar Abbasi

ISLAMABAD, Aug 8: Hizbul Mujahideen called off its ceasefire and
directed its field commanders to resume fighting against Indian
occupation forces in Kashmir.

Hizb supreme commander Syed Salahuddin told a press conference that
they were withdrawing the ceasefire, announced unilaterally on July
24, owing to New Delhi's "rigidity" not to accept tripartite
dialogue with Kashmiris and Pakistan for the resolution of the
He said India had derailed the peace initiative and added that "we
have demolished the Indian propaganda that we are against a
peaceful settlement of the Kashmir problem."

He vowed to continue the armed struggle till the liberation of
Kashmir from the Indian yoke, and directed the Hizb commanders and
Mujahideen to immediately execute their target-oriented missions.

The Hizb leader, however, agreed that a peaceful solution could be
found either by implementing the UN resolutions or through
tripartite talks.

China increased missile sales to Pakistan: US
Staff Correspondent

WASHINGTON, Aug 9: The CIA in its latest semi-annual report to
Congress alleges that China increased its missile-related sales to
Pakistan last year and is continuing to supply nuclear, chemical
and biological weapons and missile goods to North Korea, Libya and

"Chinese missile-related technical assistance to Pakistan increased
during this reporting period," the report stated. "In addition,
firms in China provided missile-related items, raw materials,
and/or assistance to several countries of proliferation concern
such as Iran, North Korea and Libya."

The report, a copy of which was obtained by The Washington Times
and is published in the paper's Wednesday issue, also states that
"we cannot preclude" that China has ongoing contacts with Pakistani
nuclear weapons officials contrary to a pledge made by Beijing in
1996 to halt aid to nuclear programs in Pakistan that are not under
international controls. "China's involvement with Pakistan will
continue to be monitored closely," the report said.

Earlier, reported Chinese (and North Korean) missile sales were
mentioned in reports which had surfaced just before the abortive
test of the proposed American anti-missile nuclear shield. This was
mentioned as one of the justifications for the so-called shield.

While the Pakistan-China\North Korea link has often figured in
Congressional debates, the CIA report also mentions the interesting
fact that Iran gained nuclear technology from Russia.

The Senate Intelligence Committee is investigating why additional
arms proliferation activities by Beijing were left out of the
unclassified report, a Senate aide is quoted as telling The
Washington Times. "We welcome the report but the committee has some
concerns over the content and whether certain information should
have been included in the unclassified report that was not," said
the aide.

Pakistan troops urged to liberate Kashmir
Tariq Naqash

MUZAFFARABAD, Aug 8: Prof Hafiz Mohammad Saeed, chief of Markaz
Dawa Wal Irshad, the parent organization of Lashkar-i-Taiba, asked
Islamabad to send its troops across the Line of Control to liberate

"It is the duty of the armed forces of Pakistan to cross the bloody
line for the liberation of their Kashmiri brethren," he told a
"Takmeel-i-Pakistan conference" held here at Upper Adda under the
aegis of the Lashkar.

India, he said, was blaming Pakistan for being behind the Kashmir
liberation movement but it had forgot that it itself had sent its
troops into East Pakistan in 1971 in violation of international
laws to dismember Pakistan. "If Indian troops can cross the
international border then why the Pakistan troops cannot cross the
so-called LoC?," he said.

It is not an appropriate time for holding negotiations with India
because Delhi has always deceived the Kashmiris and Pakistan, he
said. "We are not opposed to dialogue but we cannot favor it at
this critical juncture of the liberation struggle because we
believe that it will, as usual, provide India an opportunity to
gain time to continue massacre of the Kashmiris."

He said talks should be held only after the withdrawal of the
Indian troops from Kashmir, otherwise, he declared, the Mujahideen
would evict them by themselves. This was the unanimous stand of all
Mujahideen groups, he added. "If any other stand is taken, I am
afraid the sacrifices rendered by the people of Kashmir and the
Mujahideen will be wasted."

Hafiz Saeed declared that all Mujahideen groups, including the
Hizbul Mujahideen, would strengthen mutual coordination and
cooperation to continue Jihad till the liberation of Kashmir. He
rejected Indian allegations that the Lashkar was involved in the
recent massacre in occupied Kashmir. He said he was ready to prove
before any international court that no Mujahideen group was
involved in the killings.

Nuclear war feared possible over Kashmir: New York Times
Staff Correspondent

NEW YORK, Aug 8: The likelihood of a war between India and Pakistan
over the Kashmir dispute "could erupt into a nuclear conflict had
increased significantly," the New York Times said quoting US
officials with access to the secret intelligence data.

The US officials told Times that the CIA and the nation's other
intelligence organizations had reached consensus after examining
the nuclear capacities of the two countries and the growing
tensions between them, in particular over the disputed Himalayan
territory of Kashmir.

The assessment, known as a National Intelligence Estimate, began
late last summer after Pakistan-backed militants crossed over the
high mountain peaks of Kashmir into the Indian-controlled area of
Kargil, setting off weeks of heavy fighting that included air

At that time, the Clinton administration grew fearful that the
conflict could escalate into a nuclear exchange, officials told
Times, citing both states' relatively poor intelligence about each
other's intentions and movements and their lack of direct

Several analysts who took part in drafting the assessment said the
report had succeeded in underscoring the importance of working to
ease political tensions between the two rivals that have fought
three wars in the 50 years since their independence. In the past,
the administration had focused mainly on trying to stop the
development and spread of nuclear weapons on the subcontinent.

Last week, for instance, President Clinton talked by telephone with
Prime Minister Atal Behari Vajpayee of India, who is due on a state
visit next month, said Samuel R. Berger, the national security
adviser. Mr Berger added that he himself had held talks with
Pakistan's military leader, Gen Pervez Musharraf, as part of the
dialogue with Islamabad.

Several officials and experts have been suggesting that the US
should press the leaders of Indian and Pakistan to meet in New York
when they come here to attend the millennium summit early
September. Although Chief Executive Musharraf has offered to meet
the Indian leader "anywhere, anytime," the Indian prime minister
has not responded to the offer.

The Times says President Clinton received the intelligence
assessment shortly before his first visit to South Asia in March.
And he clearly reflected the report's conclusions when he twice
called the subcontinent "the most dangerous place in the world."
India's president scolded Mr Clinton and called the description

After the Kargil episode, the assessment, which remains secret,
concluded that there was a sharply increased chance of a non-
nuclear military conflict between India and Pakistan, possibly
erupting into a nuclear exchange.

The chances of such a non-nuclear conflict, one White House
official said, were put in the "50-50 range. The likelihood of a
nuclear conflict goes up and down," another US official told the
paper. "It's less important to assign a probability to it than to
warn senior officials that there is a serious threat here that
demands immediate and focused attention and action," the paper

Given the Kashmir dispute, diplomats and arms control experts see
nuclear weapons on the subcontinent as particularly dangerous.
India and Pakistan, unlike other nuclear powers - for example, the
United States and Russia - share a common border, have had no
sustained dialogue and lack even a framework to hold serious talks.

After Pakistan moved into Kargil, Pakistan's rhetoric grew
increasingly harsh and India prepared to mobilize a significant
force that could have led to a dramatic escalation, experts say.

The intelligence assessment contained no specific guidance on what
the administration could do to reduce tensions, according to those
familiar with the document. But Mr Clinton and other top officials
have urged senior Indian and Pakistan officials in public and
private meetings to open a direct political dialogue and give up
their nuclear programs, warning them of the growing peril of an
accidental or deliberate nuclear exchange.

India continues to see its nuclear arsenal as necessary for its
status as an emerging power and to deter not only Pakistan but also
neighboring China, a Pakistan ally. Pakistan, less populous and
poorer than India, sees its nuclear force as essential to
counterbalance its rival's larger conventional forces, the NYT

Additionally, analysts have warned if American plans for a missile
defence prompt China to build up its nuclear arsenal, still more
momentum will be added to the arms race across the region.

Noting while President Clinton's visit has not prompted New Delhi
or Islamabad to scale back its nuclear program, the paper says that
many experts say the trip and subsequent administration diplomacy
have helped to nurture other positive political developments.

