------------------------------------------------------------------- DAWN WIRE SERVICE ------------------------------------------------------------------- Week Ending : 17 March 2000 Issue : 06/12 -------------------------------------------------------------------
Contents | National News | Business & Economy | Editorials & Features | Sports
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CONTENTS ===================================================================
NATIONAL NEWS + Musharraf, Vajpayee rule out Nuclear war + Ban to prevent disturbances: Parties told to purge corrupt + Rallies, strikes banned: Provinces told to enforce order + Clinton urged to avert India-Pakistan war + SC continues hearing plea against takeover + Lawyers boycott courts + Govt, millers claim no rise: Wheat prices higher in open market + Hijacking case trial: Lawyers satisfied with security + Verdict in Lahore case: Death sentence awarded to child killer + Kulsoom, PML leaders booked for provocative speeches + Pakistan's Nuclear site images released --------------------------------- BUSINESS & ECONOMY + Cost sharing with banks: SBP to pay Re1 per $ on home remittances + New three-year programme: Pakistan may get $2bn from IMF + Rehabilitation of sick units: Cabinet approves ordinance on CIRC + WB team's discussions continue: Talks to end subsidies begin + Tax reforms to yield Rs50 billion + Prize schemes to boost remittances + National Bank may float 10-20pc shares on KSE + Muslim Commercial Bank plans to shut 96 branches + Half of PTCL staff may be laid off + Action against 120 officials soon + Non-tariff barriers may go: Import of textiles under study --------------------------------------- EDITORIALS & FEATURES + Lost in the woods Ayaz Amir + Judgment on riba: an analysis Iqbal Jafar ----------- SPORTS + Moin Khan determined to restore Pakistan's image + Pakistan crush Sri Lanka to win Karachi Test + Wasim picked in team for Sharjah + Qualifications of a cricket coach

Musharraf, Vajpayee rule out Nuclear war
Masood Haider

NEW YORK, March 12: Chief Executive General Pervez Musharraf and 
Indian Prime Minister Atal Behari Vajpayee insisted in separate 
interviews with Newsweek that there is no possibility of a nuclear 
war over the Kashmir dispute.  Mr Vajpayee said "I completely rule 
out a nuclear war."

Nevertheless, in the backdrop of Mr Clinton's impending visit to 
the subcontinent, the Indian premier ruled out any role for the 
United States in resolving the dispute while Gen Musharraf 
maintained that President Clinton can 'facilitate a dialogue' 
between the two countries.

But, Mr Vajpayee held out hope that "all problems, including 
Kashmir, will be solved by peaceful means," stressing "there is no 
role for any third party, however well intentioned".

Gen Musharraf told Newsweek, which is to hit the newsstands on 
March 20, that he was pleased with Mr Clinton's visit to Pakistan.

President Clinton leaves for Asia next week and will spend five 
days in India. On the way back, he will make a brief stay in 

Gen Musharraf said he was pleased with Mr Clinton's decision to 
visit Pakistan underscoring that "this is a recognition of the 
importance Pakistan has in the region and of the 52-year- 
friendship we have with the US and of the righteousness of our 
stand on Kashmir".

The chief executive said he knew Clinton had said that he was not 
going to mediate on Kashmir. "But [he can] facilitate a dialogue 
between India and Pakistan."

Gen Musharraf told the magazine that tension between the India and 
Pakistan won't escalate into a war. "I do not think it will get out 
of control. They (India) know that there is a deterrence in place 
on our side," he added.

When asked whether he would help the US secure the arrest of Osama 
bin Laden, Gen Musharraf said: "The Taliban have their own reasons 
for allowing him sanctuary in Afghanistan. If anyone thinks we can 
order the Taliban around, he is wrong".

He maintained that the Harkat-ul-Mujahideen was not a terrorist 
organization as the US has determined and he also declared that he 
was in "total" control of Inter-Services Intelligence.

Ban to prevent disturbances: Parties told to purge corrupt
Bureau Report

ISLAMABAD, March 16: Interior Minister Lt Gen Moinuddin Haider on 
Thursday said that the latest ban on political rallies and strikes 
was neither meant to curb political activity in the country 
nor it had any connection with President Clinton's visit or the 
issue of the CTBT.

"The national political parties are an asset of the country and the 
military government is not working on any agenda aimed at their 
annihilation," Haider told a press conference which was 
specifically convened to clarify the interior ministry's Tuesday's 
ban on meetings in public places, strikes and processions.

He, however, indicated that these restrictions might be lifted in a 
few weeks if the political parties upheld healthy traditions and 
desisted from activities that were detrimental to the country's 

"We can't afford to have politics of killings, strikes and damage 
to state property, " the minister said, adding that the military 
government was working on reforms that would evolve "genuine 
democracy" besides maintaining permanent peace and stability in the 

The minister said that the military government had not restricted 
the activities of any politician since Oct 12 military takeover.

"Also, the government has not arrested any political leader merely 
because of his political activities," he said and reiterated that 
indoor political meetings and gatherings were still allowed.

Haider said that because of tension at the LoC, the enemy was also 
involved in subversive activities and was getting opportunities to 
carry out terrorist acts during processions, rallies and strikes 
called by political parties. He asked the politicians to be extra 

The minister brushed aside the impression that the latest ban was 
connected to US President Clinton's coming visit or was, in any 
way, related to the issue of the CTBT. He said if the PML wanted to 
hold a meeting on 23rd March, it could do so at a place like 
Alhamra, Lahore.

To another question, the minister asked the print media to desist 
from printing speculative and baseless stories. He, however, added 
that the government had no intention of gagging the press. 

In response to a question about the public hanging of Javed Iqbal, 
the killer of 100 children, the minister said that no public 
hanging would be allowed as the government was determined to 
respect human rights in the country.

APP adds: The minister said political leaders were free to give 
statements to the Press which was a free press enjoying complete 

The minister said it was also very important to reform the 
political culture of the country. He said that he had been meeting 
different political figures and advised them to "restructure and 
reorganise their political parties and see if their parties need 
internal elections or if the parties should get rid of people who 
damaged the party with their corrupt politics and also brought a 
bad name to the country."

"Ultimately, we have to return to democracy and strong political 
parties free of corruption can sustain the democracy," he said 
adding that political leaders should also know that blocking roads, 
disrupting traffic, damaging other peoples cars and breaking 
windowpanes at airports was a service or a dis-service to the 

Political rallies, strikes banned: Provinces told to enforce order 
ISLAMABAD, March 15: The Ministry of Interior on Wednesday imposed 
country-wide ban on all political meetings at public places, 
strikes and processions with immediate effect.

Indoor meetings are permitted, however, the use of loudspeakers for 
such political meetings is prohibited, said the ministry's press 

Meanwhile, the instructions have been issued to the provinces for 
ensuring strict implementation of the ban.-APP

OUR ISLAMABAD BUREAU ADDS: The interior ministry warned that 
elements working against the interest of the state were preparing 
and planning hostile acts to create chaos and portray Pakistan as 
an irresponsible state.

The ministry said that in the present geo-political environment and 
the interest of Pakistan's future, all political and religious 
parties will exhibit totally responsible behavior to curb unruly 
elements within their ranks and keep a watch on the intrusion of 
hostile foreign elements.

"The main objective of the government is the restoration of order 
and harmony in the society with a view to provide security and 
prosperity to citizens," the announcement said, adding, "for this 
purpose clear goals have been set in the reforms agenda announced 
by the Chief Executive."

In proceeding years, it said, the country had witnessed intense and 
frequent conflicts, disorder, indiscipline and breakdown of 
institutions. "The result has been the creation of a fractious 
society and incalculable damage to the economy," it added.

The government's reform agenda, the release said, was an earnest 
attempt to pull the country back from the precipice. Attainment of 
the goals set forth in this agenda require serious and sustained 
hard work by all Pakistanis, with full commitment to building up 
social and economic strength, in an environment of peace and order.

The interior ministry said that the country could not afford the 
luxury of agitation and violence-prone politics, which disrupted 

the normal public life. "Therefore, the ban on all political 
meetings in public places, strikes, and processions will continue 
to remain effective. Indoor meetings are permitted. However, the 
use of loud-speakers for such political meetings is prohibited."

