------------------------------------------------------------------- DAWN WIRE SERVICE ------------------------------------------------------------------- Week Ending : 07 April 2001 Issue : 07/14 -------------------------------------------------------------------
Contents | National News | Business & Economy | Editorials & Features | Sports
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CONTENTS ===================================================================
NATIONAL NEWS + SC orders retrial of Benazir, Asif + Mujahideen groups reject Indian offer for talks + India not serious for talks, says FO + Construction of fence to continue: India + Hangu still under curfew + President to get back dismissal powers: Amendments being drafted + Shaukat calls for IMF waivers + WB offers $100m for drought victims + Water shortage: Kharif target lowered + Masood seeks diplomatic pressure against Pakistan + Finance ministry aggravating crisis, says Wapda + Musharraf wants early PTCL sale-off + Pakistan, ADB to sign poverty reduction accord in November + CE orders big raise for govt employees: Proposal due next month --------------------------------- BUSINESS & ECONOMY + 10% hike in power tariff every year: Plan approved by Musharraf + Export finance rate up by 1.5pc: Subsidy to go on IMF demand + 15% GST imposed on pesticides, urea + Banks allowed to use FCY deposits freely + ST revenue grows by 28.56pc in July-March + PC asked to resolve its policy level issues soon + Pakistan to lose Rs2bn on petrol export + Oil industry wants rise in CNG prices + Rs268 billion taxes collected + 'Policy board' suggested for taxation strategy + WB to help develop private gas pipelines: Team due on 9th + Foreign banks show mixed performance + Gas price controversy and the fertilizer plants --------------------------------------- EDITORIALS & FEATURES + Are we stupid? Ardeshir Cowasjee + The Pakistani Sahib: only half there Ayaz Amir + Snakes & ladders, musical chairs Irfan Husain ----------- SPORTS + PCB portraying players as villains in sad scenario + Pakistan may hire foreign coach + Miandad humiliated for second time + Nur Khan urges PCB boss to accept rot and step down

SC orders retrial of Benazir, Asif 
Rafaqat Ali

ISLAMABAD, April 6: The Supreme Court on Friday set aside 
corruption convictions awarded by the LHC's Ehtesab bench to 
Benazir Bhutto and Asif Zardari, and ordered a retrial of the case.

In a short order, the seven-member bench accepted the appeals of Ms 
Bhutto and Mr Zardari against the 1999 conviction. The detailed 
judgment would be announced later.

The former prime minister and the suspended senator had requested 
the apex court to acquit them honourably.

Justice Bashir Jehangiri, presiding judge of the bench, announced 
the verdict at 10.50am: "Reason to be recorded later in the 
detailed judgment, we accept the appeals and set aside the impugned 
judgment recording conviction against and awarding sentences to the 
appellants, and send the case to a court of competent jurisdiction 
for retrial."

On April 15, 1999, an Ehtesab bench consisting of Justice Malik 
Qayyum and Najmul Kazmi of the Lahore High Court had convicted Ms 
Bhutto and Mr Zardari. They were sentenced to undergo five years' 
simple imprisonment each, and pay $8.6 million fine each.

The Ehtesab bench had ordered their disqualification as members of 
parliament for five years, and forfeiture of their property made 
with money acquired through corruption.

The Ehtesab bench had held that the pre-shipment inspection 
contract to the Swiss company, SGS, had been awarded by the former 
prime minister "alone" at the behest and abetment with Mr Zardari.

The prosecution case was that the contract had been awarded in 
consideration of 6 per cent commission of the total amount received 
by the SGS from the government of Pakistan.

The prosecution had alleged that the commission had been paid to an 
offshore company, Bomer Finance Inc., owned by Mr Zardari through 
his fiduciary agent Jens Schlegelmilch. The ultimate beneficiaries 
of the commission were Mr Zardari and Ms Bhutto, according to 

Farooq Hameed Naek, counsel for appellants, said after the 
judgment: "I am satisfied ... but not happy. I was expecting 
honourable acquittal but this is the court's judgment."

