------------------------------------------------------------------- DAWN WIRE SERVICE ------------------------------------------------------------------- Week Ending : 02 December 2000 Issue : 06/46 -------------------------------------------------------------------
Contents | National News | Business & Economy | Editorials & Features | Sports
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CONTENTS ===================================================================
NATIONAL NEWS + Deduction from F-16 money shocks CE + Govt attempts to put blame on Nawaz over F-16 money loss + NWFP preparing hydro-power policy + Lone calls for tripartite talks + LB polls in 18 districts on 31st: Results on Jan 6 + Export to Afghanistan, CARs in forex allowed + Saifullah convicted in Ehtesab reference + Pakistan recalls envoy from Dhaka + Pakistan receives BD govt's protest note + GDA inducts PML into its fold + Rs10 billion losses, fraud detected: NAB to investigate cases + Tarar asks India to respond to talks offer --------------------------------- BUSINESS & ECONOMY + IMF wants Pakistan to cut debt by June + CE to be briefed on new farm policy + Liquid forex reserves shoot up: IMF tranche + Sugar mills: Operations cease at beginning of crushing season + World Bank likely to offer additional funding + ADB to provide $52 million to help women farmers + 3rd phase of tax survey from 4th December + Asian Development Bank loan for farm sector + No political terms set, says WB + PTCL announces higher dividend on lower profit + World Bank assures 'special funding' to CBR + CBR issues one million NTN certificates + CBR seeks access to computer records --------------------------------------- EDITORIALS & FEATURES + Education, education, education Ardeshir Cowasjee + A penchant for sticking it in the mouth Ayaz Amir + Concept of secularism Irfan Husain ----------- SPORTS + Miandad confident of winning second Test + Pakistan tour: BCCI asks govt to reconsider decision

Deduction from F-16 money shocks CE
Rauf Klasra

ISLAMABAD, Nov 30: Chief Executive Gen Pervez Musharraf summoned 
the finance minister and top officials of the finance ministry, 
foreign affairs, agriculture and economic affairs ministries for an 
emergency meeting here on Friday to discuss the F-16 vs wheat 
fiasco, as disclosed by Dawn on Thursday.

The fact that Washington had deducted $60 million from the F-16 
account was not disclosed to the chief executive in September and 
Gen Musharraf was reported to be furious on Thursday when he learnt 
about such a major development through the press.

Top finance ministry sources told Dawn on Thursday that Finance 
Minister Shaukat Aziz and Foreign Minister Abdul Sattar had been 
directed to bring all the relevant record of the F-16 settlement 
with the US government and brief the CE comprehensively.

Finance Secretary-General Moin Afzal, Agriculture Secretary Dr 
Zafar Altaf and the secretary of the economic affairs division, 
Nawaid Ahsan, have also been asked to attend the meeting.

Sources at the chief executive's secretariat said Gen Musharraf 
could not believe that the finance and foreign ministries had 
signed such a one-sided agreement with the USA without taking him 
into confidence.

One ministerial-level source, who was present at the meeting last 
March between Gen Musharraf and President Bill Clinton, recalled 
that Gen Musharraf had specifically requested the US president for 
the return of the F-16 money in cash and had been assured that the 
request would be considered.

But without the chief executive's knowledge, officials of the 
foreign ministry and the finance ministry signed the agreements 
with the US for the payment to be made in the shape of commodities. 
And none of the three ministries involved in the deal - foreign 
affairs, finance and economic affairs - cared to inform the CE's 
secretariat. Even the Pakistan embassy in Washington did not pass 
on the information to the CE. 

 The sources, however, said that before the singing of the 
agreement with the US early June the economic affairs division had 
sent a note, dated June 12, 2000, to the finance minister seeking 
his approval for the new arrangements.

According to the copy of this note available with Dawn, the finance 
minister was told that the US government on April 6, 2000, had 
offered 240,000 tons of wheat with C&F value of $54 million (wheat 
value $30 million and freight $24 million), 50,000 tons of soyabean 
and 50,000 tons of soyaoil valued at $42 million during US FY 2000.

In this offer, made under US PL-416 (b) programme, the cost of 
wheat was worked out on the basis of average procurement prices of 
the US government and a freight rate of $100 per ton, both of which 
exceeded the international prices by a wide margin.

The economic affairs division said the US government had requested 
Islamabad to finalize agreement on this PL-480(b) programme by Sept 
30. This offer was part of the repayment to the government of 
Pakistan under the agreement signed by Pakistan and US on 18-12-
1998 for the settlement of the F-16 repayment, the economic affairs 
division said.

The economic affairs division note pointed out that it was agreed 
in the agreement that the US government would provide Pakistan 
goods and benefit of $60 million in FY '99 and of $80 million in FY 
2000, respectively, in addition to the cash payment of $324 

Govt attempts to put blame on Nawaz over F-16 money loss
By Rauf Klasra

ISLAMABAD, Dec 1: Chief Executive Gen Pervez Musharraf was informed 
by the foreign and finance ministers on Friday that the loss 
suffered by Pakistan in the wheat against F-16 scandal was mainly 
because of a one-sided agreement signed by the ousted prime 
minister, Nawaz Sharif, in December 1998.

This convenient explanation was given to Gen Musharraf despite a 
revised agreement signed by the two concerned ministries in 
September this year which basically conceded linkage of the wheat 
received by Pakistan as aid to the F-16 account.

Foreign ministry sources revealed that all the officials summoned 
by the chief executive on Friday to discuss the scandal had decided 
to shift the blame of the loss to the previous government, although 
documents show the deduction of $60 million from the F-16 account 
was conceded by the present government in September.

No official statement was issued by either the chief executive 
secretariat or the finance or foreign ministries about the meeting 
but sources said the issue was quickly brushed under the carpet and 
everybody started congratulating each other on the IMF package.

Attempts by Dawn to get an official version of the meeting from the 
foreign ministry, the finance ministry, chief executive secretariat 
or the press information department (PID) did not bear any fruit 
until late Friday night.

The finance ministry spokesman, Dr Waqar Masud, when contacted by 
Dawn, said: "Yes, the meeting was held today to discuss the F-16 
issue, however, I did not attend the meeting and can not make any 
comment on it."

The emergency meeting, presided over by the chief executive, was 
attended by Foreign Minister Abdus Sattar, Finance Minister Shaukat 
Aziz, Agriculture Minister Khair Mohammad Junejo, secretary-general 
finance Moin Afzal, finance secretary Younis Khan, foreign 
secretary Inamul Haq, agriculture secretary Dr Zafar Altaf and 
economic affairs division secretary Nawaid Ahsan.

More details, obtained by Dawn through documents made available by 
the foreign ministry sources, showed the September last agreement, 
signed by the foreign and finance ministries, conceded extravagant 
freight rates of $80 a ton as against the prevalent market rate of 
$27 per ton of wheat.

Thus while under the normal conditions the freight cost would have 
been about $11 million, Pakistan was charged $32 million.

Not only this, Pakistan also conceded in September that the 
remaining $80 million, out of the total $140 million due in the F-
16 account, would also be received not in cash but as commodities 
and that too under rules governing the US aid PL-480 and PL-416 

The sources said that this would mean another huge loss of millions 
of dollars to be paid in extra shipping charges to the US 
companies. Pakistan was actually paying its own hard currency to 
buy the soyabeans and soyaoil.

The US government would even charge exorbitant prices for these 
commodities, much higher than the prevailing global market rates. 
Both the agriculture ministry and economic affairs division had 
protested over these high costs of shipment.

According to documents available with Dawn, these protests were 
conveyed to the US authorities but were rejected.

Documents reveal that under the September agreement, out of the 
remaining $80 million, the US will deduct $24 million as shipment 
charges for the import of 210,000 tons of soyabeans.

Sources at the chief executive secretariat said the foreign 
minister briefed Gen Musharraf about the F-16 deal and put the 
whole blame on the shoulders of the jailed prime minister, Nawaz 
Sharif, who had signed an agreement with Bill Clinton during his 
meeting in White House on Dec 2, 1998.

These sources said the foreign minister conveniently avoided any 
mention of the September deal and Gen Musharraf was informed that 
after the Dec 2, 1998 meeting between Mr Sharif and President 
Clinton, Pakistan could not raise the issue again with the US 

It was decided that the issue be dumped and Pakistan be content 
with whatever it had received so far as it was feared that further 
probe into this issue could damage relations between the two 

Sources said the meeting was also told that Pakistan's ambassador 
to the United States Dr Maleeha Lodhi had also sent a wire message 
to the foreign office to know the latest situation in Islamabad on 
the issue.

NWFP preparing hydro-power policy
Intikhab Amir

PESHAWAR, Nov 30: The NWFP government is preparing a draft policy 
for exploiting the province's potential in hydro power sector as a 
cheap source for industrial development, official sources told 

Under the policy, sites would be identified for the installation of 
small hydel power generation stations on the upper Swat Canal 
(Machay branch) for the interested private sector parties.

Some 25 to 30 water fall sites, on the Machay branch, have been 
identified. Initially, three would be offered to the interested 
parties for developing small hydel power stations and industrial 

The power stations and industrial units would be set up by the 
interested parties concerned on 100 per cent investment basis. 
Whereas, the electricity generated therefrom would be brought under 
use only for industrial purposes and could not be supplied outside 
the premises of the unit.

The power generation capacity of each of the power station would 
range from half to five megawatts. These sites would be offered to 
the private sector on lease.