Clinton urged to avert India-Pakistan war

WASHINGTON, March 14: About 25 unofficial US policy-makers, 
including former ambassadors to Pakistan and India and think tank 
have jointly urged President Clinton to try and stem the drift 
toward war between the two countries during his visit.

The message has been conveyed to the president in an open letter 
signed by these top experts belonging to various foundations, 
organizations and think tanks.

It urged India and Pakistan to take steps to reduce the chance of 
conflict over Kashmir, but advised the US to get directly involved 
in diplomacy relating to Kashmir, only if all parties expressed an 
interest, reflecting the standard US policy line.

The letter urged the president to persuade Pakistan to embrace 
economic reform, the rule of law and a more responsible behaviour 
toward terrorism.

These experts said in their letter that relations between India and 
Pakistan had sunk to a dangerous level which all too easily could 
lead to conflict. The effort was co-sponsored by the Brookings 
Institution and the Council on Foreign Relations.

SC continues hearing plea against takeover
Bureau Report

ISLAMABAD, March 13: The Supreme Court of Pakistan on Monday 
continued hearing of the petitions challenging the military 
takeover, ignoring the strike call given by the Pakistan Bar 
Council to protest the murder of Iqbal Raad,
 the counsel of former prime minister Nawaz Sharif.

At the outset, the counsel raised the issue of the murder of Iqbal 
Raad. Chief Justice Irshad Hasan Khan said that he was so perturbed 
at the news that he could not sleep for one night. The court 
offered Fateha for late Iqbal Raad.

When asked why he had not honoured the strike call given by the 
PBC, Khalid Anwar said the call was given to the high court bar 
associations and not to the SC.

Lawyers boycott courts 
DAWN Report

KARACHI, March 13: Lawyers boycotted courts on Monday to protest 
against the killing of Iqbal Raad, one of the counsel for Nawaz 
Sharif in the plane conspiracy case.

In the Sindh High Court, the judges were directed by the Chief 
Justice not to pass any adverse order on account of absence of 

The courts working under the district and sessions judges, 
additional district and sessions judges, civil judges, family 
courts and small causes courts, also had similar instructions for 
the day. The number of lawyers attending courts was very small, and 
only a few courts were attended by them.

A representative delegation of lawyers went to the governor's house 
where they represented their memorandum to the staff for the 
perusal of Sindh governor.

Earlier at a protest joint meeting of Karachi Bar, the Sindh High 
Court Bar, Sindh Bar Council and Income Tax Bar, and Pakistan Bar 
Council at the Sindh High Court, lawyers expressed shock over the 
killing of Iqbal Raad and two other persons and demanded arrest of 
the killers at the earliest.

The lawyers, wearing black armbands, said the manner in which Mr 
Raad was pursuing the famous case warranted proper and adequate 
security arrangements, "as he was apparently acting in furtherance 
of rule of law."

However, some of the senior lawyers boycotted the day's protest, 
saying their representatives had violated the plan of their 

Later, at a meeting of Sindh Bar Council with the Chief Justice, 
fateha was offered for the departed soul.

LAHORE: Lawyers in Lahore observed a strike on Monday to protest 
against the murder of Advocate Iqbal Raad in Karachi.

In the Lahore High Court, only urgent cases were taken up by judges 
in the morning. Many of them were adjourned when the counsel 
informed the court of the protest strike. Few cases were heard in 
the lower civil courts while sessions courts dealt only with bail 

Govt, millers claim no rise: Wheat prices higher in open market
Sabihuddin Ghausi

KARACHI, March 15: The government and the millers on Wednesday 
claimed that the supply of wheat flour to the city had been 
improved with the commodity being sold at the officially-fixed 
price of Rs9 a kiolgram.

However, reports from various parts of Karachi's five districts 
suggest that the flour prices have crawled up to Rs18 a kilogram.

Owners of about 50 mills in the city were persuaded to set up 271 
stalls besides opening 34 outlets at the weekly bazaars where a 
steady supply of flour bags is reported to have eased the supply 

A 15,000 ton increase in the wheat supply quota from the government 
stocks to the flour mills has also helped improve the situation.

Simultaneously, the reports that the government considering lifting 
Section 144 Cr.PC in the four districts of the province - which 
restricted the wheat movement from Mirpurkhas, Hyderabad, Umerkot 
and Dadu - has also helped bring down the wheat prices in open 

Millers, however, say that a number of their wheat-loaded trucks 
are still held up in Mirpurkhas awaiting the clearance from the 
deputy commissioner. But the fact that the government had shown 
inclination to lift this restriction has brought down the wheat 
prices in the open market that had touched Rs1,050 for a 100-kg bag 
on Tuesday.

The flour in the city's open market was being sold from Rs14 a kg 
to Rs18. "But this is chakki atta," Naeem Malik, a leader of the 
Pakistan Flour Millers Association, remarked, adding that the 
chakkis were not in the discipline of his association. He claimed 
that all the flourmills were offering flour at Rs9 for a kilogram.

Prices of fine flour and "maida" have also increased. Fine flour 
was available from Rs1,150 to Rs1,200 for a 80-kg bag while the 
price of "maida" touched Rs1,400 for the same weight on Wednesday.

Ibrahim Bhutto, secretary of the Ration Shop Merchants Association, 
said that on the government's instructions "awami atta" was being 
offered at Rs9 a kilogram. He, however, admitted that wheat flour 
prices in many parts of the city ranged between Rs14 to Rs17 a 

Hijacking case trial: Lawyers satisfied with security

KARACHI, March 15: Khwaja Sultan, chief defence counsel for Nawaz 
Sharif and others in the plane hijacking case, appeared before the 
trial judge on Wednesday to inform him that the defence team 
was ready to join the proceedings as he was now "fully satisfied 
with the security arrangements".

According to Advocate-General Raja Qureshi, all Lahore-based 
defence lawyers would be lodged at the annexe of the State Guest 
House as agreed by them.

"I accompanied Khwaja Sultan and showed him first the Punjab House 
and then the State Guest House and its annexe," he said.

The defence team will arrive here on March 19 and appear in the 
court on 20th - the day fixed by Judge Rahmat Hussain Jafferi of 
the ATC-1 for hearing the arguments of the prosecution. They will 
be staying in Karachi till the trial ends.

The Lahore-based defence lawyers had refused to attend the case 
proceedings for "security reason" after the assassination of one of 
their team members, Iqbal Raad.

The defence team had also demanded the shifting of the venue of 
trial from Karachi to either Lahore or Islamabad. However, the 
chief defence lawyer revoked his decision on the request of Nawaz 
Sharif, who was allowed to contact him on phone on Tuesday by the 

Khwaja Sultan, who met the deposed prime minister for one-and-a-
half-hours on the court premises on Wednesday morning, told 
reporters that his client was worried over the refusal of the 
defence counsel to attend the proceedings in Karachi.

He said he had told Nawaz Sharif that his lawyers would defend the 
case, though the "risk was still there". He said the defence 
counsel would avoid to appear in public as a precautionary measure.

Khwaja Sultan said he was now satisfied with the security 
arrangements. He said the defence counsel had demanded the 
security, but the authorities were doing too much and added that 
even the newspaper hawker was not allowed to reach his hotel room 
in the morning by the security personnel. "I have asked them to 
normalize the security.

Verdict in Lahore case: Death sentence awarded to child killer
Asad Ali

LAHORE, March 16: Additional Sessions Judge Allah Buksh Ranjha on 
Thursday directed that for killing 100 children, Javed Iqbal Mughal 
and his co-accused Sajid in the presence of the heirs of the boys 
should be strangulated
 with the same iron chain which they used as weapon of offence, 
their bodies to be cut into pieces and put into a drum containing 
acid as they did with those of the dead children.

The sentence was awarded as Qisas under Section 302-A of the 
Pakistan Penal Code. It was described as the first sentence under 
the Qisas law. A criminal law expert said under the Qisas law 
punishment could be awarded on the basis of confession or evidence 
which fulfils the requirements of Islamic Evidence Law. In this 
case, they said, the accused had confessed.

The court awarded extended jail sentences to the two other accused, 
Nadeem and Sabir, who were minors. Javed Iqbal and Sajid were also 
awarded jail terms for destroying the bodies. All the sentences are 
subject to confirmation by the Lahore High Court and shall run 
consecutively and not concurrently.