India has released some political prisoners related to Pakistan-
backed militant groups in Kashmir, and last month one of the most
important of those groups, the Hizbul Mujahideen, declared a
unilateral three-month ceasefire. The group opened talks with India
on Friday. But diplomats and other experts still see the chances of
a lasting breakthrough as low, and violence has continued in

India wants to divide Kashmiris: Foreign Office
Hasan Akhtar

ISLAMABAD Aug 7: Pakistan has asked India to accept it as one of
the two principal parties to a just and peaceful settlement of the
Kashmir dispute in accordance with the recognized international
norms and the United Nations resolutions, says a foreign office

Riaz Mohammed Khan at a news briefing said that the unilateral
cease-fire by Hizbul Mujahideen had put to test India's sincerity
to a negotiated peaceful settlement of the issue and rejected any
suggestion for a change in Pakistan's Kashmir policy. He said that
the full involvement of the All Parties Hurriyat Conference (APHC)
as pre-requisite in any negotiations, was beyond any question. It
was imperative that India must respond positively to Pakistan's
call for dialogue for the success of the present developments, he

Mr Khan cast serious doubts on the Indian attitude to the
negotiated settlement of the dispute in the wake of the cease-fire
enforced on July 24 by the Hizb and alleged that New Delhi wanted
to exploit the situation to divide the Kashmir freedom struggle. If
that course was pursued, he warned, the present developments would
collapse. Indian attempt to divide freedom movement would fail as
its endeavors to impose military solution on the people of Kashmir
had met with fiasco in the past, he said.

He further pointed out that the "upsurge" in Indian troops' massive
repression against the Kashmiri people and freedom fighters by use
of helicopter gunships will lead to serious doubts on India's
sincerity to pursue a negotiated settlement of the dispute.

Mr Khan emphasized that for the progress in the current
developments it was imperative that India should sincerely stop all
repressive actions. He called on India to stop massive human rights
violations in the held Kashmir and respond to Islamabad's repeated
calls for dialogue if it sincerely wished to seek the settlement of
the longstanding dispute. He categorically said that the cease-fire
decision of the Hizb was their own. However, the parties which did
recognize Pakistan's moral and diplomatic support to their cause,
were independent of any control by Islamabad.

Door to peace still open: FO

ISLAMABAD, Aug 9: Pakistan said the door to peace in occupied
Kashmir was still open if India "changes its attitude" and agreed
to unconditional tripartite peace talks.

"If India changes its attitude and shows sincerity then surely
there will be the possibility of progress towards a peaceful
resolution and negotiated settlement," Foreign Ministry spokesman
Riaz Mohammad Khan told AFP.

He said India only had itself to blame for the collapse on Tuesday
of a landmark peace initiative by Hizbul Mujahideen. New Delhi was
ignoring the demands of the international community for peace talks
and was desperately trying to hide its failings by blaming
Islamabad, he said. "It is nothing new for the Indians to routinely
blame Pakistan. They think that by doing so they can get away with
something they are responsible for. They have destroyed the
possibility of a peace process and obviously they want to find a

The spokesman said Pakistan did not control Mujahideen, but "it
appears that their freedom struggle will continue. Whether it will
continue with greater intensity or the same intensity, that is
something to be seen, but surely it will continue".-AFP

Devolution plan rejected: APC wants immediate timeframe for polls
Ashraf Mumtaz

LAHORE, Aug 6: Over three dozen political and religious parties and
groups at an all-parties conference adopted a declaration calling
on the government to give immediately a timeframe for free and fair
elections in which participation of all political parties was

The declaration means that the Pakistan Muslim League has dropped
its earlier demand for the restoration of the suspended assemblies,
although the PML leader Raja Zafarul Haq still insists that
elections held under the supervision of a civil government of
national complexion formed after the revival of assemblies could be
more acceptable than the polls held under a military government.

Many leaders, including Nawabzada Nasrullah Khan, who presided over
the APC, confirmed that the restoration of assemblies' issue did
not come under discussion at all.

The five-page declaration also said that the devolution plan, given
by the National Reconstruction Bureau (NRB), was "neither workable
nor practically possible". It demanded that any restructuring of
the system should be left to the elected representatives. It said
that the local government was a provincial subject and holding of
local bodies elections by the federal government would be violative
of the Constitution and provincial autonomy, and non-party polls
would be against the fundamental rights and a 1988 Supreme Court

This was the first conference, held at such a large scale, after
the military takeover. However, the Nawabzada smiled off repeated
questions as to whether the moot could lead to the formation of a
broad-based alliance against the government.

Parties which participated in the APC include: the PPP, the PML,
PML (Chattha), PML (Jinnah), Pakistan Democratic Party, Hizbe
Jehad, Islamic Democratic Front, Solidarity Front, Jamiat-i-
Mashaikh, Jamiat Ulema Ahle Hadees, Mazdoor Kissan Party, PML
(Qasim), PML (Qayyum), Muttahida Ulema Forum, Urban Democratic
Front, Christian National Party, Pakistan Tehrik-i-Insaaf, Pakistan
Awami Tehrik, MQM, ANP, Jamiat Ahle Hadees (Yazdani), Jamaat-i-
Islami, Functional Muslim League, NPP (Jatoi), JUI (F), JUI(S),
JUP, JUP (Niazi), Jamiat Ahle Hadees, JWP, BNP, BNM, TJP, Khaksar
Tehrik, Jamaat Ahle Hadees, Markazi Jamiat Ahle Hadees, Pushtoon
Qaumi Tehrik, Muttahida Deeni Mahaz, PNP (Hasil Bizenjo group) and
Awami Qiyadat Party.

Extradition talks with US expert make progress
Ansar Abbasi

ISLAMABAD, Aug 9: The Pakistani authorities and the visiting US Law
and Justice Department consultant Harry Marshall held talks on
extradition issue. Besides, having an introductory talks with the
National Accountability Bureau chairman, Marshal also spoke at a
seminar organized by the NAB for the officers of the bureau,
interior ministry, foreign office and other government agencies.

The NAB chairman, Lt-Gen Syed Amjad Hussain, told Dawn that the
objective of Mr Marshall's visit was to educate the Pakistani
authorities about the procedures and legal requirements that were
needed to be adopted in taking up a solid case of extradition with
the US. "We did not discuss any individual case of extradition
rather tried to equip ourselves as how should we prepare the
(extradition) case that can stand the examination of the US Law and
Justice Department," the NAB chief said.

He categorically denied that Mr Marshall was here to give any sort
of assurance about the extradition of any particular person or
group of persons sought by Pakistan. "Mr Marshall is not from State
Department, neither he is here for the purpose of discussing
extradition case of any particular person," Mr Amjad explained.

He said the visiting official briefed the Pakistani authorities
about the US laws pertaining to extradition. When asked to comment
on the outcome of the first day of the discussions, the NAB chief
said: "I can safely say that we made progress." He added that
Pakistan, in the light of these discussions, would ensure in the
future that by default its extradition requests were not turned
down by the US authorities.

Underemployment rising alarmingly
M. Ziauddin

ISLAMABAD, Aug 8: The open unemployment rate in Pakistan is
estimated at 10 per cent and the phenomenon of underemployment is
even more serious, according latest studies. Only about 60 per cent
of the annual increment to the labor force, estimated around 1.2-
1.3 million, are expected to be gainfully absorbed, adding the
remaining 500,000 or so persons to the pool of the unemployed
annually. However, the estimates of unemployment, developed by
various government departments and independent economists, differ
quite substantially.

Officially, out of a population of 136.9 million an estimated 39.28
million persons are in the labour force with male and female
components being at 33.37 million and 5.91 million, respectively.

It is further estimated that about 44 per cent of the employed
labour force is in the agricultural sector and about 56 per cent in
the non-agricultural sector - about 20 per cent in the formal
sector and 36 per cent in the non-formal sector.

According to official statistics, the overall open employment rate
is 6.1 per cent for both sexes and the underemployment, not
meticulously estimated, is reported to be a multiple of the open
unemployment rate.

Official statistics suggest the underemployment rate at 11 per cent
and researchers in the private sector believe that it could be
between 15 per cent and 40 per cent.

The UNDP Human Development Report, 1997, has ranked Pakistan 92 out
of 94 countries for which a relative gender employment measure was
calculated in economic and political spheres of activities. The
report shows that a large-scale under utilization of women
resources in terms of duration for work, income, skills and
productivity differentials has contributed heavily to the country's
poverty. About two-thirds of the non-agricultural female employed
labor force were engaged in informal sector activities - the
proportion in rural areas being higher (75 per cent) than those in
the urban areas (55 per cent).

According to another study unemployment of high school certificate
holders and above had reached 46 per cent in the late 1980s.

As early as 1973, the Punjab Board of Inquiry had pointed out that
24 per cent of the graduates and post-graduates were unemployed in
the country's largest province. It is quite clear that the nature
and magnitude of open unemployment and underemployment are not
entirely clear in the case of Pakistan.