Main objectives of the policy include: 1) to utilise the NWFP's 
hydel power potential and 2) to encourage industrialists to develop 
their own power generation units, which would be cost effective in 
comparison with the electricity rates being charged by the WAPDA.

The preparation work on the policy, jointly being prepared by the 
provincial power department, Sarhad Development Authority and the 
provincial irrigation department, is in final stages and it would 
be announced shortly after its approval by the NWFP governor in 
near future, the sources said.

Lone calls for tripartite talks

ISLAMABAD, Nov 30: Khawaja Abdul Ghani Lone, a central leader of 
the All Parties Hurriyat Conference (APHC) has said that any 
solution to the Kashmir issue can be achieved only with the 
participation of all the three parties to the dispute - Kashmiris, 
Pakistan and India.

Talking to a select gathering at the Institute of Policy Studies 
(IPS) here on Thursday he asserted that "any attempt to ignore this 
fact is bound to fail".

Mr Lone said Kashmiris pinned great hopes on Pakistan and their 
leadership would never make such a decision that would be harmful 
for Pakistan. 

 Similarly, Pakistan should trust Kashmiri leadership's commitment 
with the cause and ability to negotiate a settlement that is in the 
best interest of the people.

Mr Lone said he met Chief Executive Gen Pervez Musharraf and found 
him to be a "forthright and straightforward man".

"Kashmiri leadership is united under the All Parties Hurriyat 
Conference banner and should ensure that the struggle in Kashmir 
meets its logical end of getting rid of the Indian occupation", Mr 
Lone said.

He said to maintain unity and coordination between political and 
armed struggle was essential for the success of the movement.

In this regard, he said, the APHC formation a few years ago, was a 
positive and bold step after which different parties shunned their 
differences and had been working together.

"The enemy is trying its level best to harm this unity", he stated 
and added, "it is bent upon creating mistrust and division through 
malicious propaganda and mischievous moves".

Those who spoke on the occasion were Dr Rasul Baksh Rais, former 
ISI chief Gen Hamid Gul, former ambassadors, Dr Maqbool Bhatti, Dr 
S.M. Koreshi and Ghayoor Ahmad, former secretary-general foreign 
affairs S.M. Zaki, Ms Shirin Mazari, director-general, Institute of 
Strategic Studies, Dr Kaneez Fatima, Air Marshal (retd) Khuda Dad 
and Kashmiri leaders Prof Ashraf Saraf, Yusuf Nasim, G.M. Safi and 
Altaf Qadri.

LB polls in 18 districts on 31st: Results on Jan 6
Faraz Hashmi

ISLAMABAD, Dec 1: The first phase of the partyless, local 
government elections in 18 selected districts will be held on Dec 
31 and the results will be announced on Jan 6, according to the 
schedule announced by the election commission on Friday.

The EC gave no explanation for the unprecedented gap in the 
announcement of results. However, an EC spokesman told Dawn that 
the commission would issue an explanation later.

He pointed out that the compilation of results in each district, 
where up to a hundred candidates would be running for a maximum of 
21 seats, was going to be a time consuming job.

According to the schedule, returning officers in these districts 
will receive nomination papers from Dec 2 to 5, and objections to 
the nomination papers will be received from Dec 6 to 9.

The nomination papers will be scrutinized from Dec 11 to 16, and 
the preliminary list of the contesting candidates will be made 
public on Dec 16.

The returning officers would receive appeals against the acceptance 
or rejection of nomination papers on Dec 18, an EC press release 
said, adding that the appeals would be heard and disposed of on Dec 
19 and 20.

The last date for the withdrawal of nomination papers has been 
fixed at Dec 21 and the final list of the candidates with the 
symbols allotted to them will be announced on Dec 22.

This will be the first time that 18-year olds will cast vote in an 
election in the country as the government has reduced the voters' 
age-limit from 21 to 18.

There has been a great deal of controversy over the authenticity of 
the voters lists prepared by the National Database and Registration 
Authority. The EC had to withdraw those much publicized 
computerized lists replacing them with the manually-prepared ones.

In the first phase, elections are going to be held in Bannu, Lucky 
Marwat, Dera Ismail Khan and Tank districts of the NWFP; Dera Ghazi 
Khan, Rajanpur, Laiyah, Muzaffargarh, Sargodha, Bhakkar, Khushab 
and Mianwali districts of Punjab; Larkana, Jacobabad and Shikarpur 
districts of Sindh; Kech, Gwadar & Panjgur districts of 

Elections are being held on the Muslim seats for men and women, 
special seats for labourers and peasants, reserved seats for 
labourer and peasant women, and special seats for non-Muslims and 
Nazim and Naib Nazims.

The 23 districts selected for the second phase of election to be 
held in February are: Kohat, Hangu, Karak, Mardan and Swabi in the 
NWFP; Bahawalnagar, Bahawalpur, Rahim Yar Khan, Gujranwala, 
Hafizabad, Gujrat, Mandi Bahauddin, Sialkot and Narowal of Punjab; 
Sukkur, Ghotki, Khairpur, Naushahro Firoz and Nawabshah in Sindh, 
and Naseerabad, Jaffarabad, Jhal Magsi and Bolan in Balochistan.

Export to Afghanistan, CARs in forex allowed
Bureau Report

ISLAMABAD, Nov 27: The economic coordination committee of the 
cabinet approved on Monday the export of cement, rice, 
pharmaceuticals, glass sheets, G.I. pipes and hardware items to 
Afghanistan and Central Asian Republics against irrevocable LCs in 
foreign currency.

There is already no restriction on exports to these countries in 

These items should be zero-rated for sales tax and eligible for 
normal duty drawbacks.

"We have accepted one of the major demands of the Frontier province 
to allow the export of various items via land route", said Finance 
Minister Shaukat Aziz.

He told Dawn that the NWFP businessmen had been given a big favour 
by the federal government and that they should export various items 
without misusing the facility. "Now it is to be seen whether they 
reach to Central Asian markets", he asked.

The ECC meeting, which was presided over by the finance minister, 
also allowed the export of value-added articles, such as doors, 
windows frames, flush doors, panel doors and mouldings, made of 
substance forest woods.

The meeting was told that 96.6 per cent of the revenue target had 
been achieved despite 14.2 per cent more refunds made as compared 
to the last year. The exports were up by 13.4 per cent in terms of 
value and imports by 15.1 per cent.

The ECC took note of the trend in prices of sugar, tomato and tea. 
It was informed that sugar prices had started stabilizing as the 
mills had gone into production and supply of sugar was expected to 
pick up in December.

Saifullah convicted in Ehtesab reference

LAHORE, Nov 30: An accountability court on Thursday sentenced 
former federal petroleum minister Anwar Saifullah Khan to one year 
imprisonment with a fine of Rs5 million in default of which he will 
undergo imprisonment for a year more.

The former minister during the PDF government ordered for illegal 
appointments of 145 people in the Oil and Gas Development 

Judge Mahmood Akhtar Shahid Siddiqui also disqualified Mr Khan from 
holding a public office for 21 years under section 15 of the NAB 

The court said the prosecution proved beyond any shadow of doubt 
that Anwar Saifullah Khan "while holding public office by corrupt 
and illegal means attempted to obtain pecuniary advantage for 118 
persons and that actually 27 persons obtained pecuniary advantage 
by way of entering into the service of OGDC through backdoor". A 
ban was imposed on appointments before the 118 persons could start 
the job.

It was said that the former minister misused his authority and 
directed the OGDC chairman to appoint 145 persons in the 
corporation in violation of rules.

The convict in his statement said he was under pressure from 
parliamentarians who demanded that the government should fulfil its 
obligation of providing jobs. He denied having ordered for 
relaxation of rules.

The court observed that the minister entertained applications from 
the parliamentarians unlawfully and got them scrutinized by his 
personal staff officer. It said by accepting parliamentarians 
nominees the minister denied job opportunity to those who did not 
have any connections.

Pakistan recalls envoy from Dhaka

ISLAMABAD, Nov 30: The Government of Pakistan has decided to 
transfer Pakistan's Deputy High Commissioner from Dhaka. This 
decision was conveyed to the Bangladesh High Commissioner in 
Islamabad on Thursday afternoon.

This was stated by a Foreign Office spokesman here in a statement 
on Thursday. The spokesman said, "We regret the controversy 
surrounding the reported remarks of the Pakistani Deputy High 
Commissioner made at the BIISS seminar in Dhaka on Nov 27, 2000".

The spokesman said, "It has become impossible for the office to 
effectively carry out his duties and responsibilities as member of 
the High Commission. "The government has therefore decided to 
transfer him from Dhaka. This decision was conveyed to the 
Bangladesh HC in Islamabad this afternoon," the spokesman said.

Pakistan receives BD govt's protest note
Hasan Akhtar

ISLAMABAD, Nov 29: The protest note of the Bangladesh government 
has been received by the foreign office here, expressing Dhaka's 
resentment against utterances by Pakistan's deputy high 
commissioner Irfanur Raja at a seminar in Dhaka.

The foreign office spokesman told Dawn on Wednesday that an interim 
report from the high commissioner in Dhaka had also been received.

The protest note expressed Bangladesh's resentment but there was no 
demand for the withdrawal of the Pakistan diplomat.

The deputy high commissioner was reported to have asserted that the 
atrocities committed by "the Awami League miscreants" during the 
1971 war had sparked the troubles leading to the army action and 

The spokesman said that the FO would wait for the complete report 
of the high commissioner in Dhaka and ponder over the protest note 
before offering any comment.