The court noted in its order "the prosecution has fully succeeded 
in proving the case and by grace of God I am fully convinced that 
the accused have committed Qatl-i-Amad of 100 children and after 
cutting their bodies into pieces have put them into drum recovered 
from the house of Javed Iqbal, the accused".

Regarding the execution of the judgment against Javed Iqbal and 
Sajid, the court recommended to the government through the Lahore 
High Court that to set a horrific example, the sentence should be 
executed at an open place, preferably Minar-i-Pakistan.

The verdict was announced at about 11:30am in a court room packed 
with journalists and lawyers. The four accused heard the verdict 
calmly except for a sentence uttered by Javed Iqbal as he was being 
taken by the police. The expressions of the accused remained 
unchanged after hearing the verdict. The only reaction came from 
Javed Iqbal who asked the court as to what was being done about the 
remaining accused who were not challaned in the case.

Kulsoom, PML leaders booked for provocative speeches

HYDERABAD, March 11: Cantonment Police Station SHO Inspector Hamid 
Ali Thaheem on Friday registered a case against Begum Kulsoom Nawaz 
and several PML leaders for making "provocative" speeches at the 
party's convention held at the residence of the district president 
of the party, Rais Allah Bukhsh Magsi, here on Thursday.

The case was registered on behalf of the state under section 153, 
153(A), 124(A) of the Pakistan Penal Code, section 16 of the 

Maintenance of Public Order Ordinance read with section 7(A) and 
7(B) of the Anti Terrorism Act, 1997 (amended in 1999).

Besides Begum Kulsoom Nawaz, Rais Allah Bukhsh Magsi, AfzalGujjar, 
Imdad Chandio, Begum Tehmina Daultana, Shah Mohammad Shah, Mamnoon 
Hussain, Haleem Siddiqui, Ismail Rahu, Asghar Ghumman, Ms Ishrat 
Ashraf, Saud Ahmed Farooqi, Kanwar Jafar Ali, Rizwan Channar, Ali 
Bukhsh Shah, alias Pappu Shah, Roshan Baloch and Chaudhry Mazharul 
Haq were nominated as accused in the FIR.

The PML leaders were charged with inciting the people against the 
present government and the army; trying to create hatred and enmity 
against the government; making announcement that they would commit 
self-immolation; and inciting the people to do likewise.

The FIR also accused the leaders of trying to create unrest among 
the people and inciting them to take the law into their hands.

Pakistan's Nuclear site images released

WASHINGTON, March 15: A prestigious scientific organisation on 
Wednesday released pictures and satellite images of Pakistan's 
nuclear and missile facilities which, it said, provide fresh 
insight into the nuclear dangers on the Indian sub-continent.

At a news conference in Washington the images were released to the 
Press while they were also put on the internet web site of the 
Federation of American Scientists 

The high resolution images, acquired by the Federation of American 
Scientists from the Space Imaging IKONOS satellite, show details of 
Pakistan's weapons facilities previously known only to the secret 
intelligence world, the FAS said.

The pictures were released on the eve of President Clinton's visit 
to Pakistan and India "to highlight the urgency of new initiatives 
to address the risk of nuclear escalation between these countries," 
the FAS said.

The Federation's Public Eye project is acquiring imagery of nuclear 
and missile facilities around the world. In February it released 
imagery of the North Korean missile test facility, and imagery of 
additional facilities will be released in coming weeks.

The imagery covers two of Pakistan's most important special weapons 
facilities, the plutonium production reactor at Khushab, and the 
nearby medium range missile base at Sargodha.

It said plutonium from the Khushab reactor would probably be used 
in light-weight nuclear warheads for the M-11 missiles at Sargodha, 
which Pakistan acquired from China in the early 1990s.

The new satellite imagery indicates that construction of the 
Khushab reactor is essentially complete, and that Pakistan has 
built a dozen garages for mobile missile launchers and associated 
vehicles at Sargodha.

"Pakistan has laid the groundwork for a force of dozens of nuclear 
tipped missiles capable of striking Indian cities and military 
bases," the FAS said.

"Pakistan is in danger of having most of its nuclear eggs in one 
basket, which would be a tempting target for a pre-emptive Indian 
attack in a time of crisis," according to John Pike, who directs 
the Federation's Public Eye project.

"The US needs to work with India and Pakistan to reduce this 
temptation for launching disarming attacks. With Pakistan and India 
apparently moving ahead with deploying nuclear forces, the danger 
of such attacks will grow," Pike said.

Cost sharing with banks: SBP to pay Re1 per $ on home remittances
Mohiuddin Aazim

KARACHI, March 16: The State Bank has told major banks that it 
would share their cost of mobilizing additional home remittances at 
the rate of one rupee per dollar.

Senior officials of major banks view this development as a big 
morale booster. They say they would now speed up their efforts to 
attract incremental home remittances to be routed through them.

The bankers say they have received a letter from SBP informing them 
of the incentive for bringing in more of foreign exchange earnings 
of overseas Pakistan back home.

The letter says the banks who are able to increase remittances by 
introducing improved service and delivery within 24 hours or the 
ones that introduce new products in accordance with locally 
applicable laws would be compensated for incurring extra expenses 
in such efforts.

It says that the State Bank would reimburse these banks at the rate 
of Re 1 per incremental US dollar mobilized by them as compensation 
for expenses of additional service charges incurred by them subject 
to certain benchmarks.

Since the volume of home remittances handles by all five major 
banks vary each one of them would have a different benchmark. A 
source close to SBP told Dawn that the first compensation would be 
paid for January to June 2000 period. He said the amount of home 
remittances routed through a bank between January and June 2000 
would form the benchmark for the next six months. That is a bank 
would be paid the compensation of one rupee per US dollar on the 
amount of home remittances that would exceed the amount routed 
through the bank in January-June 2000.

The source said the State Bank had asked major banks to let it know 
by March 15 if they were willing to make efforts to attract more of 
home remittances and get the compensation. It could not be learnt 
how many banks have conveyed their willingness so far.

Home remittances are the second largest source of forex inflow into 
Pakistan after exports. But a widening gap between official and 
open market foreign exchange rates has decreased the volume of home 
remittances through banking channels from $1.86 billion in 1994-95 
to $1.06 billion in 1998-99. The trend continues with the figures 

for July-December 1999 falling to $519 million from $581 million in 
a year-ago period.

New three-year programme: Pakistan may get $2bn from IMF
Ihtashamul Haque

ISLAMABAD, March 15: Pakistan is likely to get over two billion 
dollars under a new three years' IMF programme, expected to be 
finalised when the Fund's mission arrives here at the end of this 
month or early April.

Sources in the multilateral agencies told Dawn here on Wednesday that
Pakistan has been indicated about the new three years 
programme. The existing 1.5 billion dollar ESAF/EFF will converted 
into a proposed Poverty Reduction Growth Facility (PRGF).

Although the size of the new assistance programme has not been 
firmed up, it could be 2 billion dollar or more and that it all 
depended on the outcome of talks and the government's ability to 
come up with detailed programme of acquiring the new funding 
line,sources added.

The government has been told that a IMF mission to be headed by Ms. 
Sena Ekin could come to Pakistan at the end of March or early April 
or after the Fund's Interim Committee meeting being held in the 
middle of April in Washington.

The sources said that the new three years programme will have the 
support of the Paris Club and the US government. If Pakistan gives 
us a strong programme of economic reforms we would oblige your 
government", a source said.

Nevertheless the sources said that the IMF wanted a number of 
things to be done and given to it in the form of a detailed report 
about the state of the economy. The IMF has received some report 
from the ministry of finance but it wanted a new and thorough 
report much before the announcement of the budget for 2000-2001.

Pakistan has been told to announce new measures related to the levy 
of General Sales Tax (GST) on small traders. The Fund officials 
believed that the issue should have been sorted out by working out 
some mechanism or formula and enforced effectively. The sources 
said that the IMF felt very strongly about the delay inthe levy of 
controversial GST programme and said that the same should have been 
imposed immediately after the military government took over.

Similarly, the sources said that the government was expected to tax 
the agriculture income. In this regard the IMF wanted that the 
government should collect details about the top five per cent 
agriculturists and force them to pay their adequate taxes." We know 
that principles have been settled for the levy of GST and tax on 
agriculture income but then the government should have by now 
announced certain criteria or a formula for levying both these 
taxes", a source said.