The military government had inherited the case from the PML 
government and defended the judgment vehemently, spending over Rs10 
million in legal fees and other expenses.

The Supreme Court bench consisted of Justice Bashir Jehangiri, 
Justice Sheikh Riaz Ahmed, Justice Munir A. Sheikh, Justice Nazim 
Hussain Siddiqui, Justice Iftikhar Mohammad Chaudhry, Justice Qazi 
Mohammad Farooq, and Justice Abdul Hameed Dogar.

Mujahideen groups reject Indian offer for talks

SRINAGAR, April 6: Kashmiri Mujahideen rejected on Friday an Indian 
government invitation for a political dialogue, with one group even 
threatening violence against those entering into talks with New 

India sought to lend fresh impetus on Thursday to its four- month 
old ceasefire in occupied Kashmir by inviting freedom fighters for 
talks on restoring peace to the troubled region.

An official statement said that planning commission deputy chairman 
and former defence minister K.C. Pant would represent the 
government, but gave no details as to a venue or timeframe for the 

The dominant Kashmir outfit, Hizbul Mujahideen, was quick to 
dismiss the invitation.

"Such offers of bilateral talks have been made in the past, but 
proved to be just a bluff used by the Indians to hoodwink 
international opinion," Hizbul Mujahideen spokesman Salim Hashmi 
told AFP.

India not serious for talks, says FO
Hasan Akhtar

ISLAMABAD, April 6: The foreign ministry has said India is not 
serious about a peaceful solution to the Kashmir dispute and 
persists in its efforts aimed at imposing a military solution in 
Jammu and Kashmir.

Speaking at a press briefing here on Friday, foreign ministry 
spokesman Riaz M. Khan commented on a statement issued by the 
Indian government on April 5 about a "political dialogue with all 
sections of peace-loving people of Jammu and Kashmir".

A statement read out by the spokesman said that the Indian claim 
for a political dialogue "demonstrates once again that it is not 
serious about a peaceful solution to the dispute and is refusing to 
address the basic requirements of a dialogue process. The statement 
shows that India is persisting in its efforts aimed at imposing a 
military solution in Kashmir, avoiding meaningful talks and 
misleading world opinion".

Pakistan had outlined the requirements of the dialogue in its 
statement on Dec 2, 2000, asking India to stop repression in 
Kashmir, respond to Pakistan's (military) restraint, resume 
meaningful dialogue with Pakistan with the participation of the 
Kashmiri representatives, and for this purpose, help All Pakistan 
Hurriyat Conference leaders visit Islamabad for consultation, the 
statement added.

Despite the Indian claim about non-initiation of combat operations 
against the Kashmiri people, the Indian forces had continued their 
terror campaign, shooting at unarmed civilian protesters and even 
at Muharrum processions, the statement observed.

Pakistan had demanded that if India genuinely sought peace in 
Kashmir as it professed to do, it should abandon its policy of 
violence and state-terrorism against the Kashmiri people and 
massive violations of rights of the Kashmiri people, it said.

"It must respond sincerely to Pakistan's proposal of December 2 for 
a settlement of the Kashmir dispute consistent with the aspirations 
of the Kashmiri people and in accordance with the UN Security 
Council resolutions," the statement concluded.

Construction of fence to continue: India
Monitoring Desk

KARACHI, April 3: India asserted on Tuesday it would continue to 
erect "defensive structures" along the India-Pakistan boundary as 
it deemed necessary while rejecting Islamabad's description of it 
as a "working boundary."

"The construction of defensive structures along the International 
Boundary in Jammu and Kashmir and in other sectors is undertaken by 
our security forces from time to time. 

The nature and type of structures is obviously based on security 
requirements," the external affairs ministry spokesman said.

He was responding to questions about a statement issued by Pakistan 
last week. 

The spokesman said the term "working boundary" could not be 
applied to any part of the India-Pakistan boundary, including the 
boundary between Jammu and Kashmir and Pakistan.