AFP adds from Dhaka: Some 3,000 men and women belonging to 
Bangladesh's top anti-fundamentalist group, which has been 
demanding since 1992 that war criminals be put on trial, at a 
downtown rally on Wednesday asked for Mr Raja's expulsion.

Foreign Minister Abdus Samad Azad rejected the Pakistan plea for 
forgetting the "tragic past", saying "the question does not arise 
of forgetting the past."

"We don't accept such an approach by Pakistan," the official BSS 
news agency quoted him as saying.

S. Abdul Malek, political adviser to the prime minister, also 
criticized Mr Raja for his remarks.

Awami League general secretary and local government minister Zillur 
Rahman, demanding Raja's "immediate expulsion" and "unconditional 
apology," said his "audacious comments about Awami League and the 
war of liberation have created a strong resentment in the minds of 
all patriotic and freedom-loving people of Bangladesh."

GDA inducts PML into its fold
Ashraf Mumtaz

LAHORE, Nov 26: The 19-party Grand Democratic Alliance, with a 
"majority vote" at an emergency meeting held here on Sunday, 
allowed its former adversary PML of Mian Nawaz Sharif to join the 
alliance to make joint struggle for the restoration of democracy.

Over half a dozen smaller parties expressed their reluctance to sit 
with the man they had struggled against. However, some of them 
approached GDA President Nawabzada Nasrullah Khan subsequently and 
expressed their support for the alliance decisions.

PML (Chattha group) president Hamid Nasir Chattha was among the 
staunchest opponents of the idea of the GDA joining hands with the 
party of Mr Nawaz.

All anti-Nawaz people in the GDA are expected to part ways with the 
leaders they had worked with for about three years - first from the 
platform of the Pakistan Awami Ittehad and then the GDA.

This was the last meeting of the GDA under the chairmanship of the 
Nawabzada and parties which approved induction of the PML will hold 
their next meeting in the company of their new ally, the PML, in 
Islamabad during the next few days.

The alliance, according to informed sources, was being named the 
National Democratic Alliance and its maiden meeting would be held 
within a week.

The Nawabzada, who had worked against the PPP with the support of 
the PML during the first Benazir rule and then against Mian Nawaz 
Sharif during both his periods, will head the new alliance.

Rs10 billion losses, fraud detected: NAB to investigate cases
Ihtashamul Haque

ISLAMABAD, Nov 28: The Adhoc Public Accounts Committee (PAC) has 
uncovered losses to the tune of Rs10.5 billion as well as 
embezzlement of funds in the Pakistan National Shipping Corporation 
(PNSC), Port Qasim Authority (PQA) and Gwadar Fish Harbour Port 
Project and decided to refer their cases to the National 
Accountability Bureau (NAB) and the Federal Investigation Agency 
(FIA) for investigation.

"We have been looking into the cases of PNSC, PQA and Gwadar Fish 
Harbour during the last two days and we found that their 
accumulative losses are enormous for which the NAB and the FIA are 
being asked to investigate the issue so that the culprits involved 
in it are brought to book," said HU Baig, Chairman of the adhoc 

He also disclosed that the PAC had proposed to the higher 
authorities to conduct a proper accountability of the present 
government employees.

"We want to be fair about it so that nobody should say that PAC is 
not talking about the corruption of the present time," he added.

He said that the cumulative losses of PNSC had reached to about Rs4 
billion. This eroded 36.94 per cent of the equity worth Rs1.2 
billion and that was why PAC had directed the ministry of 
communications to review the performance of the corporation and 
submit a report within 30 days.

"But what is more frightening is that the corporation has been 
asked by the authorities concerned to forget about losses to the 
tune of Rs4 billion and start everything afresh," he said.

Taking serious note of the fact that Port Qasim Authority after 
incurring an accumulated loss of Rs1.2 billion up to 1995-96, has 
failed to compile and submit its accounts to the Auditor General's 
office for a period of three years from 1996-97 to 1998-99, the PAC 
has directed the ministry of communications to submit a report 
within the next 15 days, subsequent to which the matter shall be 
considered for submission to the NAB.

Baig also said that the committee has been informed that an amount 
of Rs1.4 billion was spent on the Gwadar Fish Harbour-cum-Mini Port 
Project up to December 1999 and that the project was yet to be 
completed. The accounts of this project for a period of over 22 
years (1976-1999) have never been prepared and provided to the 
Auditor General's office.

The committee also decided to refer to the NAB the drawing of 
double consultancy charges by an officer of the Postal Group who 
had been employed on deputation by an international organisation.

# ORGANIZATIONAL FLAWS:# One of the senior members of the PAC, Lt-
Gen (R) Talat Masood said that organizational and structural flaws 
in the PNSC needed to be removed to make the organization efficient 
and cost-effective.

Baig said that the sanctity of the budget must be upheld under all 
circumstances. Unfortunately, he said, lessons were not learned 
from past mistakes and their repetition was causing further loss to 
the national exchequer.

He stated that all the ministries and divisions should hold their 
departmental accounts committee meetings on a regular basis and the 
principal accounts officers should ensure that all causes of fraud 
and criminal negligence are immediately referred to the NAB and a 
quarterly review should be conducted to ensure implementation of 
the PAC directives.

Tarar asks India to respond to talks offer
By Our Staff Reporter

LAHORE, Dec 1: President Rafiq Tarar, maintaining that India cannot 
hoodwink the world community by announcing a temporary ceasefire in 
occupied Kashmir, said here on Friday that if New Delhi was sincere 
in solving the Kashmir dispute, it should reciprocate Pakistan's 
offer for talks.

Talking briefly to reporters at the Pakistan Administrative Staff 
College, he said Pakistan was a recognized party to the Kashmir 
issue and India should open talks with it without delay.

It may be pointed out that Chief Executive Gen Pervez Musharraf had 
said it time and again that he was willing to hold talks at any 
level, anywhere and at any time. But, the gesture had yet to 
receive a positive response from the other side.

Answering a question about Afghanistan, the president recalled that 
Pakistan had been providing shelter to millions of refugees for 
several years. He said the world community should also shoulder its 
responsibilities by extending help to the displaced Afghans, who 
were again coming to Pakistan because of the situation in their 

In his opinion, countries which had got independence as a result of 
the Afghans struggle against the Soviet occupation should also help 
Afghanistan overcome its problems.

President Tarar told a questioner that Pakistan had always good 
relations with Bangladesh and there was no possibility of any 
deterioration on any pretext.

He vehemently criticized Israeli oppression against the unarmed 
people of Palestine who were fighting for their rights. He called 
upon the Islamic world to stand shoulder to shoulder with the 
people of Palestine in their just struggle.

Answering another question, the president said Pakistan had the 
right to sell its defence products as a means to get self-reliance. 
He said all possible efforts should be made to rid the country of 
dependence on others.

Meanwhile, addressing a ceremony at the Administrative Staff 
College, the president said: "The task of those entrusted with the 
management of national resources has become all the more complex as 
the world shrinks to a global village. Flight of capital and skills 
to more profitable areas has acquired mobility and speed unknown in 
the past. Unskilled and semi-skilled labour which is in super-
abundant supply in the developing countries, however, remains 
trapped in the countries of their origin, thus aggravating the 
already big divide between rich and poor countries".

The president said the transfer of technology from the developed to 
the developing countries which could have alleviated the rigours of 
"this divide" to contingent on payment of huge costs which poor 
countries were unable to afford. The backbreaking debt burden and 
its servicing, coupled with other factors have created a vicious 
circle of poverty and under development which breed 
disillusionment, frustration, unhappiness and resentment.

Pakistan, the president said, was also facing these problems and 
going through a remedial process which was bound to be painful. 
"The intensity of the pain of readjustment to the ground realities 
can be considerably reduced through productivity gains both in the 
short and medium term. Agriculture sector has promising prospects 
and so has textile and leather sector as well as small scale 
enterprises. If policy planners imaginatively focus on these 
sectors, their efforts can prove rewarding".

The president said: "We may have the best of minds and the most 
competent policy planners but their ability and wisdom has not made 
a significant difference to the people. Officials at the 
subordinate level are still oblivious of the fact that they have 
entered into a social contract with the people which stipulates 
that they would honestly and diligently deliver quality services to 
the tax payers who foot the bill for their salaries and perks".

He said the situation gets further compounded when those in 
position of authority start extracting illegal benefits from those 
who come into contact with them during official business.

"It is time that we develop a culture of zero-tolerance for all 
sorts of corruption at all levels. A fool proof system needs to be 
put into place to ensure that corrupt and unscrupulous elements are 
exposed and weeded out".

He said integrity was like delicate sapling which needed favourable 
climate and careful nursing if it had to prosper. "In our country, 
public servants play a leading role in setting the pace for social 
behaviour. I urge them to do quite a bit of self-introspection. The 
basic lesson which needs to be learnt at all levels is that every 
individual, family, business, organization, enterprise and entity 
must live within its lawfully established means and that habit of 
thrift and saving be cultivated as an article of faith. We have to 
return to the teachings of Islam to promote simplicity, and social 
responsibility and to discourage ostentation".

IMF wants Pakistan to cut debt by June
M. Ziauddin

ISLAMABAD, Dec 1: The new IMF stabilization programme under the 
standby arrangement, announced on Thursday, requires Pakistan to 
reduce its total public and private external debt by end of June 
2001 to 266.2 per cent of the total foreign exchange receipts from 
281.6 per cent recorded at the end of June 2000.

Actual debt servicing on the other hand is required to be brought 
down to 28.9 per cent by the end of June 2001 against 35.2 per cent 
of foreign exchange receipts recorded on June 30, 2000.