Rehabilitation of sick units: Cabinet approves ordinance on CIRC
Bureau Report

ISLAMABAD, March 15: The federal cabinet approved here on Wednesday 
a draft ordinance which seeks to set up the Corporate and 
Industrial Restructuring Corporation (CIRC) to promote the 
revitalization of the nation's economy by reviving sick industrial 
units in the country.

The meeting, which was presided over by the chief executive, Gen 
Pervez Musharraf, was told that the proposed CIRC will take over 
the non-performing assets of Nationalized Commercial Banks (NCBs) 
and the Development Financial Institutions (DFIs) which would 
ultimately lead to the revival of sick industries. The draft will 
be vetted by the law ministry before promulgation.

Official sources said that the government would soon be seeking 
$400 million foreign assistance to revive 900 major sick industrial 
units through the CIRC.

The cabinet was given a detailed briefing over the issue and told 
that by creating the CIRC, the government could rehabilitate at 
least 900 sick units out of total of about 4000 units.

The proposed CIRC, sources said would undertake Balancing, 
Modernization and Replacement (BMR) of genuine sick industrial 
units for which it planned to contact the authorities of the 
Official Development Assistance (ODA) of Canada, Japan and couple 
of other countries for financial assistance.

The corporation will start working within next few weeks. Also the 
World Bank and the Asian Development Bank (ADB) were being 
contacted to offer loans for reviving the sick industrial units. 
Then the government-to-government contact would also be made to 
acquire soft term loans.

Italy was specially being approached to also offer its industrial 
machinery for reviving these units.

The sources said that initial contact with the government of Italy 
was encouraging as it had decided to look into the request of 
providing machinery to address the issue.

The federal cabinet also took a number of decisions pertaining to 
different ministries to promote the socio-economic betterment of 
the people.

The cabinet approved in principle, the replacement of the Insurance 
Act 1938 with a new legislation to update and modernize the 
provisions of the Insurance Act for general improvement of 
insurance in Pakistan and to correct the existing defects in the 
insurance market and regulatory system of insurance and effective 
enforcement of insurance laws.

The cabinet approved a proposal by the ministry of commerce to 
initiate negotiations to finalize a draft for a bilateral trade 
agreement between Pakistan and Kuwait. The proposed agreement will 
help in developing and strengthening the existing commercial 
relations between the two countries.

WB team's discussions continue: Talks to end subsidies begin

ISLAMABAD, March 14: The World Bank-Pakistan talks on financial 
assistance for reforms in eight major sectors of the economy began 
here on Tuesday. The issue of elimination of all kinds of official 
subsidy on wheat to all consumers in the country also figures in 
the talks.

Sources said the federal government on Tuesday informed the World 
Bank about the steps it was taking to de-regulate the wheat trade 
and eliminate the subsidy on wheat.

The bank delegation, scheduled to stay in Pakistan for two days, 
will also hold talks with the federal secretaries of Ministry of 
Petroleum, Privatisation Commission, health, education, law and 
interior on issues such as deregulation of oil and gas sector, 
privatisation programme, health sector programme, education 
programme, judicial and police reforms in Pakistan.

Earlier, here on Tuesday, the World Bank team led by John Panzer, 
in-charge of the programme desk on Pakistan, met Dr Zafar Altaf, 
Secretary of the Ministry of Food, Agriculture and Livestock, and 
discussed agricultural sector reforms expected to be funded by the 

Later, the WB delegation also met the secretary Revenue Division in 
the evening and got a briefing on the ongoing tax reforms in the 

Giving details of the meeting between Dr Zafar Altaf and the WB 
team, the sources said they discussed in detail agriculture reforms 
in connection with the Agriculture Sector Investment Programme 
(ASIP) to be funded by the World Bank.

The sources said the WB had promised a loan of Rs 3,850.20 million 
to Pakistan under its International Development Association (IDA) 
Scheme for the execution of a five-year mega agricultural project - 
the ASIP.

But, later the negotiations were stopped due to a number of 
political developments taking place after October 12, 1999. The WB 
had also set some conditionalities for the release of funding. 
Sources said they also discussed in detail their opposite views on 
this project.

Tax reforms to yield Rs50 billion
Ihtasham ul Haque

ISLAMABAD, March 14: The Tax Reforms Committee believes that if its 
recommendations were implemented in letter and spirit, government 
could generate additional Rs50 billion.

Official sources told Dawn here on Tuesday that the committee 
headed by former advisor on finance Dr Hafeez A. Pasha has proposed 
tough measures for improving the revenue collection.

 Sources said, the government has already decided to take "ruthless 
measures" in the next budget to broaden tax base, specially by 
effectively recovering income tax, GST and agriculture income tax.

The initial recommendations of the Pasha committee, sources said, 
called for collecting at all costs general sales tax (GST) from the 
next financial year for which the system was being simplified. A 
number of new measures would be announced in the new budget to deal 
with the issue. 

 "Those who have not been paying their due income tax or were still 
out of the tax net will have a real rough time" a source said.

Similarly, the government has been proposed to adequately tax the 
landed gentry so that considerable tax on agriculture income could 
be recovered from the next financial year. The collection target of 
Rs2 billion set by the previous government was termed as highly 
inadequate in this behalf.

The Pasha committee also recommended to the government to encourage 
the competent and honest officers of the tax department by giving 
them important assignments. Many of them had either been given 
insignificant positions or made OSDs by the previous government.

The debt management committee headed by a prominent economist Dr 
Pervez Hasan, sources said, also believed that the government 
should lessen its debt burden by finding out new resource 
mobilization. In this regard the members of the committee believed 
that revenues and exports needed to be drastically increased. The 
government was told that there was a need for early restructuring 
of the Central Board of Revenue (CBR) and the Export Promotion 
Bureau (EPB) to increase their revenues and exports, respectively.

The sources said that the government has also been recommended to 
retire most expensive and short term debt mounting to about $8 
billion, out of total of $38 billion foreign loans. It was 
suggested that the Privatization Commission should be reactivated 
so that the process of disinvestment could be accelerated.

The debt management committee had constituted three sub-committees 
to deal with the issue of debt by covering the aspects of macro 
framework, effectiveness of foreign aid and the creation of a 
vigorous set up.

The committee has been directed to work out medium and long term 
strategy to reduce the country's huge debt burden by having inputs 
from three sub-committees. The members of committee so include 
Secretary General Ministry of Finance Moeen Afzal, Economic Advisor 
of the Ministry of Finance, Dr Ashfaq Hasan Khan, Secretaries 
Economic Affairs Division (EAD) and Statistic Division and 
Additional Secretary Government of Punjab, Tariq Sultan.

The committee has also been entrusted the task of further getting 
interest rates of the commercial banks and the National Saving 
Schemes cut down with a view to reduce the accumulated burden of 
domestic debt. So far banks have reduced their interest rate by 4 
per cent and the National Saving Directorate has slashed interest 
rate by 2 per cent.

Prize schemes to boost remittances
Mohiuddin Aazim

KARACHI, March 14: Habib Bank would spend about Rs 200 million per 
year in the shape of prizes on Crorepati remittances scheme to 
bring back into its coffers what it had lost in winding up of 
Crorepati deposits scheme.

Senior HBL officials say the bank hardly retained 10 per cent of Rs 
20 billion plus it had generated through Crorepati deposit scheme 
phased out by the end of 1999. "We can regain through our new 
product a major chunk of the amount that flew out on winding up of 
the scheme," said an HBL official adding that it would also 
increase home remittances.

At present $275 million worth of foreign exchange remittances are 
routed through Habib Bank every year. HBL executives say the figure 
could rise to $360 million-thanks to Crorepati remittance scheme.

The State Bank gave a go-ahead to major banks early this year to 
launch prize schemes to attract more of foreign remittances. The 
move came after SBP realized that overseas Pakistanis needed some 
incentives to send foreign exchange back home through banks because 
they were getting a much better exchange rate in informal market.

Home remittances fell to $519 million in July-December 1999 from 
$581 million in a year-ago period.

Encouraged by SBP, United Bank introduced Remit N Win scheme 
towards the end of January. The bank retained the magic title of 
ZarAmad for the cheques to be used in the scheme in order to win 
back what it had lost in winding up of ZarAmad deposit scheme.