Plane hijacking case: Production of new papers in SC opposed
Shujaat Ali Khan

LAHORE, Aug 9: The counsel for ousted premier Mian Nawaz Sharif and
his alleged accomplices in the October 12, 1999, PIA plane hijack
vehemently opposed production of new documents in the Supreme Court
to prove government 'sanction' behind state appeals in the case
being heard by a three-member special bench of the Sindh High

An SC bench comprising Justices Chaudhry Muhammad Arif, Munir A
Sheikh and Qazi Mohammad Farooq fixed Thursday for arguments on the
matter. The bench is hearing petitions filed by the ex-PM and his
acquitted co-accused for permission to challenge the SHC order of
May 25 upholding the maintainability of appeals despite the alleged
absence of a notification under Section 25 (4) of the Anti-
Terrorism Act. The provision says that no appeal for enhancement of
sentence or against acquittals can be filed without a direction by
the federal or the provincial government concerned to its principal
law officer in this behalf.

The 'sanction' appended to the appeals when they were filed on
April 18 is a letter addressed by the registrar of special courts
for the suppression of terrorist activities on April 8 on the
provincial home department letterhead. The registrar says that he
is directed to refer to the AG's letter of even date and the DIG
(crimes) letter of April 7. "Necessary sanction is hereby accorded
to prefer appeals/revision .....", he goes on to add.

The petitioners' counsel, Advocate Ijaz Hussain Batalvi and Khwaja
Haris Ahmad, say that under the rules it is the law department that
deals with such matters. The STA special courts' registrar is
nobody to give direction under Section 25 (4) of the ATA. Even if
he is duly authorized, he has accorded 'sanction' and not given
direction on behalf of the federal or provincial government. Even
this 'sanction' was meant for the appeal against acquittals. An
identical letter in respect of the appeal for enhancement of the
ex-PM's life term to death penalty was 'surreptitiously' inserted
in the record on May 15. The deficiency is fatal to the appeals and
cannot be made up now that the limitation period has long expired.

AG Raja Qureshi rejoins that copies of the same letter were
mistakenly appended to the two appeals on April 18. The error was
rectified by filing a separate 'sanction' for the enhancement plea
on May 15 in accordance with the SHC rules and practice. He
recalled that following the April 6 verdict, the Sindh police
inspector-general wrote to the home secretary through the DIG
(Crimes) on April 7 to consider moving an appeal against it. The
AG, at his end, wrote to the law department to allow him to file an
appeal. The outcome of this correspondence was a composite
direction by the provincial governor for filing of appeals. The
direction was sent to the home department, in pursuance of which
the special courts' registrar addressed his 'sanction' letter to
the AG.

On Thursday, AG Qureshi showed the bench the record of
correspondences. He also said that in the memo of appeals he had
clearly stated that he had been directed to file them. Besides, a
notification of appointment of prosecutors issued under Section 18
of the ATA says that they are to 'conduct' and 'pursue' the
appeals. This notification, according to the impugned SHC order,
amounts to a direction to file and prosecute the appeals.

The petitioners' counsel, however, say that a notification of
appointment of prosecutors for pursuing appeals under Section 18,
which deals with the prosecutors' appointment for the trial (anti-
terrorist) court. The ATA was amended on May 30 to bring superior
courts within the purview of Section 18. In any case, a
notification of appointment cannot be construed to mean a direction
to file an appeal.

About the May 30 amendments, the AG said on a cue from the bench
that they had nothing to do with the appeal. Only a legal lacunae
has been removed. Why have the amendments been given retrospective
effect then? Mr Batalvi asked. He and Khwaja Haris requested the
bench to direct the AG to furnish copies of new documents he wants
the court to consider and then issue them notices to address
arguments on the question whether they can be taken into
consideration at this stage. The bench asked the AG to deliver the
copies immediately and adjourned further proceedings to Thursday -
the fourth day of preliminary hearing. The AG is not on notice but
has entered a caveat.

On the question of amendments, the AG said it is none of the
judiciary's business to question the wisdom of law.

Supreme Court rejects Nawaz's petitions
Shujaat Ali Khan

LAHORE, Aug 10: The Supreme Court allowed the Sindh advocate-
general to produce additional documents to establish government
sanction behind the state appeals in the plane hijack case and
dismissed both petitions filed by Nawaz Sharif and other accused
against their maintainability.

Opposing AG Raja Qureshi's application for production of new
documents, copies of which they received on Wednesday night,
petitioners' counsel Ijaz Hussain Batalvi and Khwaja Haris Ahmad
submitted before a three-member bench that no new document could be
produced at this stage to cover up any deficiency in the state
appeals under any rule of the SC or provision of the Constitution.

The AG, Mr Batalvi said, has sought to invoke inherent powers of
the court but they can be exercised to prevent abuse of process of
court and not to encourage it. Having neglected all opportunities
to comply with the requirements of Section 25(4) of the ATC, the
prosecution seeks the indulgence of the apex court to let it
produce extraneous evidence to prove sanction where none exists.
Besides, the law requires a direction from the government and not a
sanction from the registrar of special courts.

If at all the court wants to consider the new documents, the two
counsel said, they should be allowed time to analyze them. Mr
Batalvi declared that the documents had been fabricated and he
should be given an opportunity to prove his assertion.

The bench observed that the court cannot launch a roving inquiry
into the genuineness of documents; that, as stated by AG Qureshi,
all but one of the new documents have been referred to in papers
already submitted; that there is a presumption of regularity
attached to all official acts; and that the Constitution empowers
the court to make any order to do complete justice in any case.

Jabbar rules out talks with Nawaz
Staff Correspondent

MULTAN, Aug 7: Federal information and Broadcasting Minister Javed
Jabbar has ruled out the restoration of parliament and dialogue
with Nawaz Sharif. Talking to newsmen, he said that the Supreme
Court of Pakistan had declared Nawaz Sharif corrupt and thus "we
cannot talk to a corrupt person". He said that we had already
declared a timeframe for the restoration of democracy on March 23.

He said that it was the first military government which had taken
effective measures to strengthen democracy in the country in a
shortest period. He said that holding of dialogue with politicians,
preparation of computerized voters' lists, an independent and
autonomous election commission were part of the plan.

Mr Jabbar said that some elements who had enjoyed power in the past
were demanding fresh elections immediately to escape
accountability. He replied that there was no possibility of
transfer of power to old guns. He said there was virtually no
difference between the objectives of the present government and the
APC with regard to restoration of democracy.

He said that it was a pity that the APC did not address fundamental
issues of party democracy, transparency and party reforms as part
of its stated commitment to democratic process. He rejected the
allegation made by certain participants in the APC that the
accountability process was being used as a tool to victimize
politicians. The fact, he said, is that the APC was attended by
representatives of certain parties whose leadership had been
convicted by courts on serious charges of corruption.

Musharraf dissatisfied with pace of Ehtesab
Nadeem Saeed

DERA GHAZI KHAN, Aug 11: The chief executive, Gen Pervez Musharraf,
on Friday said that the recent amendments to the Political Parties
Act were within the limits of the constitution.

"We have just extended the constitution," he told newsmen after
inaugurating the first branch of the Micro-Finance Bank (MFB) at
Basti Dur Mohammad near here.

The CE expressed dissatisfaction at the pace of the accountability
process, saying "it is slow because I cannot intervene in the
judicial process. Had there been military courts the situation
would have been different."

Yet, he said, the government had managed to recover Rs24 billion
through the accountability initiative. In reply to a question, the
CE ruled out the possibility of giving the country a political set-
up or restoring assemblies.

About his offer for talks to India to resolve the Kashmir issue, he
said Indian leaders were dilly-dallying on the issue.

He told a questioner that the government would give loans strictly
on merit and according to the needs of applicants irrespective of
the fact that the loan-seeker is an individual or a firm.

BANK OPENED: The Chief Executive opened the MFB by disbursing loans
to some selected local applicants. Of the first 10 loan recipients,
seven were women.

The MFB has come into being through a presidential ordinance issued
on Aug 4 with an aim to meet the credit needs of those involved in
small business concerns.

Speaking at a public gathering on the occasion, the CE said he was
pleased to launch a bank to improve the financial condition of the
deprived segments of society.

He said the poor would not have to visit the bank offices as its
officials would themselves knock at their doors to advance them
loans to start their businesses.

He urged the poor to take benefit of the government move and use
their loans to make money. "Remove the evil of poverty by taking
advantage of the Micro-Finance Bank loans," he said.

The CE expressed dislike for the English name of the bank and asked
for some indigenous title and then suggested "Khushhali Bank" for
the first institution of its kind. Throughout his speech
afterwards, he called it so.

Giving reason for launching the Khushhali Bank in Dera Ghazi Khan,
the CE said the town was situated in the middle of the country and
it was identified as the most backward area in Punjab. He told the
gathering that Rs280 million would be spent

on 140 development schemes being carried out to eliminate poverty
and backwardness in the area.