Foreign exchange reserves, in the meanwhile, are required to go up 
to $1.7 billion by June 30, 2001, but not including gold, foreign 
assets relating to foreign currency deposits contracted after May 
1998 (FE 25s), foreign assets relating to short term swap and 
forward operations.

The negative trade balance by the end of the current financial year 
is required to shrink to 1.8 per cent of the GDP from 2.3 per cent 
recorded during the last financial year. The negative current 
account balance, including official transfer, is required to 
maintain the last year's level of 1.6 per cent.

Merchandize exports and imports are required to go up to 15.3 and 
17.1 per cent of the GDP respectively by the end of the current 
financial year against 13.3 per cent and 15.6 per cent of the GDP, 
respectively, of last financial year.

The real GDP at factor cost is expected to slow down during the 
current financial year to 4.5 per cent from 4.8 per cent recorded 
last year and the rate of inflation is required to be kept at 
around 6 per cent during the current year up from 3.6 per cent 
recorded in the last year.

Gross national saving during the current year is required to go up 
to 13.9 per cent of the GDP from 13.3 per cent in the last year 
with the private savings contributing as much as 14.3 per cent 
against 15.3 per cent last year. 

However, the improvement in the gross national saving is to be 
achieved by reducing the negative public savings from 2 per cent of 
the GDP last year to 0.5 per cent in the current year.

The gross capital formation is required to go up to 15.5 per cent 
of the GDP in the current financial year from 15 per cent in the 
last year with the public sector capital formation going up from 
4.5 per cent of the GDP last year to 4.7 per cent in the current 
year and the private capital formation going up from 10.5 per cent 
10.8 per cent.

The budgetary revenue in the current financial year is required to 
remain at 16.5 per cent of the GDP, the same as last year, and the 
budgetary expenditure is required to come down from 22.9 per cent 
of the GDP in the last year to 21.8 per cent at the end of June 30, 
2001. As a result the budgetary deficit is expected to come down to 
5.2 per cent of the GDP in the current year from 6.4 per cent in 
the last year.

The net foreign assets are required to go up to 5.6 per cent during 
the current year from last year's 1.5 per cent and net domestic 
assets in the same period are required to come down to 5.7 per cent 
from 7.8 per cent in the last year.

Credit to private sector from these assets is required to go up to 
6.9 per cent during the current year against 1.4 per cent in the 
last year and at the same time the credit to public sector is 
required to come down to 1.2 per cent in the current year from 3.1 
per cent in the last year. In the same period broad money is 
required to go up to 11.3 per cent from 9.4 per cent in the last 

To stem the pressure on the rupee and bring official reserves to 
more comfortable levels, a stabilization programme supported by 
Fund resources was needed urgently, said the IMF executive board 
while approving the standby credit on Thursday.

The board also noted that in the meantime, the external financial 
situation had become even more fragile (than what it was when the 
military government came to power in October 1999), partly because 
of large debt service payments and increased capital outflows as 
well as loose macroeconomic policies (of the present government).

Cautioning the government, the Fund Board said that since there was 
"significant uncertainty surrounding the short term impact of 
revenue measures on the budgetary position, the authorities should 
stand ready to take additional measures if revenues fall short of 

CE to be briefed on new farm policy
Rauf Klasra

ISLAMABAD, Dec 1: The Chief Executive, General Pervez Musharraf, 
will be briefed on the new farm policy on Saturday, which aims at 
reorganizing the agriculture ministry on modern lines, establishing 
eight powerful crop commodity boards, 60,000 new rural cooperative 
societies and creating the National Agricultural Development 
Foundation (NADF).

The 130-page policy has also recommended the creation of an 
"Agricultural Research Endowment Fund" to meet the requirements of 
the next century.

Agriculture Minister Khair Mohammad Junejo and Secretary 
Agriculture, Dr Zafar Altaf, will brief the CE about the new policy 
named as "Pakistan Agriculture at 2000: Need for a paradigm shift 
into the 21st century".

The briefing will be attended by Finance Minister Shaukat Aziz, the 
CE's advisor on Agriculture M Shafi Niaz and other officials of the 
federal government.

The policy has recommended the establishment of commodities boards 
for crops like rice, fruits and vegetables, wheat, sugarcane, 
cotton besides similar set-ups for edible oil and kitchen items, 
poultry, dairy & livestock; to intervene in the market in case of 
surplus production of these commodities.

These boards will determine the target and the size of these crops, 
identify issues, develop confidence among the stockholders, attempt 
at conflict resolution between stockholders, enhance agricultural 
exports through value addition and development of agro-industries 
in the rural sector, promote crop productivity and new technology 
through linkage with national and provincial agriculture research 
system and ensure price stabilization of agricultural commodities.

The CE has also been asked to allow the imposition of levy of cess 
tax on each crop to help these boards to run their affairs on a 
self-help basis.

The boards will be represented by the government, the growers, the 
traders, the businessmen and other concerned stockholders. The 
government's role will be only to facilitate the functioning of the 

Another major recommendation of this policy is the establishment of 
rural cooperative societies with changed objectives.

The policy said, 60 to 90 per cent of the cooperatives have been 
reported bogus, fictitious or just a one-man undertaking. Under the 
new initiative, the existing credit cooperatives may be converted 
as multipurpose cooperatives with the objective of supplying farm 
requisites like fertilizers, seeds, pesticides, farm implements and 
procure farm outputs like wheat, cotton and paddy.

The policy said, "one village, one cooperative society" should be 
allowed to be established under the law ensuring maximum enrolment 
of farmers.

Establishment of the National Agriculture Development Foundation 
will focus on agriculture exportable commodities, encourage farmers 
to grow more for export by developing agri- export farms, advise 
growers/ traders on how to avoid post harvest losses and provide 
technical assistance to control pests and extend the life of 
perishable farm products.

Liquid forex reserves shoot up: IMF tranche
Mohiuddin Aazim

KARACHI, Nov 30: The State Bank received on Thursday $192 million 
in its account as the first tranche of a $596 million 10-month IMF 
standby credit that raised liquid foreign exchange reserves of 
Pakistan to $1.336 billion.

"We have received 150 million SDR (special drawing rights) or $192 
million in our account," chief spokesman for SBP told Dawn. The SBP 
received the amount in its New York account immediately after the 
IMF board of executive directors approved in Washington $596 
million standby loan for Pakistan.

The inflow of the IMF money boosted foreign exchange reserves to 
$1.336 billion on November 30 up from $1.129 billion about a week 
ago. The amount also included $481.7 million private foreign 
currency deposits of banks placed with the SBP as on November 30.

Senior bankers said the news of IMF credit coming in resulted in a 
slight recovery of the rupee in post-closing trading in the inter-
bank market. They said the rupee had closed at 58.05 to a US dollar 
at 12:00 noon but in the afternoon session it moved up to close at 

In the open market, the rupee closed at 60.70/60.80 to a dollar 
against the previous close of 61.00/61.05 showing a recovery of 25 
paisa. Currency dealers linked the gain to the news about the IMF 
money coming in.

The rupee remains strong in the open market in Ramazan on the back 
of higher inflow of foreign exchange sent back home by overseas 
Pakistanis for pre-Eid purchases.

Meanwhile, the State Bank said on Thursday it would keep the 
interest rates unchanged on foreign currency deposits of banks for 
December 2000. It told banks that one-week and one-month deposits 
would continue to earn 4.00 and 4.25 per cent return respectively. 
It said it would continue to pay 4.50 per cent on three month 

Sugar mills: Operations cease at beginning of crushing season

ISLAMABAD, Nov 30: Facing non-availability of sugarcane, the 
Frontier Sugar Mills management on Thursday closed down the 1,200 
ton per day capacity unit at the start of the crushing season.

The FSM Managing Director, Iskandar Khan, told Dawn that despite an 
offer of Rs45 per maund of sugarcane purchase, the growers declined 
to supply the current crop cane to the millers.

Growers representatives said that the growers had opted for selling 
their cane to the gur-makers, who are offering Rs47 per maund. One 
of the six sugar mills in NWFP, Saleem Sugar Mills, has already 
closed down due to these pressures.

The FSM last year produced 5,324 ton of sugar, paying Rs64.39 
million in taxes. Other millers in the area have pointed out that 
the sugar crisis is going to deepen as non-availability of 
sugarcane would soon cause the remaining five sugar mills in NWFP 
to close down.

These mills produce 17,700 tons of sugar per day. In the current 
crushing season, they are not getting even 25 per cent of their 
crushing capacity cane.

The sugarcane is being diverted to the production of raw sugar 
(gur). The Frontier sugar mills are procuring 5-18 per cent of 
their cane-crushing capacity for the last five years. The annual 
capacity is 1.5 million tons. 

World Bank likely to offer additional funding
Bureau Report

ISLAMABAD, Nov 30: World Bank has expressed willingness to offer 
additional funds for the implementation of tax reforms, said 
Finance Minister Shaukat Aziz on Thursday.

"We have been told by vice-president Mieko Nishimizu that her bank 
is interested in extending additional funds for improving tax 
administration in Pakistan," he told reporters at a news 

Pakistan, he pointed out, had made a formal request to the World 
Bank for additional funds for the financial restructuring of the 

Unsure about the size of the funding, the minister stressed that 
the WB's lending over the issue would be very important.

Mr Aziz said the World Bank was also considerate towards offering 
funds for Structural Adjustment Loan in the power and banking 

Similarly, he said, negotiations with the Asian Development Bank 
and Islamic Development Bank were progressing well for lending.