United Bank had managed to retain around Rs 4 billion in its 
coffers at the end of 1999 out of Rs 13 billion it had attracted 
through its two deposit incentive schemes-CarAmad and ZarAmad.

Senior UBL officials say the bank has attracted around Rs 1.5 
billion through its Remit N Win scheme in the past one and a half 

They are confident that the success of Remit N Win scheme may not 
be eclipsed by the Crorepati remittance scheme of Habib Bank.

"Total HBL payout in this scheme is Rs 198 million per year as 
compared to Rs 390 million on our scheme," said a UBL executive.

UBL is offering one weekly prize of Rs 5 million and 100 Umrah 
tickets of Rs 25,000 each. Thus total sum of money being spent on 
the prizes every week comes to Rs 7.5 million-or Rs 390 million per 

National Bank may float 10-20pc shares on KSE
Kamal Siddiqi

KARACHI, March 15: Sporting handle-bar moustaches and wearing his 
standard shalwar-kameez suit, Mohammedmian Soomro looks more a 
feudal than the banker that he actually is: the president of 
Pakistan's largest bank, 
the National Bank of Pakistan.

The bank head office is embarrassingly big, with large offices, 
several ante-rooms and row of secretaries sitting in luxurious 
surroundings while the actual bank branch below, where the money is 
made, is much different in its appearance.

However, to his credit, Mohammedmian Soomro has been able to change 
things for the better by turning around this state institution 
which was known more for its "Sohni Dharti" advertisements than the 
business it did.

Brought in by the previous government as part of a strategy to turn 
around the public sector banks, Mohammedmian Soomro was the first 
private sector banker to be inducted by the then government for 
this job and, would be, the last man to leave as well, being the 
only one taken on to face another challenge at yet another public 
sector bank.

In his time at the NBP, Soomro has changed the bank's fortunes 
within a span of three years from the loss posted of Rs 1.26 
billion in 1996 to an estimated pre-tax profit of Rs 3.5 billion in 
1999. Soomro says that the profit, which is after amortization of 
cost of the bank's voluntary retirement scheme, could be higher by 
at least Rs 1 billion if a pending issue on Steel Mills bonds is 
finalized with the government.

The significant growth in profitability has been through the bank's 
own resources, and without any injection of equity from the 
government. Deposits have grown by 8% YoY to Rs 297 billion in end 
1999 despite the fact that the bank offered no lottery scheme. In 
November 1999, the NBP was given a rating of E+ by Moody's, which 
is the highest amongst ratings assigned to large Pakistani banks.

Behind these achievements is Mohammedmian Soomro, who himself comes 
from a prominent political family but has been a banker all along. 
Trained as a nuclear physicist from Punjab University who later 
went on to do an MBA from the United States where he was then 
picked up by Bank of America in 1975, Soomro says that his three 
years with the National Bank have been "fulfilling and 

Soomro will move on to take charge of the Agriculture Development 
Bank of Pakistan, which may be smaller in size but has problems 
much larger than the NBP.

Muslim Commercial Bank plans to shut 96 branches
Mohiuddin Aazim

KARACHI, March 15: Muslim Commercial Bank plans to shut down 96 
commercially unviable branches across Pakistan after getting a go-
ahead signal from State Bank.

"We are waiting for the State Bank permission to shut down 96 such 
branches that had been unprofitable for past three years," said a 
senior official of the bank.

The State Bank considers those areas un-banked where there are no 
branch of any bank within 2 kilometre radius. The MCB official said 
since all the 96 branches that his bank planned to shut down were 
located in un-banked the SBP permission was a must. He said MCB had 
closed 112 branches in 1998 but all of them were located in banked 
areas. At present MCB is running 1206 branches in all.

MCB officials say the branches they have decided to shut down are 
located in such remote villages and hamlets that making them 
profitable was not possible. They say that most of these branches 
provide sort of social service to the rural population: they also 
realize that closing down of these branches would mean depriving 
the local public of a social cover.

"That is why we are not pressing the State Bank hard to let us shut 
them down," a senior executive said. We are cooperating with SBP 
officials in their efforts to find a solution to the problem of 
maintaining unprofitable branches."

Sources close to SBP say SBP officials are evaluating pros and cons 
of a couple of options in this respect. One of the options is that 
commercially unviable bank branches should either be put in the use 
of the proposed Micro Credit Bank: the other option is to let post 

offices use them for utility bills collection and yet other options 
is to allow the banks concerned to start periodical and limited 
banking through these branches-say once every week.

"We had a meeting with SBP Deputy Governor R. A. Chughtai on this 
subject last week and we discussed these options in detail," said a 
senior MCB official. He said it was no upto State Bank to decide 
what course of action should be adopted by the banks that want to 
close their unviable branches.

The official said the closure of 96 branches would not result in 
redundancies: these branches employ roughly 300 people all of whom 
would be transferred to other branches. "We are not planning any 
golden handshake. We will redeploy these 300 employees efficiently 
because many branches are understaffed."

Half of PTCL staff may be laid off
Bureau Report

ISLAMABAD, March 15: Large-scale retrenchment is likely to be 
carried out in the Pakistan Telecommunication Company Limited 
(PTCL) soon after Eid-ul-Azha, Dawn has learnt.

The downsizing in the PTCL will be undertaken by the government on 
the recommendations of Goldman Sachs - financial advisers to the 
company appointed by the Privatisation Commission for the sale of 
26 percent shares to strategic investors, an official source said.

The downsizing in the company has been necessitated by the 
technological advancement in the field of communication, which has 
sharply reduced customers-employees ratio. There are an estimated 
3,000,000 subscribers of the PTCL service while the total staff 
strength is over 50,000.

According to international standards, this ratio is regarded as 
very high and, as such, it would be brought down by reducing the 
staff strength, at least, by 50 percent, the source added.

The Chief Executive, Gen. Pervez Musharraf, had also given a go-
ahead signal to the downsizing plan in the PTCL. The go-ahead 
signal was given by the chief executive at a recent briefing on the 

Some executives of the company who had been employed by the Muslim 
League government at a very high remuneration, are also likely to 
come under the axe.

The financial advisers have reported that some major players in the 
field of telecommunications at the international level have lost 
their interest in the PTCL because of the delay in its 

The current chairman of the PTCL had been appointed by the previous 
government with an understanding that he would facilitate 
expeditious privatisation of the company.

Given the tremendous growth potential in the field of 
telecommunication and the target set by the company for providing 
one telephone for every 100 people in rural areas in the coming 
years, some people, however, believe that retrenchment would not be 
advisable. With the expected growth, the staff-subscriber ratio 
would automatically come down to the desired level, he added.

Action against 120 officials soon
Sarfaraz Ahmed

KARACHI, March 12: Inquiries conducted by various agencies have 
found over 120 senior government officials involved in financial 
irregularities, mal-administration, and known for their rigid 
towards present government's plan to bring about structural reforms 
in the system.

According to some well-placed sources, the inquiries that were 
conducted in the interest of national reconstruction to introduce 
reforms have recommended sacking, transfer etc, of these officials 
in order to implement the decisions with regard to structural 
changes in the administration.

The sources said these officials belong to various ministries, 
departments etc, and they have their postings in grades 18 and 

The sources said that removal and transfers on a massive scale will 
form the basis of Chief Executive's programme to introduce 
structural changes in the administration, which has been plagued by 
corruption, mal-administration, inefficiency and rigidity in 
attitude towards change in the status quo.

The chief executive, the sources said, is expected to spell out his 
plan with regard to structural changes in the system in his 
Pakistan Day address to the nation with a pledge that the 
accountability process would remain across the board.

The structural reforms would entail formation of advisory boards 
comprising individuals known for their impeccable character and 
expertise in the relevant fields, the sources maintained.

His address, the sources said would be followed by various 
decisions, including the sacking of officials and massive 
reshuffling in the administration setup.

The inquiries on the working and conduct of the bureaucracy all 
over the country have found out that there are hundreds of 
officials holding posts at various levels and they were neither 
interested in improving their working nor they were in a mood to 
welcome any shift in the status quo.

Besides, inquiries have also discovered incriminating evidence 
against a number of officials who have been found involved in 
financial irregularities and misappropriation of government funds, 
the sources said.