Hangu still under curfew

HANGU, March 31: Hangu remained under curfew for the 31st day on 
Saturday as the district administration was busy demolishing the 
trenches on the hills surrounding the city.

As the Aashura mourning draws near, law-enforcement agencies and 
army personnel have intensified patrolling the streets and roads to 
avert any untoward situation.

Informed sources said that the Frontier Constabulary had been 
entrusted with the task of demolishing the trenches on the hills. 
The district administration officials said they could not afford 
taking any chance with the peace of the city. Any decision to lift 
or relax the curfew could be taken after the Aashura mourning was 
over, said the officials.

Meanwhile, emergency has been declared in all hospitals in Hangu 
and leaves of doctors and paramedical staff have been cancelled. 
The Ashura procession will be taken out under the vigilance of the 

President to get back dismissal powers: Amendments being drafted
Rafaqat Ali

ISLAMABAD, March 31: The government has decided to restore Article 
58(2)(b), giving powers to president to dissolve the National 
Assembly and dismiss the government on recommendation of the 
National Security Council.

Sources told Dawn that the chief executive, at the last cabinet 
meeting, had given broad outlines to his two legal experts, having 
extensive experience in drafting such laws, to prepare a draft for 
constitutional amendments.

The government was also considering giving option to president that 
instead of dissolving the entire National Assembly, only the 
sitting government should be dismissed while the same assembly 
should be given another chance to elect a new leader of the house, 
the sources said.

The president would use these powers in consultation with the 
National Security Council, consisting of seven members. Services 
chiefs would be its members by virtue of their offices, while the 
remaining four would be from civilian side "who can take a 
dispassionate view of the situation." The method of appointment for 
the civilians members would be spelled out in the Constitution, the 
sources added.

"The amendments are definitely coming but not in near future, maybe 
few months before October 12, 2002," the source told Dawn.

The power of appointment of services chiefs would again go back to 
the president, ostensibly to restore balance of power. The power to 
appoint services chief had been with the president since the 
restoration of democracy in 1985.  However, it was transferred to 
the prime minister through 13th Amendment by the last National 
Assembly, the sources said.

The military regime was also keen to repeal the 14th Amendment, 
allowing the members of parliament to speak out their mind without 
any fear of losing their seats.

The government, the sources said, wanted that power should not 
concentrate in the hands of an individual, who could use it on his 
whims. The government, according to the sources, would not go 
outside the limits prescribed by the Supreme Court. Bringing back 
Article 58(2)(b) would not offend the judiciary as in one of its 
judgements (Mehmood Khan Achakzai case), the SC had termed the said 
amendment a "safety valve".

The discretionary powers under 58(2)(b) were first used in 1988 by 
Gen Ziaul Haq, twice by President Ghulam Ishaq Khan and once by 
President Farooq Leghari. While granting powers to the chief 
executive to amend the constitution, the Supreme Court had held 
that no amendment should be made in derogation of federal structure 
of Pakistan, parliamentary form of government, independence of the 
judiciary and Islamic provisions of the Constitution, the sources 

Shaukat calls for IMF waivers
Nasir Malick

ISLAMABAD, March 31: Pakistan has requested the International 
Monetary Fund (IMF) to give four waivers on revenue generation and 
other such issues in order to complete the first review under the 
Stand-By Arrangement approved by the Fund's Executive Board.

In a letter to the IMF, Finance Minister Shaukat Aziz said that a 
waiver be given on the performance criterion on the revenue of the 
Central Board of Revenue (CBR) at end-December 2000, a waiver of 
the structural performance criterion related to petroleum price 
adjustment on December 15, 2000, and modifications of the 
performance criteria on the CBR revenue and the net domestic assets 
(NDA) of the State Bank of Pakistan (SBP) for end-March 2001.

"On the basis of the performance up to end-December 2000 and 
policies set out in the attached memorandum, the government 
requests that the completion of the first review be considered by 
the Executive Board of the Fund," the minister said in his letter.