ADB to provide $52 million to help women farmers
Bureau Report

ISLAMABAD, Nov 30: The Asian Development Bank (ADB) has decided to 
provide $52 million mainly to help farm women living in rainy areas 
of Pakistan.

According to an announcement made here on Wednesday by the local 
ADB office, women will make up to 40 per cent of the beneficiaries 
of a project to help farming families in rainy areas through $52 
million concessional lending.

The project is a continuation of a previous project completed in 
2000. The new project will raise incomes by providing a range of 
measures to increase agricultural productivity and by promoting 
livelihood enterprises. It will also improve life for rural 
communities through social services such as health and education by 
upgrading village infrastructure, including irrigation, rural 
access, roads and water supply.

Altogether an estimated 830,000 people - 80 per cent of whom 
subsist on 50 cents a day or less - are expected to gain from the 
NWFP Barani Area Development Project.

The NWFP has vast areas which include poor settlements that depend 
heavily on uncertain rain-fed agriculture. Half the population 
lacks adequate nutrition, one-third is landless. Women are often 
malnourished because of poor diet, a heavy workload and frequent 
pregnancies. They also lag behind in access to basic education and 
health services.

"Society in the NWFP is conservative and male-dominated. To teach 
women, the project will provide a number of interventions targeted 
through women's organizations," said ADB economist Robin Erickson. 
The project will also support girls' education, teacher training 
and health awareness, which will be provided by women. In line with 
local norms, the project will provide logistics such as multi-seat 
vehicles, and separate living quarters and office space for women 
service providers.

Importantly, the initiative for choosing and implementing projects 
will come from rural communities instead of government agencies as 
was previously done. Typically, villagers want safer drinking 
water, better access to agriculture extension services, technology 
and inputs, improved roads and transport, alternative livelihood 
opportunities, affordable credit, household fuel, basic social 
services and village infrastructure, improved roads and village 
infrastructure. Villagers will also organize themselves into 
clusters to make a more effective lobby for local government 
services. The new pattern of decision-making is in line with the 
trend towards decentralized government.

In support of decentalization, the project will engage NGOs to a 
far greater extent than was previously done. NGOsare being 
encouraged to ensure that the project's activities are kept going 
after the loan closes.

The execution agency for the project due to be completed in mid-
2008 is the province's Planning, Environment and Development 
Department. The total project cost is $99 million. The balance will 
come from the International Fund for Agricultural Development 
($14.8 million), the Pakistani government ($20.1 million), 
participating financial institutions ($1.2 million) and 
beneficiaries ($10.9 million).

3rd phase of tax survey from 4th December
Parvaiz Ishfaq Rana

KARACHI, Nov 29: The government is starting spot assessment of 
business and industrial establishments from Monday, under third 
phase of tax survey and documentation of national economy, official 
sources disclosed on Wednesday.

Sources said that complete spot assessment would be carried out in 
industrial establishments and of wholesalers, but for retailers the 
assessment will be selective, based on revenue potential.

Around 20 per cent spot assessment of retail business will be done 
but the percentage will differ from market to market and those 
business centres and shops will be targeted who have higher revenue 

For this purpose the CBR has constituted four-member teams 
comprising assistant collector sales tax, assistant commissioner 
income tax, army personnel and a representative of respective trade 

Initially, the spot assessment will be done in 13 cities where 
first two phases i.e. distribution and retrieval of tax survey 
forms have been completed.

Sources said the assessment will be carried out with the help of 
data and information gathered from four sources - tax survey, 
utility bills, as well as information with income and sales tax 

The teams will tally the information gathered from these sources 
with those of ground realities and in case of any discrepancy the 
assessee will be challenged and action taken against him/her as per 
the law.

Spot assessment of those retail businesses, where authorities have 
detected lots of differences in their declarations and those 
disclosed in tax survey forms, will be undertaken. For this 
purpose, sources said the sales tax and income tax departments have 
already prepared verification notes of each assessee.

Asian Development Bank loan for farm sector

ISLAMABAD, Nov 29: Asian Development Bank has agreed to provide 
$250m loan to help Pakistan for initiating sweeping market reforms 
in agriculture sector. The loan will be utilized to strengthen the 
rural financial markets and bring about institutional reforms in 
this sector.

This was disclosed in a meeting held on Wednesday between the ADB 
Mission, led by Dr Raymond Renfro and the Agriculture Minister 
Khair Mohammad Junejo.

Finance Ministry sources said that the concluding meeting will be 
held between the Secretary General Finance, Agriculture Secretary 
Dr Zafar Altaf and mission's head here on Thursday to finalize the 
loan details and conditionalities attached to it.

No political terms set, says WB
Bureau Report

ISLAMABAD, Nov 28: The World Bank has asked the government to 
resolve its balance of payment crisis, improve fiscal management 
and complete taxation reforms process with a view to improving the 
economy of the country.

"There are no political conditions set by the World Bank to offer 
its assistance to Pakistan but there is a need to address 
seriousissues like BoP crisis, low exports andreduced revenues", 
said country director of the World Bank, John Wall. Export is a 
life-line for Pakistan which must be pulled out from the present 
stagnant, he added.

Briefing newsmen here on Tuesday, he said that the World Bank, the 
IMF and the ADB would extend their all possible support to 
Pakistan. "But you need to overcome your problems on your own", he 
said adding that Pakistan's export was stagnant for the last many 
years and needed to be increased for which the government will have 
to make sure that the textile sector goes into value addition.

He said Pakistan still has high interest rates of the banks and 
that tariff regime needed to be brought down further to have fair 
competition. Then, he said, culture of exemptions will have to be 
done away with and that the protectionist policies will not work to 
have certain improvement in the overall economy.

Mr Wall said that the government was also required to remove the 
financial crisis of the provinces. He said provinces were facing 
serious risks due to their financial crisis.

Responding to a question he said that provinces needed their 
financial restructuring so that they could strengthen their 
financial position which at present was very bad. "The provinces of 
huge development programmes which require finances and these 
finances would come when you affectively increase your revenues and 

Asked about the visit of the vice president of the World Bank for 
South Asian Region, he said that Ms Mieko had discusseda number of 
important issues with the chief executive, finance minister, 
governor State Bank and other senior officials.

PTCL announces higher dividend on lower profit
Dilawar Hussain

KARACHI, Nov 28: Pakistan Telecommunication Company Limited (PTCL), 
on Tuesday announced 22.5 per cent cash dividend for the year ended 
June 30, 2000. The payout was higher than the overall analysts' 
consensus forecast of 20 per cent dividend- same as paid last year.

The market had been anxiously awaiting the dividend and the 
financial figures from the company, which were unveiled by the 
Board, after the close of business at the Karachi Stock Exchange, 
on Tuesday.

During the day's trading, the PTCL stock shed Rs 1.60 to close at 
Rs 19.75; the scrip has not been able to break itself free of the 
current bear hug that seems to be squeezing the life out of the 
entire market.

PTCL revenue numbers for the year 2000 at Rs 58,643 million, up 
14.6 per cent over the earlier year's Rs 51,187 million, also came 
close to most analysts' expectations; ABN.AMRO was looking at 
revenue growth of 17 per cent; Global Securities 16.1 per cent and 
Invest Capital & Securities (InvestCap) at 14 per cent.

PTCL's bottomline fell wide off the mark. Compared to the above 
analysts' forecast of pretax profit increase by 41; 46 and 34 per 
cent, respectively, the telecom posted pretax profit increase of 
just 29 per cent to Rs 22,726 million for the latest year, from Rs 
17,568 million last year.

The higher growth in revenue and profit before tax was foreseen as 
a result of the company's ongoing tariff rebalancing. Tariff 
increase in local calls, line rent and installation charges 
announced last year, were expected to cast a healthier influence on 
the bottomline.

But it was at the after tax profit level that the analysts' were 
really seen to have been as wide off the mark as could be. Most 
were predicting minor increase in taxed profit or slightly pared 
earnings, but the telecom showed a stunning 24 per cent drop in 
after tax profit to Rs 13,331 million, from a year ago taxed profit 
at Rs 17,568 million.

With the tax holiday coming to an end, PTCL had to provide, for the 
first time, corporate taxation in the sum of Rs 9,395 million for 
the year under review, which came to an effective rate of 41 per 
cent on pretax earnings.

The telecom is also seen to have charged a substantial sum of Rs 
7,609 million to the current profits, for an unfavourable 
adjustment marked as "effect of change in accounting policy".

The details would be known when the complete annual report and 
accounts are available. Following the adjustment, the company had 
to tap Rs 7,609 million from the general reserves, to be able to 
pay cash dividend to the shareholders at enhanced rate of 22.5 per 

On the earning per share (eps) at Rs 2.61, the PTCL stock is 
currently trading on the price-earnings multiple of 7.6x. On the 
basis of total return (estimated between 35 to 50 per cent) and low 
p/e ratio, most brokerages are putting 'accumulate' and 'buy' tag 
on the stock at the current price.

The Board on Tuesday also announced that the Annual general meeting 
(AGM) would be held on December 30.

World Bank assures 'special funding' to CBR
Bureau Report

ISLAMABAD, Nov 27: World Bank has assured to offer "special 
funding" for undertaking tax reforms in the Central Board of 
Revenues (CBR).

Official sources said here on Monday that the Vice President of 
World Bank Ms Mieko Nishimizu met Chief Executive Gen Pervez 
Musharraf on Saturday and assured to extend special funds for 
undertaking reforms in the CBR.