Non-tariff barriers may go: Import of textiles under study
Sabihuddin Ghausi

KARACHI, March 11: The government is taking up steps to further 
liberalize the trade by phasing out the non-tariff barriers for 
imports and opening up market for foreign textile products and 
other items and framing the new economic laws and regulations to 
qualify for getting a $250 million loan from Asian Development 

The ADB has offered this loan for Trade Export Promotion and 
Industry programme (TEPI) which demands compliance of a set of 
conditions that could lead to further trade liberalization by way 
of withdrawal of import-related procedural restrictions except on 
those which are related to health, safety, security and 
environment. These restrictions would be valid only on acceptable 
standards set by the World Trade Organization and other 
international and multilateral agreements.

 A high powered Export Modernization Steering Committee that 
includes secretaries of several federal ministries, chairman of the 
Central Board of Revenue, senior representative of State Bank of 
Pakistan and members of the private sector organizations is taking 
stock of the steps taken so far and the further measures needed in 
direction of the compliance of these conditions.

Officials say that the maximum import tariff rate has already been 
fixed at 35 per cent and number of non-zero tariff slabs have been 
reduced to four since March last year. Multiple rates for the end 
users of Pakistani products have already been reduced and more 
steps in this direction are to be taken in next budget.

The ADB wants the withdrawal of exemption powers of the CBR which 
the officials maintain have been curtailed to a great extent under 
an amendment made in the 1969 Customs Act. However, the PML 
government reintroduced certain exemptions in the 1999 Finance Bill 
in respect to the housing and transport scheme on which the ADB 
expressed objections.

Another condition set by the ADB on Pakistan government is to 
reduce the number of outstanding tariff-related user-specific SROs 
to 35 and suggested rescinding of a number of time-bound 
notifications. These included SROs related to deletion programme 
and some key ones related to thermal power sector projects for 
which agreements were reached in 1994 Power Sector Policy.

Pakistan government has already committed to the ADB to remove 
import tariff barriers and withdraw the procedural restrictions on 
import. The ADB was informed that at present only 45 categories of 
import items are subjected to health and security requirements 
while 21 categories of items are subjected to procedure 

Export procedures have been simplified in case of cotton yarn, 
rice, cement, meat, a variety of engineering goods that are 
certified under ISO 9000 to 14,000 series and of the films.

Abolition of Octroi and Zila tax in the 1999-2000 budget was also 
in compliance of the condition set by the ADB that suggested a 
study of the implications of the provincial and local taxes on 
import of goods for export. The ADB has suggested to study the 
implications of stamp duties which is now being done by the finance 

The ADB also wants the State Bank of Pakistan to progressively 
reduce exporters reliance on preferential interest rates and types 
of the financing. By implication this condition seeks phasing-out 
of the export refinance. The SBP has indicated to the government 
that the June 30, 2000 deadline set for total abolition of export 
refinance is yet to be negotiated with the International Monetary 

Winding up of the Cotton Export Corporation and Rice Export 
Corporation was done in compliance of the ADB condition attached 
with the TEPI loan. The ADB condition for the loan is to dispose 
off the assets of these two corporations and those assets which 
would be acquired by the Trading Corporation of Pakistan and to be 
sold off by June 2001.

Accordingly, the ADB has been informed that out of total assets 
worth Rs1.02 billion of the CEC, assets valuing Rs123.98 million 
have been disposed off. In case of RECP the estimate of assets is 
Rs798.11 million, out of which Rs257.12 million have been disposed 

Pakistan government has been asked to frame laws on anti-dumping 
and countervailing duties, a legal cover for the Board of 
Investment and draft a legislation for setting up of the National 
Industrial Zones Authority (NIZA), amend the schedule of Price 
Control and Hoarding Act 1977 and also carry out amendments in 
Monopolies and Restrictive Trade Policies (Control and Prevention) 
Ordinance 1970, redraft and rationalize the labour- related laws 
and enact a new Patent and Design Act.

According to the officials the government has already committed to 
carry out all these conditions and had in fact got the Anti-Dumping 
and Countervailing Duty Bill approved by the suspended National 
Assembly in last July. Its enforcement is held up for want of 
ratification by the Senate which has now been suspended. The 
government may now enforce an ordinance with the next year's 

Back to the top
Lost in the woods
Ayaz Amir

�I assure you when it comes to choosing between the constitution 
and the country I will choose the country." Gen Ayub Khan-1958

"Constitution is meaningless if God forbid Pakistan does not 
exist." Gen Pervez Musharraf-2000

FOR all their loud patriotism - worn for the most part on the outer 
side of their sleeves - Pakistan's military saviours have never had 
much faith in their country's inherent strength. Only this can 
account for their fervent belief that but for their timely 
interventions in the political sphere the country would have gone 
to the dogs or ceased to exist.

As the above quotes demonstrate, these saviours have also tended to 
look darkly at the constitution as if constitutionalism left 
unchecked - that is, not tempered by the benign influence of 
militarism - posed a threat to national integrity. This theory of 
politics is pretty self-serving. It also reveals a primitive state 
of mind.

To state the obvious, a constitution, or indeed any system of laws, 
is not a divine covenant. It is a distillation of human experience 
meant to create (1)a framework for the orderly conduct of politics 
and (2) checks and balances against arbitrary or wilful behaviour. 
The caesar who chafes at such restraint is in fact saying that 
above all mortals he knows best what is good for the nation and in 
the exercise of this function let no man dare question him.

The wonder is that military saviours should at all seek the mantle 
of legitimacy from judicial hands. They would save themselves much 
effort, and the judiciary much embarrassment, if they were to 
remember that a coup d'etat's claim to legitimacy rests on its 
achievements. If it secures the public good it needs no seal of 
approval from any quarter. If it adds to the misery of a people 
nothing can save it from the condemnation of history.

If there had been anything remotely resonant about the Musharraf 
regime, nothing would have been heard, at least not for some time, 
about the need to restore democracy. But in five months time its 
lackadaisical performance has led even the greatest enthusiasts of 
military rule to a more sober assessment of its capabilities. No 
one is expecting miracles anymore. A lessening of the prevailing 
confusion would do but even that is not forthcoming.

As time passes less and less is being heard of General Musharraf's 
initial seven-point agenda. What has happened to the removal of 
inter-provincial disharmony, for instance, about which there was 
such a great fuss in the beginning? Other items, like devolution of 
power to the districts, are being flogged to death without 
realizing that a military set-up and devolution of any sort is a 
contradiction in terms. Ideas, in any case, seem not to be this 
dispensation's strongest point. Which is why the nation, helpless 
as always, is being treated to a course in elementary civics.

Whether in the fullness of time some crumbs are devolved to the 
districts or not, the army monitoring teams have already managed 
another kind of devolution: in the cities and towns where they are 
stationed they have looked at everything through the prism of 
municipal and sanitary administration. The great charge against 
General Zia was that he had depoliticized the nation. General 
Musharraf might yet succeed in municipalizing whatever passes for 
national discourse in Pakistan. The National Security Council is a 
redundant body, the cabinet a lack-lustre affair. It is a measure 
of the excitement these two bodies are generating that newspaper-
reading has become a chore in this fourth military republic.

In fact, not to put too fine a point on it, this regime is 
beginning to look like a carbon copy of its three predecessors. 
Naturally, the dramatis personae are different. But the play is the 
same. Even the lines are the same. Imagine the growing 
disenchantment of the champions of military rule. They had welcomed 
the military takeover on October 12 thinking that a new beginning - 
nay, the long-awaited moment of redemption - was finally at hand. 
Much of that revolutionary fervour has since subsided as it has 
become increasingly clear that it is not so much a brave new world 
we are entering as seeing a repeat performance. If, as a 
consequence, a feeling of dejection is taking hold, it is scarcely 

There is also a theoretical problem which dogs this regime. The 
case for its existence is built on a single premise: that in his 
attempt to dismiss General Musharraf, and appoint Lt-Gen Ziauddin 
Butt in his place, Nawaz Sharif committed the cardinal sin of 
playing politics with the unity of the army command. All the 
evidence we have reinforces this charge. Sharif showed the army a 
red rag and the army reacted like an enraged bull.