The minister said that Pakistan would provide the IMF with "such 
information as it may request in connection with Pakistan's 
progress in implementing the economic and financial policies and 
achieving the objectives of the programme".

The government believes that the policies set out in the attached 
memorandum are adequate to achieve the objectives of the 
programme," he said. "However, it stands ready to take any 
additional measures appropriate for this purpose, and will consult 
the Fund in accordance with the policies of the Fund on such 

The memorandum of economic and financial policies attached with the 
letter reviews economic developments and policy implementation in 
the first half of fiscal year 2000/01 (July-December 2000), updates 
the macroeconomic framework, and discusses the stabilization 
policies and structural reform programme for the remaining period 
of the fiscal year. It updates and supplements the MEFP dated Nov 
4, 2000.

Informing the Fund about the macroeconomic performance in the first 
half of 2000-01, the minister said it was adversely affected by 
various factors. Lower-than-expected rainfalls have led to a small 
contraction in the production of cotton following the bumper crop 
of 1999/2000, and have weakened prospects foor the forthcoming 
wheat crop However, he said the government expected recovery in the 
industrial sector and expected a real GDP growth of 3.8 per cent 
for the year, compared to the target of 4.5 per cent.

Inflation as measured by the average CPI during July 2000 to 
January 2001 picked up to only 4.9 per cent instead of the 
projected 5.4 per cent.

He said during the first half of the current fiscal, the underlying 
external current account position was broadly in line with 
programme projections, with shortfalls in exports and larger profit 
transfers compensated by lower imports and higher worker 
remittances. Taking into account State Bank of Pakistan (SBP) 
purchases in the kerb market, the current account registered a 
significantly lower deficit than programmed.

Official reserves (excluding FE25 foreign currency deposits and 
short-term swaps and forwards) at end-December 2000 amounted to 
$735 million, somewhat higher than the programme target.

He said the consolidated government deficit (including grants) for 
the first half of 2000-01 amounted to 2.2 per cent of programmed 
annual GDP, 0.7 percentage points lower-than-programmed, with 
shortfalls in tax revenues more than compensated by higher-than-
projected federal non tax revenue and stronger-than-envisaged 
expenditure restraint. On the revenue side, shortfalls in tax 
revenues, in the order of 0.4 per cent of annual GDP, were the 
result of shortfalls in CBR revenues (mainly in sales and income 
tax collections) and, to a lesser extent, in receipts from energy 

Federal current spending was higher than anticipated due to higher 
subsidies on account of larger-than-programmed payments to Water 
and Power Development Authority (WAPDA) and wage spending 
(including military spending).

He said structural reforms gained momentum in a number of areas and 
structural performance benchmarks and criteria were met, except 
that related to the adjustment in petroleum prices.

"Domestic petroleum prices were adjusted on Dec 31, 2000, instead 
of Dec 15, 2000 to avoid socio-political stress during the Ramazan 
period. The price increases in the range of 7 per cent to 23 per 
cent exceeded the requirements implied by the agreed formula.

Restructuring of the nationalized commercial banks continued with 
the closure of large numbers of unprofitable branches. In the trade 
area, the anti-dumping law was enacted in Dec 2000 thereby paving 
the way for abolishing regulatory duties discriminating against 

WB offers $100m for drought victims

ISLAMABAD, March 31: The World Bank will provide $100 million 
emergency assistance to Pakistan to mitigate the effects of drought 
in the country.

Senior Vice-President and Chief Economist of the World Bank, 
Nicholas Stern, who called on Chief Executive Gen Pervez Musharraf 
here on Saturday, assured him that the World Bank would offer $100 
million to help remove the sufferings of the people that came in 
the wake of prolonged drought situation.

Informed sources said that the chief executive was told that the 
amount of emergency assistance for drought could be more than $100 
million as various details were still being worked out.

Mr Stern said that since the government was trying to implement its 
reform agenda, international donors were sympathetically 
considering all possible support for Pakistan.