Although no specific additional funds were announced by the World 
Bank vice president, she said that tax reforms was an important 
area which needed special attention of the donor agencies and that 
it will oblige the government.

Sources said that while Ms Mieko offered $300 million for 
Structural Adjustment Loan (SAL) for power and banking sector, she 
also assured to offer more funds for education sector.

When contacted Minister for Finance Shaukat Aziz said that a two-
day meeting with the World Bank delegation and its meeting with the 
chief executive remained "excellent" and Pakistan was expecting 
uninterrupted flow of funds from the bank.

Responding to a question he said that the executive board of IMF 
will meet on November 29 and 30 to consider many important matters 
including resumption of Pakistan's assistance.

He expressed hope that the government will get about $600 million 
loan under Standby Arrangement(SBA) from the IMF. He said later in 
the third week of January 2001 the Paris Club will meet to consider 
the request for restructuring of Pakistan's loans.

"Generally, we have a strong support from the World Bank, IMF, 
European Union and Japan", said the minister for finance.

CBR issues one million NTN certificates

ISLAMABAD, Nov 25: The count of National Tax Number (NTN) holders 
in the country has crossed one million, the Central Board of 
Revenue (CBR) statistics reveal.

The remaining 400,000 income taxpayers registered with the 
department would be issued the NTN certificates, within the next 
30-40 days, CBR officials said. Besides, 80 per cent of the 90,000 
sales tax payers registered with the CBR have already received 
their NTNs, they added. The rest of sales tax payers' track record 
of filing tax returns over the past one year is being checked and 
they would be issued NTNs on clearance of their applications by the 

 Figures, compiled by the Pakistan Revenue Automation Limited 
(PRAL), a data maintenance arm of the CBR, indicated that it had 
issued 407,891 NTN certificates from its Karachi centre; 341,987 in 
Lahore and 250,187 in Islamabad.

The above three centres cover the entire country for issuance of 
the NTN certificates. They issued 324,411 NTNs to the existing 
taxpayers from their Karachi centre; 275,879 in Lahore and 217,295 
in Islamabad. The remaining NTNs were issued to the new applicants.

 The PRAL records also indicate that more than 200,000 new 
taxpayers also applied for NTN, of which 43,000 applications were 
rejected, due to incomplete information, submitted by the 
applicants regarding their business, occupations, incomes etc.

The CBR officials said the new NTNs would help the tax authorities 
tally the income and turnover declarations of taxpayers with the 
Income Tax and Sales Tax departments. Mentioning of NTN on tax 
return has become mandatory for the taxpayers.

Turnovers and other sources of the income of taxpayers, whose 
declarations with the Income Tax department, would not tally with 
the details supplied to the Sales Tax department, would be put to 

For this scrutiny, the CBR's allied departments are devising a 
mechanism that would be based on the data collection from the 
sources of imports (Customs Appraisement), salaries (employers' 
ledgers), turnovers (as per declaration and audit), and input 
purchase invoices etc.

CBR seeks access to computer records
By Ikram Hoti

ISLAMABAD, Nov 28: The Central Board of Revenue, which has evidence 
that the power sector, including Wapda, is evading general sales 
tax (GST) has approached the government to empower the tax 
authorities to have access to computer records of the power 
companies for audit purpose.

Official sources told Dawn, CBR has the proof that public and 
private power companies, including WAPDA, KESC, Kot Adu and KANNUP, 
are evading GST.

The CBR, which wants these companies to clear their January-October 
GST arrears by December 31, has reported to finance ministry that 
31 power companies have not only evaded tax but also failed to file 
their tax returns regularly.

Seeking action against these companies, the CBR has asked the 
ministry to immediately convene tripartite talks between the 
representatives of power companies, CBR and finance ministry.

The round-table negotiations are to ensure that power companies not 
only pay tax and arrears but to guarantee that in future they would 
assess the tax correctly and file returns by the specified date 

The CBR has also informed the finance ministry that the power 
sector has claimed Rs8.718 billion in input (expenses on 
generation) adjustment while the total GST assessed by the power 
companies for July-October period is Rs8.22 billion only.

The CBR said that out of 31 companies, only 12 are paying about 98 
per cent of the total tax. These include Wapda, KESC, Hub Power 
Company and M/s Kot Adu Power Company Ltd.

The CBR is currently devising procedures and means to assess the 
actual chargeable GST, and the actual admissible input tax 
adjustment to the power sector.

According to official sources, the power sector is currently 
indulging in assessment of GST by calculating the tax on incorrect 
value thus committing under-assessment.

Apart from this, these companies are involved in short- billing 
their electricity supplies, which ultimately impacts on the total 
tax receipts generated from this sector.

The CBR is also taking measures to recover the GST, which was 
evaded by these companies.

Preliminary audit conducted by CBR authorities in WAPDA's Lahore 
Chapter alone has revealed discrepancies of Rs1.2 billion and the 
CBR is now seeking permission of the government for conducting 
thorough audit of the power companies.

The most regular evaders and reluctant tax-return filing companies 
listed by the CBR are Wapda, Kot Adu Power Company, KESC and 
Karachi Nuclear Power Station (KANUPP).

The CBR has sought access to the computers of these companies for 
conducting an audit of these companies in order to assess actual 
payable GST.

Last year too, the power sector proved evasive in paying GST. 
Originally a target of Rs8.2 billion was set for GST on electricity 
for 1999-2000. The net tax paid up to June 30, 2000 was Rs2.457 
billion only.

The government's decision regarding levy of GST became effective 
from January 1, 2000. However, Wapda and KESC did not file the 
first quarterly tax return which was due on March 21, 2000.

The two organizations have since adopted a habit of late- filing 
the tax returns. The target had to be eventually revised downward 
to Rs2.44 billion.

Back to the top
Education, education, education
Ardeshir Cowasjee

NO one denies that the bigots in this country outstrip by far the 
educated. No government since the government of the founder of the 
nation has acknowledged the fact that the educated have a natural 
ascendancy over the bigots and that therefore something has to be 
done to eradicate the dangerous deficit.

This past month in the Islamic Republic of Pakistan, the large 
majority of bigots have had a field day. They killed a Shia because 
he was a Shia. They killed ten Ahmedis because they were Ahmedis; 
they orphaned forty and injured thirty. The Government of Pakistan, 
in its powerful wisdom, has announced that the suspect is 'the 
hidden hand' of our traditional enemy. It goes without saying that 
this perennial ubiquitous 'hidden hand' has never been found and 
chopped off by any of our brilliant governments.

>From the better educated of the educated world, we and the 
government should learn. A recent issue of the Journal of the Royal 
Society of Arts (London) carried the transcript of a lecture given 
by Professor Bob Fryer, Assistant Vice-Chancellor at the University 
of Southampton. To quote :

"I sign up completely to the government's slogan of 'education, 
education, education' and I admire recent iniatives. I make that 
clear because I want to say a few critical things. My theme is the 
relationship between schooling and lifelong learning, and while I 
believe wholheartedly in the importance of education I believe it 
is dangerous to assume that it can be the sole or even the most 
effective tool of social change. It is wrong to assume that there 
is a clear relationship between learning and happiness or learning 
and work........".

Fryer talked about David Blunkett, the blind British Secretary of 
State for Education, a man who had been in the education field for 
years, having been allocated the education portfolio in the shadow 
cabinet whilst the labour Party was in opposition. His guide-dog, 
Lucy, a black Labrador, used to be a great favourite in the House 
of Commons. She retired honourably as an old lady not long ago and 
has been replaced by a younger, more agile yellow labrador guide.

To quote Fryer on Blunkett :

"David Blunkett has a wonderful vision which he expressed in the 
Green Paper, 'The Learning Age', and which remains for me a 
benchmark against which all initiatives need to be tested. In his 
foreword, the Secretary of State wrote : "We need the creativity, 
enterprise and scholarship of all our people. As well as securing 
our economic future, learning has a wider contribution. It helps 
make ours a civilized society, develops the spiritual side of our 
lives and promotes active citizenship. Learning enables people to 
play a full part in their community. It strengthens the family, the 
neighbourhood, and consequently the nation. It helps us fulfil our 
potential and opens doors to a love of music, art and literature. 
That is why we value learning for its own sake as well as for the 
equality of opportunity it brings."

"I cannot remember an official government publication that was 
serious enough to capture the idea of spirituality as well as 
creativity in the breadth of its compass. We need to remember what 
Mr Blunkett said.

"It is impossible to believe that however good any school and 
further education system was, it could deal with all the problems 
encountered throughout life. Increasingly, directors of education, 
head teachers, teachers and some school governors are realizing 
that lifelong learning concerns them, but we still have a long way 
to go and there are many challenges. . . . . . .

"Nearly eight million adults have serious difficulties with the 
basic skills of literacy and numeracy. We have seven million adults 
with no qualification whatsoever and 35 per cent of the workforce 
has never been offered a single day's training. There has been a 
welcome increase in learning at work in the past decade; the 
downside is that it goes mostly to professionals who are already 
highly qualified. We have a widening gap in qualifications, 
achievement, aspiration, and access to information in 
communications technology. We have too many people who are 
indifferent or hostile to the opportunities of learning."

A country with an almost 100 per cent literacy rate has its 
problems. Naturally of a different and less menacing sort from 
those of a country such as this one with a true literacy rate of 
some 20 per cent, with too many people aspiring to learn and too 
few facilities for them to learn.