He stated that a plan was being envisaged to utilize Zakat funds
for interest-free loans to the poor for their economic
rehabilitation instead of making them to live on Rs500 (Zakat) a

A large number of women attended the public meeting whom the CE
asked to get loans from the Khushhali Bank and shoulder
responsibilities of their families. The main factor behind the
success of 'Gramin' bank of Bangladesh was participation of women
as debtor who repaid their loans dutifully, he pointed out.

Federal tax ombudsman to try corrupt employees
Rafaqat Ali

ISLAMABAD, Aug 11: President Mohammad Rafiq Tarar on Friday
promulgated an ordinance, establishing Federal Tax Ombudsman to
hear complaints of corruption and maladministration by the tax

The ordinance called Establishment of Office of Federal Tax
Ombudsman Ordinance 2000, has come into force. The federal tax
ombudsman, appointed by the president, for four years will enjoy
vast powers and resources to investigate any compliant. He would
have the powers to summon any tax official or any other official,
in relation to the inquiry before him.

Justice Saleem Akhtar, retired judge of the Supreme Court is likely
to become the first federal tax ombudsman. Federal minister for
finance Shaukat Aziz had announced his name as the first FTO.
Formal notification, however, has not been issued.

The law has defined the word maladministration as: "(1) a decision,
process, recommendation, act of omission, or commission which; a)
is contrary to law, rules or regulation or is a departure from
established practice or procedure unless it is bona fide and for
valid reason; b) is perverse, arbitrary, or unreasonable, unjust,
biased, oppressive, or discriminatory; c) is based on irrelevant
grounds; d) involves the exercise of power or failure to do so, for
corrupt, or improper, motives, such bribery, jobbery, favouritism,
nepotism, and administrative excesses."

The FTO will have the powers to constitute inspection team
consisting of one or more persons. The inspection team will have
the power to enter into any premises where any article, accountants
were suspected to be laying.

The FTO, on a complaint by any aggrieved person or a reference by
the president, the Senate or the national assembly, as the case may
be, or on a motion of the Supreme Court or a high court made during
the course of any proceedings before it or of his own motion, will
investigate any allegation of maladministration on the part of the
revenue division or any tax employee.

The revenue division or any person aggrieved by a recommendation of
the FTO, within 30 days of the recommendation, will be able to make
representation to the president. The law is silent whether the
president would be bound to dispose of the representation.

The FTO, however, will be barred to investigate or inquire into
matters which are subjudice before a court of competent
jurisdiction or tribunal or board or authority on the date of the
receipt of a complaint. He will also not be able to look into the
matters relating to assessment of income or wealth, determination
of law, rules and regulations, relating to such assessment,
determination, classification or valuation in respect of which
legal remedies of appeal, review or revision are available under
the relevant legislation.

The FTO will not entertain any complaint for investigation by or on
behalf of a tax employee concerning matters relating to the revenue
division in respect of any personal grievance relating to his

For carrying out the objectives of Federal Ombudsman Office, the
FTO would be empowered to arrange for studies to ascertain the
causes of corrupt practices and injustice.

In any case where the FTO decided not to conduct an investigation,
he would be required to send to the complainant a statement of his
reasons for not conducting the investigation.

If the FTO comes to conclusion that the matter considered by him
amounted to maladministration, he shall communicate his findings,
with a recommendation, to the revenue division within a period of
60 days from the date of receipt of the complaint.

Mark-up rate on loans to provinces cut
M. Ziauddin

ISLAMABAD, Aug 9: The government has prepared an 11-point action
plan envisaging a strategic cut in the interest rates on loans to
the provinces and a significant reduction in their salary bills, by
"right-sizing" the provincial departments.

The plan aims at improving the financial position of the provinces,
suffering over the years from a restricted tax base and a
burgeoning debt burden.

Under the plan a medium-term expenditure framework (MTEF) is being
put together in order to better manage the expenses of the
provinces and to properly harmonize their development and non-
development expenditures. This is also seen as necessary in order
to develop appropriate linkages between the development of physical
infrastructure and to relate it with expenditure for its
maintenance on scientific lines.

The provincial governments are allocating, on the average about 18
per cent (14 per cent interest and 4 per cent principal) of its
budget towards debt-servicing. It is felt that over the long time
the provincial governments cannot sustain such a high burden and
therefore, it has been proposed that the interest rates on cash
development loan (CDL) and other such loans given to provinces be
rationalized and reduced as a matter of priority.

The provincial governments are traditionally shouldering the
responsibility of social services with limited assistance from the
centre. As this expenditure has now increased manifold, it is not
possible for the provincial governments to sustain it for long,
therefore, it has been proposed that the federal government and the
provincial governments sit together and resolve the issue on an
urgent basis.

The pressure on provinces to generate revenues continues. The only
option now left for them is to impose general sales tax (GST) on
services which is broad-based tax having considerable potential.
This has already been done in the current budget. However, a
formula for the distribution of these resources is yet to be
finalized as the collection of GST on services is being done by the
CBR staff.

The salary bills of the provincial governments are rising steeply.
In order to bring some kind of an order here, it has been proposed
that the provincial governments take in hand on urgent basis the
task of downsizing in their departments.

Other proposals include elimination of wheat subsidy (already
done), comprehensive review of revenue sharing and revenue
distribution formula, matching of external assistance in a sector
with equal local tax efforts to avert developing that sector at the
cost of other sectors, strengthening tax administration, separating
accounting and auditing functions with provincializing the
accounting functions and making local councils responsible for
development expenditure on construction and maintenance.

Exports drop by 23.75% in July
Muhammad Ilyas

ISLAMABAD, Aug 9: The year 2000-2001 has had a rather inauspicious
start with the exports during its first month (July 2000)
plummeting by 23.75% over the previous month, according to the
trade statistics released by the Federal Bureau of Statistics.

The same month also registered descent of imports by 20.98% over
the previous month. These amounted to $800.56m, compared to $1.01bn
in June 2000, resulting in a trade deficit of $132.58m, down 3.26%
from the previous month. The exports during the month totaled
$667.98m over $208m less than in June, 2000, indicating loss of
momentum in exports that was witnessed in recent months.

The commerce minister in his Trade Policy 2000 has set $10bn as the
target for exports for the current financial year. On this basis,
the month's exports have fallen short of the average monthly target
by about 20%. This probably was the reason the commerce minister
prevented the release of aggregate trade figures for the month.

The commerce ministry, it may be noted, had established a tradition
of providing to the press aggregate figures for the preceding
month, few days prior to the release of desegregated figures about
exports and imports by the Federal Bureau of Statistics. This
tradition has been broken this time.

Due to sharp drop in exports, the proportion of imports covered by
exports also slid down. In June 2000, the export figure was short
of the import figure by 17.53%. In July 2000, this ratio went up to
16.56% of the imports. This means that the government will have to
raise resources to cover the balance of payment deficit to that
extent, whether by purchase of dollars from the open market or by
loan from some foreign agency.

When compared to July 1999, the performance of exports shows an
increase of $66m or 11.06% in the month under report, while the
imports have gone up by 1.46%. The balance of trade gap too, was
down 29.30%, compared to July 1999.

A comparison with the performance of exports for the month of July
during the last five years, nevertheless, indicates some
improvement. In July 1996, exports had totaled $575.46m, rising
impressively to $662.94m in July 1997. The same month in 1998 and
1999, however, saw the exports figures remaining rather stagnant at
$592.10m and $601.47m, respectively.

Further analysis shows that the year 1998-99 had begun with the
lowest trade deficit - $111.72m - in the last five years, denoting
a sharp drop from $270.95m in July 1996 and $245.61m in July 1997.
In July 1999, the trade deficit rose again to $187.54m.

New FCY deposits cross $1 billion mark
Mohiuddin Aazim

KARACHI, Aug 9: Fresh foreign currency deposits of banks have
recorded a growth of over $100 million during the past two months
on declining rupee value.

Senior bankers say foreign currency deposits of banks placed with
the State Bank now stand around $430 million-up from $324 million
as on May 31. Thus total fresh foreign currency deposits -including
$600 million placed abroad-have crossed the mark of one billion

They attribute this growth to the fall of the rupee in inter-bank
market during this period. Inter-bank exchange rate was capped at
Rs51.90 to a US dollar up to May 31. But on June 1, the State Bank
placed the cap at 52.10 and on June 22 at Rs52.30. Finally it
lifted the cap and allowed free float of the rupee on July 22 after
which the rupee has almost stabilized at Rs53.40. Thus the rupee
has seen an effective depreciation of 5.4 per cent in the past two

Bankers say the fall of the rupee has accelerated the growth of
fresh foreign currency deposits. "Foreign currency deposits began
to grow immediately after the State Bank moved the cap on exchange
rates from Rs51.90 a dollar to Rs 52.10," said a local banker. He
said nominal growth had started taking place even before that in
anticipation of the move triggered by reports of a declining Indian

A Finance Ministry official said the build-up in fresh foreign
currency deposits was not a good sign. "We can hardly afford the
dollarization of economy. Suitable steps may be taken to reverse
the trend," he observed.