However, sources said that the World Bank official called for 
protecting social sector's funding. The government last week 
slashed the current financial year's Public Sector Development 
Programme (PSDP) from Rs120 billion to Rs110 billion that came 
under sharp criticizm by the donors. 

During the meeting, sources said, Gen Musharraf briefed the 
visiting World Bank senior vice-president about his government's 
priorities. Reiterating that general elections would be held before 
October 2002, Gen Musharraf said that reducing debt burden and 
privatizing the state sector were priorities of his government on 
the economic front.

Sources said the chief executive told Mr Stern that debt burden 
would be reduced in the light of the recommendations of the Debt 
Reduction and Management Committee (DRMC) specially by avoiding 
unnecessary foreign loans.

Water shortage: Kharif target lowered
Faraz Hashmi

ISLAMABAD, March 31: Federal Committee on Agriculture which met 
here on Saturday lowered Kharif crops targets because of the water 
shortage. The crops are cotton, sugar cane and rice.

This was stated by Federal Minister for Food and Agriculture Khair 
Mohammad Junejo while briefing newsmen after the 74th meeting of 
the FCA.

The agriculture minister said the meeting took stock of water 
situation in the Kharif season. He quoted the Irsa Chairman Mian 
Hafeezullah as telling the meeting that Irsa was expecting a 
minimum of 49 per cent and a maximum of 61 per cent shortage in the 
early Kharif season from April 1 to June 10. However, he said, an 
overall shortage of 17 per cent was expected in the entire Kharif 

The government, he said, was trying to shift as much area as 
possible from rice - a water intensive crop - to cotton. The 
government had already banned rice cultivation in some areas of 
Sindh and was planning to convert half of the irrigated area of 
Balochistan from rice cultivation to cotton, because of the water 
shortage, he added.

Agriculture Development Bank of Pakistan had been asked to 
encourage cotton plantation by extending loans for the crop to the 

Mr Junejo, however, said that the recent spell of rains had a very 
significant impact on the water level in the rivers. The inflow at 
Tarbela on March 29 was 19,700 cusecs and it had increased to 
34,500 cusecs on March 31 after the rains, he said.

Whatever water was available in Tarbela would be supplied to Sindh 
from April 1 to April 15, to facilitate cotton planting in southern 
parts of Sindh.

The supply of agriculture inputs including seeds, fertilizers and 
pesticides were also reviewed at the meeting which noted with 
satisfaction that these were in ample supply. He said Pakistan 
would not import wheat this year as an estimated production of 17.5 
million tons along with the carry over stocks of three million tons 
will be enough to meet domestic requirements of the country. The 
meeting, he said, downwardly revised the wheat production target 
from 20 million tons to 17.5 million tons.

Punjab was expecting a total production of 14.23 million tons, 
Sindh 2 million tons and NWFP and Balochistan 0.73 million tons and 
0.5 million tons, respectively, Mr. Junejo said. "These are very 
conservative estimates and we hope with the favourable temperatures 
in the coming week we will have better wheat production," Mr Junejo 

The FCA also evaluated the extent of damages caused by 40 per cent 
shortage of irrigation water during the Rabi crop. An amount of 
Rs95 billion had been lost because of the low production of all the 
main crops.

The FCA set the target of cotton crop, sowing of which would begin 
from April 1 in southern Sindh. The target set for cotton was 8.66 
million bales against the last year's production of 10.6 million 
bales, he said.

Punjab had been given a target of producing seven million bales, 
half a million less than the last year's production. A target of 
1.56 million bales had been set for Sindh against the production of 
2.2 million bales in 1999-2000. Balochistan would contribute 0.1 
million bales, he said.

While reviewing sugar cane production the meeting noted that the 
area which came under sugar cane cultivation had been reduced 
considerably as compared to the last year.

Masood seeks diplomatic pressure against Pakistan

PARIS, April 4: Afghan opposition leader Ahmad Shah Masood made an 
impassioned plea on Wednesday for foreign aid in his war against 
the Taliban and called for diplomatic pressure against Taliban's 
backers in Pakistan.