In other words, Sharif forced the issue and his removal from power 
was therefore justified. So far so good but what about the train of 
events following his dismissal? If Sharif deserved what he got, 
what has the nation done to deserve the bitter and unwanted 
medicine being pushed down its throat? Suspending the Constitution 
and the assemblies, vilifying the political process, dealing 
harshly with selected political figures and drawing a self-serving 
distinction between 'real' and 'sham' democracy: there is no 
inevitable link between these steps, which affect the nation as a 
whole, and Sharif's offence which was his alone or that of his 
closest advisers.

Politicians may be bad and indeed since 1985 they have not given a 
good account of themselves. Through a transparent and honest 
process let those who have sinned the most be punished. But why 
should the nation as a whole be made to suffer for their faults? General 
Musharraf and his colleagues are under the impression that the 
masses are rooting for them. They are mistaken. The masses want 
change but having been through these experiments before, they are 
also coming round to the realization that the answer to their 
dreams does not lie in the rhetoric and brave postures currently on 

Thanks to military rule, Pakistan is marking time. It needs to move 
forward. It needs some dynamism in its affairs. Its people need 
hope and a sense of confidence about the future. This is not a 
nation without talent or promise. But it needs a sense of direction 
which military rule, even with the best intentions in the world, 
and especially of the kind that periodically rears its head in 
Pakistan, cannot give.

Here mention might be made of a strange argument that has acquired 
currency among the drawing room classes (people in the streets 
having a better appreciation of political realities). Confronted 
with the pitfalls of military rule, they respond with the retort: 
do you want the return of Nawaz Sharif? As if the only choice 
before the hapless people of this land was between two pieces of 
real estate: Raiwind and GHQ. If Nawaz Sharif was a disaster, and 
there is little question that he was, there is no law which says 
that the nation should plunge immediately into another disaster.

National life may have been derailed on October 12 but it should 
not mean that it remains derailed forever. We need a grand meeting 
of minds between soldiers and politicians so that the country, as 
quickly as possible and without incurring any more international 
odium, can be returned to the democratic path.

An arbitrary list (an adjective used advisedly) of the corrupt 
names in politics can be drawn up so that these grandees are 
debarred from politics. My schoolmate Lt-Gen Amjad of NAB should 
become subject specialist of wars of attrition in the National 
Defence College and should have nothing to do with the preparation 
of this list because at his pace even the turtles will want to go 
home. Lt-Gen Aziz can head a permanent committee on Kashmir 
affairs. (Benazir Bhutto's one stroke of genius during her two 
terms as prime minister was to make Nawabzada Nasrullah Khan 
chairman of the Kashmir committee, a task which, besides advancing 
the national interest, kept the venerable Nawabzada busy.) The 
Chilean model, whereby General Augusto Pinochet was made Senator 
for Life when Chile was returned to democracy, can also be studied 
for its application to our circumstances.

In short, anything that will get us out fast from the bleak and 
lonely woods in which, for want of a guiding star, we are rapidly 
losing our way.

Judgment on riba: an analysis
Iqbal Jafar

The function of divine revelation is not to suspend human mind and 
to take over the province of independent human reasoning too.

- The Supreme Court of Pakistan

THE judgment of the Shariat Appellate Bench of the Supreme Court on 
riba is an impressive document. It runs into more than two hundred 
thousand words, disposes of 55 appeals against the orders of the 
Federal Shariat Court regarding provisions of interest and other 
related matters in 20 different Acts and Rules, and deals with the 
controversy over the permissibility of bank interest under the 
Shariah from every possible angle.

In the course of hearings spread over a total of 44 days, the court 
considered written and oral submissions made by 33 ulema, scholars, 
economists, bankers, and by a 7-member delegation of the Islamic 
Development Bank, led by its president, besides the counsel of the 
parties. The court also received books and articles by 12 other 
scholars who did not personally participate in the proceedings. The 
final outcome of this extensive scholarly inquiry is a document 
that is likely to become a source book on the subject.

There is, however, one aspect of the proceedings before the court 
that leaves the readers a little disappointed. What disappoints the 
reader and what, in fact, disappointed the court itself is the lack 
of interest, bordering on dereliction of duty, shown by the counsel 
representing the government. The court has observed, with obvious 
displeasure, that the counsel for the Federation sought adjournment 
after covering only one-fourth of his arguments, and did not return 
to conclude his arguments "despite specific order of the court".

The Attorney General, "despite being conscious of the questions 
raised in the application moved by the Federation and the viewpoint 
of religious scholars on the question, did not enter appearance to 
render assistance to the Bench on the important constitutional and 
legal questions in his capacity of the highest law officer of the 
country, what to say of presenting and elaborating the point of 
view of the federal government."

Regarding the lesser legal lights representing the government, the 
court has observed that the Additional Advocate-General, Punjab, 
had stated hat he intended to argue after completion of arguments 
by the counsel of the Federation, but did not argue. The Additional 
Advocate General of the NWFP too did not argue, and submitted only 
a brief note.

There is also reason to believe that the Federal Shariat Court had 
not taken kindly to those who had argued that bank interest was not 
riba of a kind that is prohibited under the Shariat. This can be 
inferred from the complaint by Mr. Khalid M. Ishaque before the 
Bench that the Federal Shariat Court had not allowed him to 
elaborate on certain matters, nor dealt with those aspects, nor 
considered them in its judgment. He pleaded, unsuccessfully, that 
the case be remanded to the Federal Shariat Court.

These imperfections notwithstanding, the judgment handed down by 
the Shariat Appellate Bench does try to balance too many pleadings 
on one side and too few on the other, and at the end of a wide-
ranging discussion of various aspects of the complex matter, has 
given 11 separate directions about what is to be done, how and 

The best part of the court's order is that all the five Provincial 
Money-Lenders Ordinances, that provide legal cover to money lending 
by individual lenders (invariably at usurious rates) shall cease to 
have effect from March 31, 2000. Thus, the abhorrent business of 
various forms of money-lending would, at last, cease to be legal.

The most important part of the order, that will effect the whole 
financial system of the country, is the one that deals with bank 
interest. It has been held by the court that "any amount, big or 
small, over the principal, in a contract of loan or debt is riba 
prohibited by the Holy Quran, regardless of whether the loan is 
taken for the purpose of consumption or for some production 
activity." Consequently, the "present financial system, based on 
interest, is against the injunctions of Islam as laid own by the 
Holy Quran and Sunnah." The order of the court concludes by laying 
down that the other laws (i.e. other than Money-Lenders Ordinances 
that would cease to be operative from March 31, 2000) that have 
been declared to be repugnant to the injunctions of Islam shall 
cease to have effect from June 30, 2001.

After the appointed day, the banks shall, as explained in the 
judgment, be "primarily financial intermediaries through equity 
participation or partnership." The banks may also "work as holding 
companies and may, where feasible, also directly engage themselves 
in commercial, industrial, agricultural and other enterprises and 
businesses" in addition to providing some other services subject to 
the fundamental condition of equity and risk participation.

In reaching these conclusions the court has rejected the view that 
bank interest was not riba prohibited under the Shariah, though the 
view has the support of some highly respected scholars and ulema, 
namely, Mufti Muhammad Abduhu, renowned Egyptian scholar, his 
celebrated disciple Sayyid Rashid Rida, Shaikh Muhammad Sayyid 
Tantawi, the Grand Shaikh of al-Azhar, contemporary Syrian scholar 
Dr. Maroof Daoulibi, Dr. Fazlur Rahman, late Justice Qadeeruddin, 
Mr. Khalid M. Ishaque, and a number of other scholars and ulema.

The court has considered the views of these scholars, but has 
accepted the other view held by equally renowned ulema and 
scholars. Such being the case, it is pointless to engage in that 
debate here. Instead, one may only acknowledge that there are two 
views, and that in the academic circles this debate may never be 
conclusive. So far as Pakistan is concerned, the controversy has 
now been finally and legally settled by the Supreme Court.

But adopting one of the two views on the nature of bank interest is 
not the end of our labour of faith, as implementation of the new 
system in actual practice is, perhaps, an even greater problem. As 
pointed out in the note submitted by Mr. Muhammad Ashraf Janjua, 
Chief Economic Adviser of the State Bank, a number of Muslim 
countries, including Pakistan, Iran and Sudan, have tried to 
introduce a comprehensive Islamic system during the past two 
decades, but there has not emerged any example of a really Islamic 
system of finance and banking.