Textile sector on govt priority

ISLAMABAD, Aug 8: Chief Executive Gen Pervez Musharraf said the
government is giving top priority to the revival of the national
economy and the textile sector is the single most important area of
its attention. He made these observations while chairing the 2nd
meeting of the Export Promotion Board in Islamabad.

Gen Pervez Musharraf said the government is committed to ensuring
an investor-friendly and stable environment coupled with the
continuity of policies to pave the way for boosting textile growth
and exports.

He welcomed the interaction among the government functionaries and
representatives of private sector, adding that it was through
integrated planning and execution that the country's export targets
could be adequately met.

He assured the participants of the meeting of continued support and
incentives from the government.-APP

3,500 CBR employees face dismissal
Parvaiz Ishfaq Rana

KARACHI, Aug 8: The Central Board of Revenue (CBR) in its second
phase of downsizing plan is likely to retrench 3,500 employees from
grade 1 to 16 during the next couple of days, sources say.

The plan aimed at saving Rs240 million of the government coffers,
CBR sources disclosed. The current lay-off would be in addition to
the 1,000 higher grade personnel suspended on May 28, on various
charges and had been made OSDs, they said.

They claimed that the proposal sent some days back to the relevant
authorities was expected to be approved during the next couple of
days. They said the CBR was taking these measures on a study
carried out by the director-general, training and research, Lahore,
Farooq Ahmed Malik.

The study proposes total elimination of those posts which are
mostly occupied by lower cadre employees like lower division clerks
(LDCs), upper division clerks (UDCs), stenographers etc, they
added. This development has sent a shock-wave among the employees
of the CBR, working in different revenue departments all over the

Pakistani banks' LCs refused
Abdus Sattar Ghazali

KUWAIT CITY, Aug 7: Kuwaiti banks are refusing to confirm letter of
credits opened through the Pakistani national banks.

Banking sources told Dawn the Kuwaiti banks are only confirming
Letter of Credits opened by the Pakistani importers through the
foreign banks operating in Pakistan. They said Kuwaiti banks are
not confirming LCs because international financial agencies have
downgraded the rating of Pakistani banks. Kuwaiti banks are even
declining to accept confirmation of LC from Pakistani banks and the
importers here are not paid against their shipment unless the
Kuwaiti bank receives money from the Pakistani bank. The action of
the Kuwaiti banks has caused difficulties for Pakistani exporters
who are forced to open their LCs through foreign banks which often
charge higher.

The sources added that confidence in Pakistan banking system was
shaken in May '98 when the government of Nawaz Sharif froze all
foreign currency accounts.  Since then, all government assurances
have failed to restore the confidence, particularly of the foreign
banks, in Pakistan's financial system, they said.

Mushtaq Ahmad Merh, Ambassador of Pakistan, said that he was not
aware of the situation and will take up the matter with the Kuwaiti
banks as well as the State Bank.

3% black economy comes into tax net

ISLAMABAD, Aug 7: Around 3% of black assets, matching the size of
Gross Domestic Product worth Rs3500 billion is exposed to tax net
through tax amnesty arrangement.

Over 80,000 new tax-payers have also been added to the list, out of
total 91000 declarations made under Tax Amnesty Scheme expired on
June 30, official sources said here on Monday.

Sixty per cent of total declaration valuing Rs103 billion will
continue to generate tax revenue every year, sources stating
maintaining, 66% declared assets comprised jewellery, cash and
prize bonds, etc while rest belonged to property assets.

Total tax amount collected under all tax amnesty schemes through
declaration till 1997 is to the tune of Rs one billion only while
an amount of Rs41 million was collected as tax under the amnesty
scheme in 1997.

A total of Rs103 billion assets declared under the Tax Amnesty
Scheme from different areas of the country include Rs. 39.6 billion
from Southern Region (Karachi, Hyderabad etc.), Rs. 14.3 billion
from Central Region (Multan etc.), Rs. 16.5 billion from Northern
Region (Rawalpindi, Islamabad, Peshawar etc.), Rs. 24 billion from
Eastern Region (Lahore etc.) and Rs. 8.7 billion from Corporate
Region in Karachi.-APP

National Finance Commission faces fiscal devolution issue
Jawaid Bokhari

KARACHI, Aug 7: Fiscal devolution will be the core issue on the
agenda of the National Finance Commission (NFC), set up two years
ahead of schedule, sources said. Officials concede that the NFC has
been set up under pressure from the provincial governments which
feel that the 1997 award has lost its relevance, with gap between
its tax revenue projections and actual receipts widening day by
day. The emerging fiscal scenario could not be ignored.

Besides, massive resources have also to be found to fund the
proposed district governments as "basic governance and development
units" of the country. And finally the third factor that prompted
the constitution of the NFC is the new tax in the shape of GST on
services, seen a source of revenue generation with some potential.

Unconfirmed initial reports indicate that an amount of Rs83 billion
will have to be officially managed to put the district governments
in place under the fresh mandated responsibilities. An independent
study by Dr Aisha Ghaus and Dr Hafiz Pasha estimates that the
combined expenditure budgets of all district governments will soar
to Rs130 billion from the current Rs40 billion.

Since the local self-governments work within the provincial
framework, it could mean provincial transfers of Rs90 billion or 40
per cent of the combined provincial budgets to these institutions.
The current resource position of the provincial governments would
not permit any meaningful transfer of funds to the local

Sources said the local self-governments may be funded in different
ways: They can be given taxation powers to sustain financial
autonomy, which appears to be unlikely in the current political and
fiscal context, though their taxation powers may be enhanced.
Federal and provincial transfers can, however, help the districts
in self-financing of their expenditures and development
requirements. The transfers can be in the form of sharing of tax
revenues and grants to serve as financial equalizers to help less
developed districts catch up with the relatively affluent ones.

As provincial finance commissions (PFCs) are proposed to be set up
on the pattern of NFC, there is enough indication that tax revenues
of the provincial governments and local taxes may be pooled to be
shared between provincial and district governments. Federal
transfers to the provinces may be hiked up to facilitate funding of
local governments. "Virtually, all social services and a major
component of social and community services, which are currently the
responsibility of the provincial governments, are proposed to be
transferred to the district governments", says Dr Pasha.

The World Bank has advised Pakistan to restrict district government
responsibilities to existing functions for a kick- start. The
advice has gone unheeded.

Officials anticipate that the employees of the Sindh government
would also be transferred to the district governments. It would
mean some cost cutting for them. Similarly, there are reports that
the federal government is also considering to shed some of its
responsibilities that duplicate the efforts at the provincial
levels. Current thinking is that health, education, agriculture,
culture, tourism and social development should not be handled at
the federal level.

Sources said Sindh was now carrying out an exercise to determine
the size of funds that would be required to run the district
governments. Estimates are being compiled for local and provincial
taxes collected in each district and the expenditure needs of each
of them.

Experts say that since the experience of sharing of revenue between
the provincial and local governments has so far been restricted to
urban immovable property tax, the composition of the divisible pool
managed by the proposed PFCs will have to be carefully worked out.
Fifteen per cent property tax is retained by the provincial
governments. The financial autonomy to the local governments has to
a great extent been eroded by the abolition of octroi/zila tax.

When compared to terms of reference of the 1996 NFC, the new
commission's mandate differs in two major aspects: (a) GST on
services; and b) review of distribution of share of taxes to
sustain fiscal discipline at the federal and provincial levels and
ensuring consistency in maintaining an appropriate fiscal balance
at the consolidated level.

The question of appropriate consolidated fiscal balance has been a
priority issue with the IMF. Now, the Fund is going to monitor and
hold dialogue with the provincial governments on issues of its
concerns and it will not restrict its negotiations to the federal

The inclusion of GST on services in the NFC terms of reference
(TOR) indicates that the federal government not only wants to
retain but tighten its hold on the purse strings. As agent of the
provincial governments, the net proceeds after collection charges,
should have been distributed on the basis of actual receipts for
each province. First, a decision has been secured that the
distribution will be on the basis of population ratios for a period
of one year.

The next step is to consider the inclusion of GST proceeds from
services in the divisible pool, to be shared between the federation
and the provinces on whatever basis is recommended by the new
commission. The current ratio is: 62.5:37.5.

The provision in the 1990 award, that collection of net sales tax
at retail level should be entrusted to the provinces, was removed
in the 1997 award.