"Faced with the aggression of Pakistan, I give myself the right ... 
to seek aid everywhere," Mr Masood told a packed press conference 
here after a closed-door meeting with French Foreign Minister 
Hubert Vedrine.

"What happened to the British (in the 19th century) and the Soviet 
Red Army will also happen to Pakistan," Mr Masood said.

Mr Masood is on his first visit to Europe and on a rare foray from 
his bases in the snow-capped mountains of northeastern Afghanistan. 
During the 1980s, his battle against Soviet occupation earned him 
the title of "Lion of the Panjshir".

He received a hero's welcome from Afghan opposition supporters 
cheering loudly as he entered the news conference.

"Any help that countries can give us for reconquering our country, 
we need it," added the now-struggling commander, who has suffered a 
wave of setbacks but remains the sole serious obstacle to the 
Taliban's full control of Afghanistan.

Accusing the Taliban of being directly propped up by Pakistan and 
Osama bin Laden, Mr Masood also warned the United States that 
"there will be no end to the current problems, which will only get 
worse" unless his fortunes were reversed.

"To end the war, the international community must place strong 
pressure on Pakistan. This is what I raised with Mr Vedrine and 
what I will raise in all my meetings here," said Mr Masood.

After Mr Vedrine's one-hour meeting with Mr Masood, the French 
foreign ministry issued a brief statement saying the current 
military and humanitarian situation in Afghanistan had been 
discussed, but no further details were given.

Sources close to Mr Masood said the meeting with Mr Vedrine was 
"very positive", but declined to comment openly on whether subjects 
such as military or financial aid were broached.

"The decision (on aid) rests with European deputies," a confident 
Mr Masood told the lively press conference in a plush Paris hotel.

But the visit has been seen as a sign that the gloves have come off 
in Europe's diplomatic struggle with the Taliban, who have drawn 
global condemnation for their denial of women's rights and more 
recently their destruction of Afghanistan's ancient Buddhist 
statues in Bamiyan.

The president of the European Parliament, Nicole Fontaine, who has 
invited Mr Masood to address the body on Thursday, also issued a 
call for European powers to provide more concrete support to the 
anti-Taliban movement.

"It is important that France shows its support to the fight of 
those who, in Afghanistan, are opposing the fanatical Taliban 
regime," Mr Fontaine said.

Mr Masood, a 49-year-old ethnic Tajik, is the vice-president and 
defence minister of the United Nations-recognized 'Islamic State of 
Afghanistan', but his forces wield control over just 10 per cent of 
Afghan soil.

Mr Masood also met president of the national assembly, Socialist 
Raymond Forni, but officials confirmed he would not be meeting with 
President Jacques Chirac.-Agencies

Finance ministry aggravating crisis, says Wapda

ISLAMABAD, April 4: Faced with a shortfall of around Rs20 billion, 
Wapda has complained that the finance ministry is aggravating its 
financial crisis, sources in Wapda told Dawn.

"It is frustrating to point out that the ministry of finance has 
not honoured its commitment from September, and instead of paying 
required funds in cash, it adjusted Rs1.34 billion against Wapda's 
debt service liability to the government of Pakistan," said a Wapda 
letter to the federal government.

Wapda said the ministry also did not pay over Rs5.4 billion payable 
from January to June to it against the GST the Authority had paid 
to the Central Board of Revenue. "Non-payment of this amount has 
further aggravated the cash flow of Wapda," the utility pointed 

Wapda said it was directed last year to impose GST on some 
categories of consumers by adjusting the GST against its consumer-
end tariff so as to insulate consumers from the additional impact 
of GST. Wapda was assured that the finance ministry would 
compensate the revenue loss through subvention in advance.

Wapda had met its obligations towards revival of economy by 
allowing liberal incentives through tariff to productive sectors, 
accepting suspension/write-off of dues from the public sector and 
augmentation of water resources through Vision 2025, said the 
Authority. However, it pointed out, the other side had not 
fulfilled its commitments which has resulted in aggravating the 
financial crisis.