Fryer maintains that there is a huge gap between the educationally 
qualified and unqualified. His question : What can schools do about 
this? His answer: "They are remarkable resources and I would like 
to see them made community centres of learning. Schools are the 
most valued, accessible and safe places in most communities. We 
need their buildings, their equipment and their teachers to be used 
and celebrated by everyone.They need to be used not only during 
school hours in school terms but during all hours throughout the 
year. In addition to providing opportunities for children to reach 
their highest possible levels, we need to raise the expectations 
and aspirations of everyone in the community and imbue in children 
the attitudes and competences of learning throughout life, not only 
study skills, but a whole bundle of others, including critical 
thining and cross-curricular compentence. These should become the 
norm so that there is a habit of lifelong learning."

We in Pakistan need schools. Period.

Musharraf took over this country from a corrupt undisciplined man, 
a dangerous despot, who sought to become the Shadow of God on 
Earth, the Ameerul Momineen, by threatening to promulgate his 15th 
constitutional amendment. Musharraf initially set out, so he 
obliquely once informed us, to be another Attaturk. We saw him 
relaxed and smiling, standing with his family and dogs. Soon 
Attaturk was ditched and the dogs were removed from the public 
limelight. For a few months I had quite a job convincing people 
that he is no relative of Big Chief Wumilong Umboppa and that the 
dogs have not been eaten up. Luckily and to my great relief, in his 
August interview on the BBC, when asked a foolish question about 
dogs being 'anti-Islamic', he answered, "Well I don't think dogs 
are anti-Islamic, certainly. I don't know who called them anti-
Islamic. Well, let me admit to you very frankly, I love my dogs and 
my dogs love me also. It's a mutual love."

In April this year, he made noises about introducing procedural 
safeguards against the application of the highly controversial 
blasphemy laws. These were and are being used to incriminate 
innocent people. He was navigating soundly. Then suddenly, under 
fundo-pressure, he retracted. Not even a weak man likes a 
vacillating general.

The most important problem that Musharraf must address is that of 
an illiterate population explosion which means an explosion of 
bigots. Each minute eight babies are born in Pakistan, or 480 each 
hour, or 11,520 each day, or 4,204,000 each year. Let us assume 
that infant mortality takes its toll. Even then, at the end of five 
years, the survivors, some three million-plus, would need to find 
schools with places available. How does this government hope to 
educate, in the true sense of the word, the coming generations and 
endow them with free minds unless, as of now, it makes some move to 
contain the obscurantists, the bigots?

Any suggestions? Will the educated educate us?

A penchant for sticking it in the mouth
Ayaz Amir

AND so after General Musharraf's petulance in calling off a meeting 
in New York (during the UN Millennium Summit) with the Bangladesh 
prime minister, Sheikh Hasina, for remarks delivered by her against 
dictatorial rule in general (remarks that we took personally), we 
now have one of our diplomats in Dhaka putting his foot into his 

Reportedly, he has said that the atrocities committed in 1971 in 
what was then East Pakistan (do we even remember this?) were 
sparked by 'Awami League miscreants' and not the Pakistan army. 
This statement, made at a seminar in Dhaka, has upset people in 
Bangladesh. The BD foreign minister has expressed his anger and in 
front of the National Press Club during a demonstration the 
Pakistani flag has been torched.

For its part the Pakistan foreign office in one of those statements 
for which it is justly famous has urged Bangladesh to set aside the 
'tragic past' and forge ahead with stronger relations. With the 
kind of petulance that the Chief Executive showed in New York and 
the subtlety one of our diplomats has demonstrated in Dhaka there 
should be little problem in building an exemplary relationship with 

Stupidity is of two kinds: forced (that is, by circumstances) and 
gratuitous. I have heard it said of Nawaz Sharif (lately of the 
Heavy Mandate, now Pakistan's leading democrat - along with, of 
course, the Queen of the East) that if an arrow was flying past him 
he felt impelled to catch it and stick it in his back. The Punjabi 
translation of this is more earthy.

But then Nawaz Sharif represents a national trend. As a country we 
have a tendency towards gratuitous folly. We have stumbled into 
wars ('65 and Kargil being the prime examples) without 
comprehending what we were trying to prove or achieve. We have sold 
ourselves cheaply, as in Afghanistan, without realizing what we 
were getting into. And we have flexed our puny nuclear muscles when 
anyone with the least intelligence could have figured out that it 
would serve our national interests better to keep them covered.

Let me be permitted a digression here. After India had carried out 
its nuclear tests in May 1988 Punjab's Gauleiter, Shahbaz Sharif, 
summoned his MPAs, division-wise, for a series of meetings. At the 
meeting of Rawalpindi division MPAs, out of 22 members hardly three 
or four spoke in favour of testing. The rest of them argued for 
restraint and moderation. Let me put it on record that Raja Azmat 
Hayat from Choa Saidan Shah, no Ph. D. from Oxford or Berkeley, set 
the tone of the meeting by saying that we should ponder the fate of 
the Soviet Union whose collapse had not been averted by all the 
nuclear bombs in the world.

Visibly confounded, Shahbaz Sharif said that these might be our 
personal opinions but what about our constituents? Having gone up 
the length and breadth of my constituency in connection with the 
local bodies elections which were then being held I piped up and 
said that wherever I went I was asked about schools, hospitals, 
roads and jobs but not at one place about whether we would give a 
tit-for-tat response to India's nuclear tests.

To put this exchange in context it should be remembered that the 
four districts of Rawalpindi division are from where the army draws 
the bulk of its recruits. And this was the sentiment coming from 
this so-called martial belt. But we went ahead with testing because 
the decision lay not with ignorant MPAs but the stars of the 
military establishment (the real force behind the folly of that 
confused summer).

Given all this, what is a misjudged action in New York or a stupid 
statement in Dhaka? We are good at this sort of thing. Bangladesh 
should not be losing any sleep over it.

If anyone should be concerned it is us. Bangladesh is not just 
another country for us. We have to be especially benighted not to 
realize this. Its people were flesh of our flesh, blood of our 
blood, soul of our soul. In pushing them against the wall, in 
pushing them to seek India's help, we did violence not only to 
them. We injured ourselves and committed something worse than 

How forgetful can we be. If anything can be called Pakistani 
nationalism - or more accurately subcontinental Muslim nationalism 
- its cradle lay not in the areas which now constitute Pakistan: 
Punjab, Frontier, Sindh, Balochistan. It is no small historical 
irony that these areas were latecomers to the Pakistani dream. The 
idea of Pakistan drew inspiration from two centres, north India 
(now Uttar Pradesh) and East Bengal. The Muslim League saw its 
birth in Dhaka. The idea of Muslim separatism gained strength from 
the partition of Bengal in 1905. By the same token this sentiment 
suffered a reverse when a few years later this partition was 
undone. Let us not forget that at that time Muslims, Hindus and 
Sikhs lived largely in amity in Punjab. In Bengal, on the other 
hand, the sense of Muslim grievances, fuelled in no small measure 
by the fact that the great movement of Hindu revivalism in the 19th 
century arose from Bengal, was stronger.

In the 1946 elections which set the stage for the partition of 
India it was only in Bengal that the Muslim League emerged as the 
single largest party, capturing almost half the seats. In Punjab it 
did well but its numbers were almost equalled by the Unionist 
Party. In Sindh it won a large number of seats but could not 
achieve a majority. When Jinnah gave his call for Direct Action in 
July 1946 the Calcutta killings a month later convinced everyone in 
India, including the British, about the gulf that had opened 
between the two communities. Not that the Direct Action call was in 
any way responsible for the Calcutta riots but that those riots on 
such a scale happened in Bengal rather than anywhere else shows the 
inflamed state of Hindu-Muslim feelings in the province. So the 
question is pertinent: without the push that the Muslim cause 
received from Bengal, could there have been a Pakistan?

We can be forgetful indeed. The provinces which conjoined to form 
Pakistan were not forced to do so by the British. According to the 
Partition Plan, power at the centre was to be devolved to the 
Congress as the majority party. The princely states could choose 
between independence or India and Pakistan. And, most important of 
all for our purposes, the Muslim majority provinces could choose to 
stay as part of the Indian Union or opt for Pakistan.

The Muslim halves of the Bengal and Punjab legislatures opted for 
Pakistan. So did the Sindh legislature. In the Frontier because 
there was a Congress ministry the issue was decided by a referendum 
in which the overwhelming majority of the votes cast were for 
Pakistan. In Balochistan in the absence of a legislature the Quetta 
municipality voted for Pakistan. In Assam the Muslim majority 
district of Sylhet decided by referendum to join Pakistan.

Pakistan thus came into being as the result of a freely-exercised 
choice by the Muslim majority areas of India. It was born not by 
coup or military revolution but by an act of pure democracy. East 
Bengal, more than any other province or region, was pivotal to this 

How could the army bring itself to use violence against the people 
of East Pakistan in 1971? If its higher command had been imbued 
with any sense of history, could it have allowed itself to play the 
infamous role it did? How could Yahya refuse to call a sitting of 
the National Assembly? How could Bhutto speak the intemperate 
language he did, thus encouraging the obduracy and belligerence of 
the army command and stoking the fires of intolerance in West 
Pakistan? And how could all of us be silent spectators of that grim 
and tragic drama?

The foreign office, as so often in its history, is wrong once 
again. We must not put the past aside. That's what we do all the 
time: forget the past and repeat its follies. For once we must 
understand the past and come to terms with it. This might just help 
us rid our minds of the demons which impel us from one act of 
gratuitous folly to another.