Rs90.3 billion paid to HUBCO
Staff Reporter

LAHORE, Aug 5: An amount of Rs 90.33 billion had been paid to HUBCO
by WAPDA as a cost of energy purchased during the past three and a
half year, a spokesman of WAPDA said here on Saturday. Denying
HUBCO's allegation of non-payment of dues, the spokesman said WAPDA
had never defaulted on payments to HUBCO. As far as payment of
capacity charge was concerned, he said WAPDA had been paying to
HUBCO an amount fixed by the Supreme Court.

The spokesman said that during the year 1996-97 HUBCO was paid over
Rs.22 billion for 5.9 billion units (Kwh) of energy at the rate of
Rs4 per unit which was equivalent to US cents 10.585 per unit.
During the year 1997-98, over Rs.27 billion were paid for 5.78
billion units of energy at the rate of Rs.4.68 per unit which was
equivalent to US cents 11.32 per unit. During the year 1998-99, the
Capacity Payment to HUBCO was capped on the orders of the Supreme

He said that unlike all other IPPs who are paid the Capacity Price
Component in the subsequent month, HUBCO is being paid in advance
for each month. He said WAPDA had purchased 24 billion units of
power so far at an average rate of about Rs.3.36 per unit which was
equivalent to US cents 8.50 per unit. The rate of HUBCO electricity
without the Supreme Court cap would have been over US cents 10 per
unit. WAPDA has also paid an amount of over Rs.1.77 billion in
respect of the GST claim of HUBCO which was not covered under the
PPA between WAPDA and HUBCO as such, the spokesman added.

Wheat dues to be deducted at source
Staff Correspondent

ISLAMABAD, Aug 5: The Centre has told the provinces that it will
deduct at source an amount of Rs15.84 billion on account of
imported wheat supplied to them during the last couple of years.
The federal government says that despite its repeated reminders the
provincial food departments have not yet paid their outstanding

Official sources told Dawn here on Saturday that the center had
directed the Punjab, NWFP, Sindh and Balochistan to fix the final
date for the payment of the same. The federal government, in this
connection, had written letters to the provincial food secretaries.

Earlier, the federal directorate of accounts, Karachi, had
recommended to the government to recover the amount at source. In a
letter to the government the directorate had pointed out that
despite its repeated reminders, the provincial authorities were not
ready to pay their dues, the sources said.

Meeting on turnover tax
Staff Correspondent

ISLAMABAD, Aug 6: The government-traders talks for finalizing a
retail tax formula will be held in Islamabad on Tuesday, with the
government side having accepted all other demands of trade bodies
except for reducing the turnover tax rate from 2 to 0.5 per cent,
sources said.

Talks between the two sides broke down on June 26, however, an
informal round of overtures took place and the trade bodies asked
for a pre-negotiation assurances with regard to acceptance of their

The trade bodies had submitted a charter of demands on July 26,
which received a "positive response" from the government
negotiators. However, there could be no agreement on the rate of
turnover tax, leading to suspension of the talks.

Dawn has been informed by the government officials that the CBR has
chalked out a new retail and wholesale tax policy package for a 12-
month period. This package would be offered to the trade bodies
next Tuesday at a meeting in Islamabad. It does not satisfy the
traders' demand for reducing the turnover tax rate, however, the
CBR sources said, this issue would be "amicably settled during the
Tuesday talks".

The package envisages that 3.5 per cent of the retailers' stocks
would be subject to standard rate of income tax (not 2 per cent as
demanded by traders), plus 2 per cent turnover tax. The wholesalers
too would have to pay 2 per cent turnover tax. However, regarding
wholesalers' income taxable stock-volume's benchmark remains
undecided. "A final decision in this respect will be taken in
consultation with the trade bodies", said official sources.

Stocks finish on easy note

KARACHI, Aug 11: Stocks finished the weekend session on an easy
note as late profit-selling in some of the leading shares by
jobbers and day traders halted the market's initial run-up aided by
reports of an imminent promulgation of privatization ordinance. The
KSE 100-share index was off 5.55 points at 1,569.05

But at no stage the underlying sentiment demonstrated that the
upward thrust is overdone as the promulgation of the ordinance on
Aug 17, which will hasten the sell-off of the state-owned units did
not allow them to keep off the market.

"The promulgation of the ordinance is expected to give the much-
needed strength to the market as it will provide an attractive bait
to both- genuine investors and speculative forces", brokers said.

After opening the conference of South Asian Federation Exchanges
(SAFE) on Thursday finance minister, Shaukat Aziz disclosed that
the government wants to sell all the about five dozen public sector
units before the year is out and the ordinance will provide the
legal cover to the foreign buyers.

"The news was well-received in the market as investors rushed to
corner the shares of mega energy shares including PSO and Sui
Northern at the current lower levels for capital gains", stock
brokers said, adding "an increase of 10 points in the KSE index
reflected that investors are back in the rings with big fresh

The market always at the look out of fresh stimulants turned in an
improved performance at the weekend session, which generally induce
selling from the day traders and jobbers as well.

"The market appears to be inching up to find a direction for itself
in the backdrop of changing corporate scenario", they said adding
"the news of privatization could lend it the required strength to
behave orderly".

The general perception is that the government will go all out to
hasten the process of privatization, notably of mega issues such as
HBL, UBL, PSO and Sui Southern as it needs money to retire in part
foreign debt of $32 billion.

"What seems to have enthused investors is that 10 per cent shares
of each company will be disinvested through the stock exchanges and
they are taking position in them," said a member of the KSE.

It was perhaps in this background that investors opted for new
buying at the weekend session, keeping the market in a good shape.
Bulk of the buying was, however, confined to pivotals such as PTCL,
PSO, ICI Pakistan, World Call Payphone and Sui Nothern.

Unlike the previous sessions, price changes either-way were
fractional and reflected a status quo between the bulls and bears,
considered to be a good thing for the market.

However, some of the leading shares managed to put on fresh gains
under the lead of Shell Pakistan, which has lost a substantial
ground owing to last couple of days persistent selling, Ferozsons
Lab, Kohinoor Weaving, National Refinery and A.A.Textiles, up by
Rs1.40 to 2.50.

Leading losers were led by Packages, BOC Pakistan, Pakistan Cables,
Ghandhara Diesel, Din Textiles, Bhanero Textiles and Gulshan
Spinning, falling by one rupee to Rs3.00.

The largest fall was, however, again recorded in Millat Tractors,
which suffered fresh sharp decline of Rs5.30 on reports that it has
stopped production owing to a dispute with the CBR on deletion

Trading volume fell to 122m shares from the previous 124m shares as
losers held a modest edge over the gainers at 131 to 73 on late

PTCL topped the list of most actives, lower 25 paisa at Rs26.05 on
34m shares followed by Hub-Power, up 35 paisa at Rs16.80 on 21m
shares, FFC-Jordan Fertiliser, off 60 paisa at Rs8.00 lon 9m
shares, Sui Northern, up 50 paisa at Rs15.55 on 8m shares and PSO,
higher 30 paisa at Rs175.50 on 7m shares.

Other actives were led by Lucky Cement, off 35 paisa on 6m shares,
KESC, easy 15 paisa on 5m shares, WorldCall, off 60 paisa also on
5m, Bank of Punjab, lower 20 paisa on 4m shares, ICI Pakistan, easy
five paisa on 3m shares, Askari Bank, up 20 paisa on 2.583m shares
and Adamjee Insurance, off 55 paisa on 2.384m shares.

DEFAULTER COMPANIES: Colony Textiles came in for active support at
the lower levels and was marked up by one rupee at Rs3.50 on 3,000
shares, followed by Allied Motors, unchanged at Rs1.50 on 2,000
shares and Shahpur Textiles, lower 20 paisa at Rs.1.20 on 1,500

RIGHT SHARES: The board of directors of Pakistan Tobacco Co has
announced to issue right shares at the rate of 700 per cent for the
year 2,000.

Back to the top
Progressive Pakistan
Ardeshir Cowasjee

IN the early 1970s, our then worthy President, the great leader of
the awam "had given directives to the Government of Sindh that
development in Karachi should take place in a planned way and no
effort should be spared to ensure recreational facilities for the
people of Karachi...".

"One of the special assignments over the re planning of Kehkashan,
KDA Scheme No.5, Clifton, was the prime objective of developing it
as a recreational complex.... It is a matter of satisfaction that
the Town Planning Department of KDA has studied the problem in
depth and come out with a Revised Concept Plan fulfilling the broad
objectives in view. The revised scheme was presented to the
President on December 5, 1972 and was finally approved by him for

So read the foreword to a colourful brochure presented by Sindh's
minister of housing and town planning, formidable devastator Jam
Sadiq Ali of Sanghar to the peoples' president Zulfikar Ali Bhutto.