"This would result in increasing the inter-corporate circular debt 
in the public sector, not to mention here that operational and 
development activities are likely to suffer in the coming months 
and slowing down the pace of development in mega development 
projects like the Ghazi Barotha Hydro Project," Wapda said.

Wapda has paid over Rs41 billion this year for debt servicing, 
including Rs23 billion as DSL to the federal government and Rs17 
billion as directly to the public sector. Another Rs81 billion was 
paid to independent power producers.

Wapda also complained that after the settlement of its receivables 
since January 1, 1999, a meagre portion was paid in cash while 
Rs20.2 billion was adjusted against debt service liability to the 
government not taking into account that Wapda had cleared its dues 
to oil and gas companies and others in cash without injection of 
any additional cash from its past dues. Consequently, it became 
impossible for Wapda to meet its financial obligations to oil and 
gas companies and the IPPs, and finance its development programmes.

Wapda's total revenues for 2000-01 have been projected at Rs185.5 
billion against an expected expenditure of Rs201.5 billion, leaving 
a shortfall of Rs16 billion.

"The estimated additional financial burden on account of settlement 
agreement with Hubco and Kapco is Rs5.8 billion which has to be 
paid during the current financial year. This settlement/MOU will 
have an impact on the capacity payment in future as well," wapda 

Musharraf wants early PTCL sale-off 

ISLAMABAD, April 2: Chief Executive General Pervez Musharraf on 
Monday emphasized the need for continuity of effective and reliable 
operations of the telecommunications network and its future 

Besides national security the continued development of Information 
Technology (IT) should be ensured, said an official statement here.

Gen Musharraf was presiding over a meeting held to review the 
privatization process of Pakistan Telecommunication Company Limited 

It also directed that the privatization process of PTCL should be 
pursued with vigour, determination and focus in the best national 

Besides restructuring and reform of the telecommunications and IT 
sectors, various options for privatization of PTCL and the 
development of the IT sector were discussed.

After extensive deliberations it was decided that the current 
privatization process of PTCL as proposed by the financial advisor, 
involving strategic sale of PTCL, should be carried to its logical 

The meeting also highlighted the need for the development of 
credible and adequate regulatory and safety mechanisms to ensure 
the achievement of national objectives in the telecommunications, 
IT sectors, and the protection of consumer interests.

While emphasizing the need for developing a strong enabling 
environment to generate greater investor confidence, the meeting 
reiterated the government's commitment and support for the 
privatization process.

Among those who attended the meeting were Finance Minister, Shaukat 
Aziz, Minister for Privatization, Altaf M. Saleem, Minister for 
Science and Technology, Dr Atta-ur-Rahman, Minister for Commerce, 
Industries & Production, Razzak Dawood and, senior civil and 
military officers. -APP

Pakistan, ADB to sign poverty reduction accord in November
By Jawaid Bokhari

KARACHI, April 2: The Asian Development Bank (ADB) will sign a 
partnership agreement with Pakistan on poverty reduction in October 
or November.

The ADB is currently engaged in completing the country's poverty 
profile and analysis. It is also holding a dialogue with 
stakeholders. The dialogue will be followed by a high-level forum 
on poverty reduction in Islamabad on April 23.

The forum, to be organized by the government, will bring together 
stakeholders from the government, civic society, the private sector 
and communities engaged in development work.

The discussions will focus on strategic choices for poverty 
reduction, assist the government in shaping its anti-poverty 
strategy and help foreign lending agencies identify their roles in 

Explaining the bank's strategy, ADB officials said the partnership 
agreement would be designed in such a manner that the bank would 
share not only the laurels for the success of the poverty reduction 
plan but also the responsibility for any failures.

Expressing concern over rising poverty level in Pakistan, M. Ali 
Shah, ADB resident representative, observed "clearly, an 
unacceptable proposition for development practitioners". He said 
that though the estimates varied and depended on the measurement 
methodology used for determining poverty levels, there was an 
agreement that 33 to 40 per cent of the population suffered from 
dire poverty.