Concept of secularism
Irfan Husain

FOR the rich, the first thing that comes to mind when they are 
contemplating Ramazan is not renunciation of material things and 
prayer: they are more concerned about pulling their money out of 
their savings accounts so that zakat is not deducted on the first 
day of the holy month.

But this applies only to the Sunni majority as the Shias fought to 
get exempted from this religious levy when it was first imposed by 
Zia in the early eighties. Indeed, thousands of Sunnis have 
declared themselves Shias to escape this tax. Non-Muslims are 
already exempt. Indeed, this is one of the few advantages of being 
a member of a minority in this country; the other being able to 
legally buy booze. Unless, of course, you are an Ahmadi, in which 
case prohibition laws apply. So the poor Ahmadis have all the 
problems of being declared a minority without being able to benefit 
from their status.

I bring up these exceptions in the legal system as an example of 
the confusion caused by trying to frame laws in accordance with a 
religious faith that is not followed by all the citizens of 
Pakistan. Under such a dispensation, it is inevitable that every 
law does not apply to every citizen, and this is the essence of a 
civilized, democratic order. In a society like ours, all citizens 
cannot be equal, and for people like me who maintain that everybody 
must be equal in the eyes of the law, this is an unacceptable 
situation that has led to many of the contortions and distortions 
our legal system has been prone to.

By definition, democracy implies equality, and yet by basing laws 
on a faith that is not universal, we are excluding people from the 
ambit of the democratic order we are trying to create. In both 
Israel and Pakistan, the two states created in the name of religion 
in modern times, citizens who do not subscribe to the faith of the 
majority have been marginalized. In Israel, non-Jewish Arabs cannot 
buy property in certain areas. But while they suffer from 
discrimination in many more subtle ways, they do not face 
persecution to the degree Pakistan's minorities do. They do not, 
for instance, face the consequences of the iniquitous blasphemy 
law, and nor do they have to contend with the divisive system of 
separate electorates.

In Pakistan, secularism has been a pejorative word because of the 
unfortunate (and inaccurate) translation of this concept into Urdu: 
'Ladinyat' or irreligiousness. Yet my Webster's Third New 
International Dictionary defines secularism thus: "...a system of 
social ethics based upon a doctrine that ethical standards and 
conduct should be determined exclusively with reference to present 
life and social well-being without reference to religion." No 
mention of godless heathens here.

In the recent book 'Confronting Empire' containing interviews with 
the late and much-missed Eqbal Ahmad, the interviewer, David 
Barsamian, asked the famous teacher, activist and columnist about 
his views on religion. Eqbal replied: "I am very harshly 
secularist. But let's be clear about what 'secularism' means to me, 
and ought to mean generally to everybody else. In its original 
meaning it doesn't mean that you are irreligious or that you are 
opposed to religion. Secular to me means that the laws of the 
state, the laws of society, will not be enacted in accordance with 
some divine injunction; they will be enacted in response to the 
needs of society. Law treats everybody equally - be they 
Christians, Jews, Hindus, or Muslims - and is made for everyone 
equally. That's secular to me. It's in that sense that to me Israel 
is not a secular state, nor is Pakistan, but the United States is."

There is a general misconception in Pakistan that only religion 
keeps the tidal wave of immorality from inundating Pakistan, and if 
we were to become secular, we would be swamped by obscenity and all 
kinds of evil western influences. We tend to forget that most 
Muslim countries are secular and the standards of morality are 
generally far higher there. Indeed, nations like Turkey, Morocco, 
Tunisia and Algeria have smaller non-Muslim minorities than we do. 
Granted that they are not all shining examples of democracy, but 
their laws do not distinguish between one faith and another. We 
need to reflect on the universality of values: the aim of all major 
religions and value systems is to promote harmony, honesty and 
equality. There is thus no basic contradiction between secularism 
and religion: the former only suggests that faith is a private 
matter between the individual and his Maker. Edmund Burke, in his 
opening speech at the impeachment of Warren Hastings in 1788, makes 
this point very well:

"The laws of morality are the same everywhere, and... there is no 
action which would pass for an act of extortion, of peculation, of 
bribery, and of oppression in England, that is not an act of 
extortion, of peculation, of bribery and oppression in Europe, 
Asia, Africa, and all the world over."

The problem with states created in the name of religion is that 
politicians and bigots tend to justify the existence of their 
countries with an excessive outward show of religiosity. Thus, 
Israeli rabbis try to block all transport on Saturdays, the Jewish 
Sabbath, while our mullahs are on the verge of declaring interest 
illegal, thus precipitating a major financial crisis. In both 
cases, the zealots do not have the education or the sophistication 
to grasp the requirements of modern states plugged into a global 

As experience has taught us (or should have done by now), democracy 
and bigotry are incompatible, whether this ideological fervour 
stems from religious belief or a blind commitment to any other kind 
of dogma. These positions lead followers to assume an attitude of 
righteousness that is the very anti-thesis of democracy. Dogma 
teaches that only one point of view can be correct; and if this is 
so, all those who have not seen the light are wrong, and therefore 
deserve to be treated as second class citizens, if not as actual 
enemies of the ideological state.

In 1947, there was a famous case in the United States (Emerson 
versus the Board of Education) in which the plaintiff pleaded that 
the government should permit the teaching of Christian dogma in 
public schools. Mindful of the fact that many non-Christians were 
enrolled in the school system, and that one kind of religious 
instruction may offend certain sects, the court threw out the plea. 
In his ruling, the judge, Hugo La Fayette Black, said:

"The First Amendment has erected a wall between church and state. 
That wall must be kept high and impregnable. We could not approve 
the slightest breach."

Miandad confident of winning second Test 
By Samiul Hasan

FAISALABAD, Nov 27: Pakistan coach Javed Miandad showed great 
optimism ahead of Faisalabad Test against England saying his side 
will pull off a win in the match starting here on Wednesday. "I am 
confident that Pakistan team will win the match as we enter the 
match with a positive frame of mind," Miandad told reporters after 
team had nets at Iqbal stadium.

The touring England side had to practice at Bohranwala ground, 
adjacent to their hotel because lack of nets at Iqbal stadium.

"I have seen the pitch and it's hard and will take spin. We have 
not decided on the combination but will definitely have a spin 
dominating attack," he said. 

The match will again be affected by foggy weather and day's play is 
likely to be curtailed. During this time of the year fog descends 
and shorten the day by a significant margin. 

Pakistan's speedster Wasim Akram will celebrate his 100th Test in 
Faisalabad but he may not find the pitch to his liking and will 
have to use all his guile to make this occasion memorable for him. 
Leg-spinner Danish Kaneria is certain to make his debut.

Pakistan may play off-spinner Arshad Khan and with Saqlain Mushtaq, 
spearheading the "tweakers", Pakistan will enter the match with 
three regular spinners plus leg-spinning allrounder Shahid Afridi.

"Kaneria has impressed me when I saw him bowl in the nets and he is 
our future prospect," Miandad said.Kaneria, 19, will be hard 
pressed to live up to the expectations and pressure on him will be 
more in the wake of Mushtaq Ahmed's failure in the drawn Lahore 

When asked why Pakistan failed to press home the advantage of 
spinners in the first Test, Miandad said pitch in Lahore was 
turning but it took slow turn and made England's work easy. 

"It did take spin in Lahore but since it was slow turn England's 
batsmen coped with our bowling but this time it will be different," 
he said. 

England team captain Nasser Hussain did not talk to the press on 
Monday but will brief about his team's possible line-up on Tuesday.

Pakistan tour: BCCI asks govt to reconsider decision

CHENNAI, Nov 26: Indian cricketing authorities on Saturday urged 
the government to reconsider its decision to cancel a tour of 
Pakistan by the Indian cricket team.

Board of Control for Cricket in India (BCCI) was planning to appeal 
to the government to reverse its decision in the interest of 
promoting the game in the region, A C Muthiah, the board's 
president said.

The heads of the cricket boards of Sri Lanka, Malaysia and 
Bangladesh were also scheduled to meet Indian authorities to 
request clearance for the tour, Muthiah said.

Last week, the Indian government cancelled a tour of Pakistan by 
its cricket team. 

The ICC had recently threatened to disqualify India from 
international cricket if the Pakistan tour was called off.-AP

GDA inducts PML into its fold
Ashraf Mumtaz

LAHORE, Nov 26: The 19-party Grand Democratic Alliance, with a 
"majority vote" at an emergency meeting held here on Sunday, 
allowed its former adversary PML of Mian Nawaz Sharif to join the 
alliance to make joint struggle for the restoration of democracy.

Over half a dozen smaller parties expressed their reluctance to sit 
with the man they had struggled against. However, some of them 
approached GDA President Nawabzada Nasrullah Khan subsequently and 
expressed their support for the alliance decisions.

PML (Chattha group) president Hamid Nasir Chattha was among the 
staunchest opponents of the idea of the GDA joining hands with the 
party of Mr Nawaz.

All anti-Nawaz people in the GDA are expected to part ways with the 
leaders they had worked with for about three years - first from the 
platform of the Pakistan Awami Ittehad and then the GDA.

This was the last meeting of the GDA under the chairmanship of the 
Nawabzada and parties which approved induction of the PML will hold 
their next meeting in the company of their new ally, the PML, in 
Islamabad during the next few days.

The alliance, according to informed sources, was being named the 
National Democratic Alliance and its maiden meeting would be held 
within a week.

The Nawabzada, who had worked against the PPP with the support of 
the PML during the first Benazir rule and then against Mian Nawaz 
Sharif during both his periods, will head the new alliance.

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