The reason, perhaps, is that interest-free banking that depends on 
sharing the profit and loss of the borrowers cannot be established 
by merely amending the laws relating to interest. The scholars and 
the judges who have argued in favour of interest-free banking agree 
that the question of interest should not be treated as an isolated 
matter. According to Dr. Umar Chapra, who argued in favour of 
abolishing bank interest and has been quoted extensively in the 
judgment, any "attempt to treat the prohibition of riba as an 
isolated religious injunction and not as an integral part of the 
Islamic economic order with its overall ethos, goals and values, is 
bound to create confusion."

The Council of Islamic Ideology, as quoted in the judgment, is also 
of the view that "simultaneously with the introduction of interest-
free banking system, strenuous efforts shall have to be made on a 
wide front to inculcate in society basic virtues such as the fear 
of Allah, honesty, trustworthiness, sense of duty and patriotism."

Justice Wajihuddin Ahmed has dealt with this question in greater 
detail in his separate concurring note. He begins by saying that: 
"it has been said, and to my mind correctly, that a riba-free 
economy may be a non-starter if the same is introduced in a 
continually selfish, dishonest and corrupt socio-economic milieu, 
such as that which regrettably prevails in countries like 
Pakistan." He, then, goes on to enumerate the steps necessary to 
rid the system of numerous evils, to create an enabling 

The steps enumerated by him may be summarized as follows: (1) an 
all-pervasive credit rating of the existing and proposed 
agricultural, commercial, industrial or other production ventures 
to be effected compulsorily; (2) a quantitative and qualitative 
change in the practice of auditors, with penalties provided for 
irresponsible conduct and for misconduct; (3) an all-out effort to 
document the entire gamut of trading activities; (4) spreading of 
tax burden equitably, and exemplary punishment for evasion not 
merely of assessees but also of conniving officials; (5) 
transparency and purposefulness in managing the shift to a riba-
free economy; (6) no further loans to the government and its 
agencies; (7) quick debt-equity swap in so far as domestic loans 
are concerned; (8) firm resolve not to obtain any more foreign 
loans while seeking a write-off of foreign loans here possible; (9) 
a quick swipe may be directed at those who illicitly hoard abroad 
well over $100 billions; (10) all luxury imports must forthwith 
cease; (12) private automobiles be phased out in favour of public 
transport both on intra- and inter-city basis; (13) substantial 
export of value-added goods should be a priority area; (14) no more 
smuggling; (15) land reforms of the Ayub and Bhutto eras need to be 
duly enforced; (16) all bureaucrats, including bankers, be required 
to submit details of assets owned by them and by members of their 
immediate family; (16) cleaning up should not be confined to the 
bureaucracy alone, but should extend to judiciary, politicians and 
armed forces also.

If we look at the wish-list beginning from "strenuous efforts to 
inculcate the fear of Allah, honesty, trustworthiness, sense of 
duty and patriotism" to phasing out of private automobiles, we 
would realize that this complex and wide-ranging transformation 
would not merely be a change in the financial system. What is being 
envisaged is nothing less than the emergence of a new breed of men. 
It is not, one must concede, beyond the realm of reason that such a 
Man may, indeed, emerge, but is it within the realm of possibility 
to expect that this new Man - Homo Islamicus - would, or can, merge 
out of this 'selfish, dishonest and corrupt socio-economic milieu' 
by the 30th day of June, 2001?

Moin Khan determined to restore Pakistan's image

KARACHI, March 14: Pakistan's new cricket captain Moin Khan on 
Tuesday said he needs all the support he can get to restore 
Pakistan's dwindling image in international cricket.

"I can't restore the image singlehandedly, I need the support of 
the whole team and the whole nation," he told reporters during the 
on-going third Test against Sri Lanka.

Moin was appointed Pakistan's captain on Monday after Saeed Anwar 
stepped down from the job.

"The results are causing problems but I am not afraid of failures 
and once we play more positively the problems will be over," he 

"The morale of the team is down but I will do my best to bring the 
team out from this lean patch and go back on winning track," Moin 

Moin said the lack of continuity in Pakistan cricket is affecting 

About his decision to decline an offer to lead Pakistan before the 
Sri Lankan series, Moin said: "There came a communication gap at 

that time and I was not ready plus Saeed Anwar was there to lead 
and now no one is there to lead the team.

"I have accepted this as a challenge," he said. Pakistan will 
feature in a tri-nation limited overs tournament in Sharjah from 
March 22 also involving India and South Africa.

"Our main target is the tour to the Caribbean where we have never 
won a series," he said. "If you look at the present West Indian 
team I think we are better as a unit so I am confident we will beat 
them," he said.

Pakistan tour West Indies in April to play a three-match Test 
series and a tripartite one-day series also involving Zimbabwe.-AFP

Pakistan crush Sri Lanka to win Karachi Test
Samiul Hasan

KARACHI, March 15: Pakistan crushed Sri Lanka by 222 runs with a 
day to spare to win the third cricket Test here at the National 
Stadium on Wednesday. Sri Lanka, who clinched the series 2-1, 
found themselves hapless against the charged-up Pakistanis and were 
dismissed in just 46 overs while scoring 228 in pursuit of a record 
451-run victory target.

Earlier, Pakistan were bowled out for 421 after resuming their 
second innings on Wednesday morning at 375 for seven.

Pakistan's excellent and convincing victory not only helped them to 
boost their morale after a spate of losses but also maintain their 
remarkable 45-year unbeaten record at the National Stadium. They 
now have 17 victories and 17 draws.

The victory also ended a five-match win drought after being 
whitewashed in Australia and then losing back-to-back Tests to Sri 
Lanka in Rawalpindi and Peshawar.

The combination of coach Javed Miandad and skipper Moin Khan turned 
the fortunes of Pakistan cricket. The team which looked disjointed 
in the last five months, is gradually regrouping into a winning 

The batsmen occupied the crease and put decent score on the board 
which helped the bowlers to fire on all cylinders without fearing 
that they had to defend a small total besides taking wickets.

The fielders backed their bowlers by holding catches and in the 
meantime producing three run-outs, including two in Sri Lanka's 
second innings, which speaks of their agility and alertness.

The star performer of the penultimate day's play was speedster 
Waqar Younis who bowled at a sizzling pace to virtually break the 
back of the Sri Lankan batting. He utilized all his experience when 
he produced speed and swing from the pitch which looked to have 
eased down.

It was after a long time when Waqar was seen in full cry. He seemed 
to have regained his customary rhythm of old. The way he shattered 
Russel Arnold's confidence, after trapping Sanath Jayasuriya with 
an inswinger which deceived the left-hander, was in a class of his 

Wasim picked in team for Sharjah

 KARACHI, March 15: Former captain Wasim Akram on Wednesday was 
named in a 15-man squad for the Sharjah triangular series 48 hours 
after being dropped on fitness grounds.

However, Wasim will have to prove his fitness before the team 
leaves for the series involving South Africa and India and starting 
in the desert city from March 22. Pakistan play their opening game 
against India on March 23.

"Wasim assured that he has fully recovered for a groin injury. He 
has been selected but will have to prove his fitness. Team coach 
Javed Miandad has been directed to report on Wasim's condition 
before the squad leaves on 20th," chairman of selectors Wasim Bari 

Wasim Akram bowled just 13 deliveries in the first Test at 
Rawalpindi before limping off with a groin injury which sidelined 
him for the rest of the series.

The major exclusion from the squad was of Ijaz Ahmad who was named 
in the 18 probables.

Reliable sources said it was because of the deadlock on Ijaz that 
delayed the announcement of the team for two days.

Saeed Anwar (who made unavailable on Tuesday for fitness reasons), 
Irfan Fazil and Shahid Nazir are the other three players who missed 
the bus after being named in the 18 probables.

The team is a combination of three openers, four middle-order 
batsmen, four past bowlers, two spinners, a wicket-keeper and a 
genuine all-rounder in Abdur Razzaq.

Wajahatullah Wasti, Naveed Qureshi, Imran Nazir and Shoaib Malik 
have been picked in the squad after being overlooked for the three-
match one-day series against Sri Lanka which the tourists won 3-0.

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