The scheme reserved an area of 132 acres for the main park of the
city, which was to extend down to the sea from the parade built by
that generous Parsi philanthropist Jehangir Kothari, and it was
named Bagh-i-Ibn-Qasim. The acreage was to contain amusement parks,
recreational facilities, restaurants, refreshment stalls, swimming
pools, ponds, rock and formal gardens, fountains and roller skating
rink. Space was also reserved for the construction of a revolving
restaurant atop an observation tower.

Ever since the inception of this scheme it has been beset by
marauding builders and unscrupulous developers ably assisted by our
successive corrupt governments whose last thought has been for the
preservation of the environment of the city or for the benefit of
its people. The land use of many an amenity plot, or plots reserved
for parks and public buildings, has been widely arbitrarily and
illegally changed. Residential areas have been wholly
commercialized and in flagrant violation of all rules and
regulations highrises and shopping complexes have arisen where they
were never intended to rise.

Large scale irrevocable damage was done between 1988 to 1990 during
the second PPP government under Benazir Bhutto, the daughter of the
peoples' president. The blame for the wholesale desecration of
Karachi must lie squarely on her head, that of her husband and of
his crony Agha Siraj Durrani appointed as minister of housing and
town planning.

After the elections that followed the first dismissal of Benazir,
President Ghulam Ishaq Khan appointed as chief minister of Sindh
the man wanted by the Zia government for his many crimes who had
been brought back from exile, the Jam of Sanghar. Jam was a
likeable rogue and when I complained to him about his
indiscriminate validation of all building permissions which had
been invalidated, noting on all the files TDo so as a special
case.' He used to tell me that I would remain for ever a fool and
point to a loaded brief case and with a loud guffaw explain, that
is a special case !"

During Benazir's first round, the Bagh-i-Ibn-Qasim space reserved
for constructing the observation tower with its revolving
restaurant on top ended up by being allotted to Asif Zardari's
cronies, Dr Zulfikar Mirza and his relatives and members of the
Kazi Abid family. They decided to build a highrise complex and the
drawings showed a restaurant of sorts perched thereon. Barrister
Naim-ur-Rahman was aroused, the people went to court, starting with
the Sindh High Court and moving on to the Supreme Court. After a
nine year fight, it was in 1999 that the Supreme Court finally
decided that the highrise complex could not be constructed on the
observation tower plot and that what had been built should be
demolished. The builders were given the option to provide a design
for the construction of a proper tower. This they have done, trying
to save what has been built, but it has not been approved by the
present government. Orders have been passed for the demolition of
what stands, but this has not been started as various excuses have
been brought into play.

The sketch drawn to scale shows what the world has done by way of
constructing observation towers: Silhouette 1, the 553 metre CN
Tower, Toronto; 2, the 540 m. Ostankino Tower, Moscow; 3, the 450
(not 540 as marked in the sketch) m. Petronas Twin Towers, Kuala
Lumpur; 4, the 443 m. Empire State Building, New York ; 5, the 421
m. KL Menara Tower, Kuala Lumpur ; 6, the 375 m. Tashkent Tower,
Tashkent; 7, the 368 m. Fernsehturm, Berlin ; 8, the 350 m.
Stratosphere Tower, Las Vegas ; 9, the 333 m. Tokyo Tower, Tokyo;
10, the 320 m. Eiffel Tower, Paris ; 11, the 304 m. Sydney Tower,
Sydney; 12, the 290 Olympia Tower, Munich ; 13, the 288 m.
Barcelona Tower, Barcelona; 14, the 253 m. Rialto, Melbourne; 15,
the 252 m. Donauturm, Vienna; 16, the 237 m. Seoul Tower, Seoul;
17, the 200 m. Cancun Tower, Mexico; 18, the 195 m. Telecom Tower,
Canberra; 19, the 189 m. BT Tower, London; 20, the 185 m. Euromast,
Rotterdam; 21, the 181 m. Latinoamericana, Mexico; 22, the 175 m.
Olympic Tower, Montreal; 23, the 158 m. Blackpool Tower, England;
24, the latest design submitted by the builders, the 33 m. Costa
Livina Tower, Progressive Pakistan.

Yet another wonderful wonder of wondrous Pakistan, hereunder a
transcript of a letter emanating from the "Government of Pakistan,
Islamabad, No.951-FM/2000, dated 10/3/2000, from Shaukat Aziz,
minister for finance & economic affairs to Air Marshal (R) Azeem
Daudpota, Governor of Sindh, Karachi.

Dear Mr Governor

I am writing with reference to our telephonic conversation of today
on the subject of regularization of incomplete building plans and
structures in Karachi.

2. As I discussed with you, the Association of Builders and
Developers, in their meeting with me, estimated a recovery of about
Rs.2 to 3 billion in fines and fees if work is allowed to proceed
on under-construction buildings and structures in Karachi by
resolving outstanding objections to the violation of building plans
and bye-laws. I appreciate that such a review will have to be
carried out on a case to case basis and that gross and blatant
violations will have to be treated separately. But I would propose
that the exercise is carried out with a view to moving forward in
completing the building works lying incomplete and recovering
substantial revenue in the process by invoking appropriate
penalties under the law. I also expect that reactivating
construction work will generate considerable employment in the
urban sector.

3.To demonstrate their earnestness in depositing the imposed fines
and penalties the Association has proposed to place in advance in
an escrow account with an acceptable bank a sum of Rs.250 million
after which their proposal will be considered.

4. �The Chairman of the Association would also like to call upon
you in Karachi to assure you of their commitment."

Drones and brahmins
Ayaz Amir

HALF the world's discontent flows from brahmins and failed artists
who, while having no vocation for work of any steady kind, are
consumed by a craving for power. This they satisfy by choosing two
of the glittering careers open to the "ambitious but lazy second-
rater": politics and journalism (the words in commas being Gore

The politician must get office or, if like Nawabzada Nasrullah Khan
he has a gift for agitation, he must get a platform from where to
harangue the world. Deny him office or the stage and you have a
malcontent on your hands, forever dissatisfied with the universal

The journalist craves recognition, which can take either of two
forms: adulation or dinner invitations. Provided he gets these, he
is satisfied with himself. If he is more lucky and becomes a
pundit, with a regular column to himself and able to vent his
spleen (a gift which does not come readily to everyone), he has
risen to the heights of his profession. Ambassadors call him,
politicians on the make seek him out for his opinion and he is
generally made much of in the charmed circles in which he moves.

Sometimes a politician rises above the pack and becomes noticed for
his distinction and intelligence. But such cases are rare. Politics
requires a certain amount of hard talent not brilliance.
Politicians must have an eye for the main chance, an instinct for
the jugular. Which is to say they must know when to make a move,
when to shift with the wind. Without this touch they will be
missing the tide all the time (and quoting Shakespeare into the

But politics does not call for original thought. In fact, to be
able to think for oneself is often a grave disadvantage in politics
for it sows doubts in the mind and makes one cautious. Benazir and
Nawaz Sharif, despite their current disabilities, are successful
politicians. Nor should this be surprising: "...the most effective
men (and women) of action are often intellectually second-rate."

This applies to other climes as well. George W. in the US and Al
Gore: not everyone's idea of original thinkers. Yet no one dare
call them unsuccessful. It is a middle class conceit to shower the
politician with contempt, an attitude flowing quite often from
envy. It is like our attitude to money. If we do not have enough of
it ourselves we make a virtue of idealism which, in the words of
David Landes (The Wealth and Poverty of Nations--brilliant book),
"...is the affectation of those who feel they have less than they
deserve in the presence of those who have more." I myself am guilty
of a lot of idealism.

I think we have it wrong about the oldest profession. How could it
come first? Put people together and the first thing they
instinctively want is order and power and the creation of a
hierarchy which places the strong above the weak. What else is
politics? Everything else comes thereafter.

Closely connected to politics is self-promotion which is nother
name for journalism. In any honest rendering of human history these
would have to be the first professions. And since men (and women)
become tired of too much order and prudence they have from the
beginning sought release in 'frenzy' and 'madness'--the madness
which comes, not to put too fine a point on it, from the fruit of
the vine. This is where the saloon-keeper comes in. After politics
and self-promotion must have come the timeless art of the
bartender. Call this art what you will: Bacchic ritual, Dionysian
frenzy, bacchanalian orgy, or, in our less happy times, a night out
with the boys. It has been an essential part of human existence.

Here's another quote from Russell which I cite more for resonance
than relevance: "Much of what is greatest in human achievement
involves some element of (mental) intoxication, some sweeping away
of prudence by passion. Without the Bacchic element, life would be
uninteresting; with it, it is dangerous. Prudence versus passion is
a conflict that runs through history." In Pakistan this conflict
has been won conclusively by prudence. Look not for passion in our
works or our politics. But what a dry prudence we have crowned
which produces neither thrift nor prosperity?

Am I mixing up my history of the world? I think so, for where does
the musician, the potter and the wandering poet fit in it? But I
was not striving for accuracy, merely trying to accord politics and
journalism their proper places in the human pantheon.

In a beautiful essay Charles Lamb says the two races of men are
lenders and borrowers - the former worn by care, the latter
pictures of fun and gaiety. Perhaps this theory could be improved
upon. The human race today is split between drones and brahmins:
those who have to work for a living - professionals, bankers, men
of enterprise, captains of commerce and industry, professors of
academe, etc; and those who are artists to varying degrees - poets,
writers, conmen, charlatans, politicians and journalists.Provided
they have a good liver, a more vital adjunct to happiness than
anything else in the world, the brahmins get more out of life - zap
and plain fun. But the proviso is important. Without good digestion
nothing tastes well, not even love. Falstaff's zest, Pistol's
braggadocio, Sir Toby's carousing: all based on hearty eating. Even
Ghalib, I suspect, would not have been the man he was if he could
not have put up with excess.

 I have been cursed with a weak liver which makes this one of my
favourite verses:

Hai Seemab us kee majboori,

Jis ne kee ho shabab mein tauba.

The spirit willing, nay eager; the flesh weak. Can a more
malevolent fate befall mortal man?

Military rule is a mixed blessing. While it encourages conmen,
charlatans and those laying claim to sure remedies for the human
condition, it kills the other brahminic professions like politics
and journalism. While speaking of the ill-effects of military rule
we tend to stress tangible things - that institutions, etc, are
adversely affected. But more harmful than this is the psychic and
spiritual effect of any dispensation which stresses conformity - in
other words, prudence - and frowns upon the disorder of free
expression and behavior - in other words, passion. Before Pakistan
could get over the bad memories of the Ayub and Yahya Khan eras it
got Ziaul Haq. Before it could truly get over him, it has got
another dose of military rule.

But one should count one's blessings and be grateful for small
mercies. For one, journalism continues to flourish even if, and I
am sure this feeling is widely shared, newspapers are serving
weaker and colder porridge. For another, politicos can still issue
statements (much the better part of Pakistani politics) and secure
their names in print. Which means that despite everything, the
brahminic professions remain alive even if after ten months they
show signs of exhaustion.

I count myself lucky even if my sense of good fortune is laced with
regret. Ensconced in Chakwal, I cultivate my small patch of
brahmanism away from the hurly-burly of big town life. Many things
I wanted I have got but a bit late in the day. When I wanted some
things badly the means were not at hand. When in the afternoon of
my life I have the means, I find my appetite gone sickly. Which is
a variation on what Proust said: "Everything comes about just as we
desired, but only when we no longer desire it."

Moin pulls out of Singapore series
Sports Reporter

KARACHI, Aug 10: Moin Khan pulled out of this month's Singapore
triangular series leaving Azhar Mahmood as the frontline candidate
to lead the national side.

The 29-year-old wicketkeeper told reporters at the National Stadium
that he had communicated his decision to the Pakistan Cricket Board
(PCB) chairman Lt Gen Tauqir Zia earlier in the day. "The general
was generous enough to understand my position. I trained for two
days but the pain is still there. I don't want to aggravate the
injury which could risk my participation in the other future
commitments," Moin said.

Moin's withdrawal is likely to hand Azhar Mahmood his first term as
captain. Although the team and the captain would be announced on
Saturday at the National Stadium, sources said the decision has
already been made keeping in mind the future.

"Azhar Mahmood will also have a taste of captaincy so that he can
be handed over the team in future. A captain has to be groomed
because Moin was the last choice the board had which it availed,"
sources said.

Moin said he would require another two weeks to regain complete
fitness. He said he has been in constant touch with former Pakistan
team physiotherapist Dale Naylor and had been informing of his

He said Naylor had indicated to him when he went for treatment in
England that he wouldn't make it to the Singapore tour. "I was
hoping against hope to get fit in time and return to the arena.
Unfortunately, I have lost the race against time. I will, however,
continue my training as advised by the physio and my specialist."

Moin said with most of the star players not available for the
Singapore series, it would provide an excellent opportunity for the
youngsters to get international exposure. He said the youngsters
have already outnumbered the seniors but they still lacked
experience. He was, however, confident that this series would be a
great learning experience for them.

"South Africa and New Zealand are tough opponents. And there is a
great opportunity for the youngsters to perform against them and
cement their places in the team," he said.

Malik replies to show cause notice
Sports Reporter

KARACHI, Aug 7: Former captain Salim Malik has claimed in his
seven-page reply to the show cause notice that there was no legal
or factual basis for banning him for life and imposing a cash
penalty of Rs one million.

According to the copy of reply to July 19 show cause notice issued
by the Pakistan Cricket Board (PCB), Malik has also stated that he
has not been given equal treatment under the articles 4 and 25 of
the constitution and has been made a scapegoat because he was no
longer good enough to represent Pakistan.

Malik, who has hired former Governor of Punjab Shahid Hamid as his
counsel, while stressed that the PCB had no authority under the law
to impose any of Justice Malik Mohammad Qayyum's recommendations,
has urged the cricket establishment to withdraw the penalties and
award him an opportunity to be heard in person and through his
legal advisor.

The PCB has forwarded Malik's reply to Naveed Rasool, former board
legal advisor who is now evaluating assets of the players besides
helping the board in other legal cases related to betting and

Malik argued in his reply that he has been victimized because even
though evidence against him and Wasim Akram were identical, he has
been banned while the pacer continues to play for Pakistan. "Please
compare the allegations against me and my dear brother Wasim Akram.
Then compare the allegations against both of us and finally compare
the findings and recommendations. "I am not to be denied equal
treatment and discriminated against simply because I am no longer
good enough to be the member of the Pakistan team while another of
my respected colleague (Wasim Akram) still has the skills and
caliber required for selection," Malik writes in his reply dated
Aug 2.

Malik, while citing extracts from Justice Qayyum's report, pointed
out that the inquiry commission of Justice Qayyum ignored the
settled law and the internationally recognized legal principle that
an accused person is entitled to the benefit of every reasonable
doubt and is not to be condemned on the testimony of self-confessed
habitual gamblers who have taken bribes/presents from bookies and
frequently consort with them.

Malik was referring to the allegations of Australian Mark Waugh and
Shane Warne who accused the Pakistani of offering them bribes
during the first Test of the 1994 Test series in Pakistan. The
Australian Cricket Board (ACB), in 1998, admitted that it secretly
fined the two for accepted money to provide weather and pitch
report in September 1994.

"The IC (inquiry committee) should not have believed Shane Warne's
testimony because of the admitted position that he himself is a
self-confessed habitual gambler; because he took bribe/present from
a bookie; because it is the case of his words against mine and his
word is that of a self-confessed gambler. "The IC should not have
believed Mark Waugh because again it is a case of his word against
mine and his word is that of a self-confessed gambler who has
admittedly taken a bribe from a bookie and remained in
constant/frequent touch with him (bookie)."

Malik contested that there were four specific allegations of match-
fixing against him and he has not been found guilt in two of them.
He said on the third charge, the IC has not given any finding as
the IC as not yet been able to examine one Aftab Butt.

On account of the fourth charge, Malik continued, he has not been
found guilty but "attempting to fix the first Test match (against
Australia in 1994)". "Is it not ironical that the one allegation
�of which I have been convicted' is not that I was trying to make
Pakistan lose but that I tried to ensure Pakistan's victory."

'Life ban on Malik not to be revoked'
Sports Reporter

KARACHI, Aug 10: A top Pakistan Cricket Board (PCB) official has
said that even if Salim Malik goes to the Supreme Court, the life
ban imposed on him would not be reversed.

Website total-cricket.com quoted PCB chairman Lt Gen Tauqir Zia as
saying: "Withdrawing the life ban on Salim Malik is out of
question. It is based on the recommendations made in the Justice
Malik Mohammad Qayyum report made on the basis of strong evidence.
Malik can go to the Supreme Court of Pakistan if he likes to but
the ban cannot be revoked."

Salim Malik, banned for life and fined Rs one million after being
found guilty of match-fixing, earlier this replied to the PCB show
cause notice and urged the establishment not to deprive of his

The PCB has forwarded Malik's show cause notice to Naveed Rasool,
former PCB legal advisor who is now investigation players assets
besides reviewing Justice Qayyum's report.

The general, commenting on Malik's contest that Wasim Akram has
been left off despite the fact similar charges were investigated
against him, said: "In his (Wasim Akram's) case, no evidence has
been produced.

"In the beginning, Ata-ur-Rehman did submit an affidavit saying
that he was offered money by (Wasim) Akram to play below par.
Later, he backtracked from the same and we didn't have any grounds
on which to implicate Akram."

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