Speaking at a tripartite dialogue attended by representatives of 
the government, members of civic society and ADB officials here on 
Monday, Naved Hamid, ADB senior economic adviser, spelled out the 
bank's strategy to reduce poverty. He said the ADB saw three 
elements in any framework for poverty reduction: sustainable 
economic growth, social development and sound macro- economic 
management and good governance.

The Sindh minister for finance, Dr Abdul Hafeez Sheikh, who 
presided over the opening session of provincial consultations of 
the poverty reduction programme, said a survey had disclosed that 
82 per cent of the population in the five districts of Sindh earned 
less than one dollar a day.

CE orders big raise for govt employees: Proposal due next month
Ihtashamul Haque

ISLAMABAD, April 3: The chief executive, Gen Pervez Musharraf, on 
Tuesday directed the Pay and Pension Committee (PPC) to propose 
"considerable increase" in the salaries of the government 

The directive came during a briefing given to the CE by the finance 
division officials about preliminary recommendations of the PPC 
headed by Secretary-General Moeen Afzal.

Gen Musharraf observed that the salaried class had been hit hard by 
the price hike. He said he had been told that inflation was in 
single digit but still, he added, the salaried and middle classes 
were facing difficulties to manage their affairs.

Reports suggest that the PPC is in favour of a 50 per cent raise. 
According to some other reports, a 20 to 25 increase can be 

However, Finance Minister Shaukat Aziz told reporters the other day 
that no final decision had been taken yet and that everybody should 
wait for the final report of the PPC.

The PPC has been deliberating since December and is expected to 
complete the job by May. The PPC was given broad guidelines by the 
chief executive on some critical aspects of its work. As a 
consequence, the PPC would continue to work for finalizing its 
recommendations in the light of those guidelines and focus on the 
twin objectives of enabling the government to recruit the right 
quality of personnel at affordable salaries.

"It is expected that the committee will proceed to finalize its 
recommendations so that these can be considered by the cabinet at 
the budget time," says a handout. It clarified that no firm 
recommendation had been worked out yet and that any speculation in 
this respect was misleading.

Sources said that the implementation of the recommendations of the 
PPC largely depended on the performance of the CBR during the 
remaining four months of the current fiscal. In case, the CBR 
succeeded in collecting Rs60 to Rs70 billion as has been planned, 
the government would be able to offer a considerable raise to its 
employees. Generally, sources said, there was despondency in the 
government employees as they have not received any increase in 
their salaries since 1994, while inflation continued to rise during 
this period.

Sources said that since the government had already cut the size of 
its Public Sector Development Programme from Rs120 billion to Rs110 
billion, there was hardly any room to manage more resources, 
particularly to give any raise.

The World Bank and IMF are generally advising the government to tap 
new resources before offering any raise to its employees.

10% hike in power tariff every year: Plan approved by Musharraf
Khaleeq Kiani

ISLAMABAD, April 2: The government has decided to introduce an 
inflation-based automatic tariff system to ensure additional 
finances to power operators for development of the sector.

Under the new system, at least 10 per cent increase in electricity 
tariff will take place every year notwithstanding the existing 
fuel-based quarterly automatic tariff adjustments and structural 

A decision to this effect has been conveyed to the National 
Electric Power Regulatory Authority in a set of guidelines approved 
by the chief executive in accordance with a matrix agreed with the 
World Bank.

The guidelines were finalized by the representatives of the water 
and power ministry, cabinet division, and planning and development 
division on Friday as the WB wanted them to have been issued by 
Saturday, Nepra sources told Dawn.

The new system would reduce the role of the regulator as most of 
the tariff changes would take place automatically. It would, 
apparently, undermine the integrity and independence of Nepra which 
was set up as an independent body, sources said.

"Nepra will review within the next six months the scope for 
introducing automatic and predictable mechanisms for setting 
electricity tariffs, minimizing extensive interactions with the 
regulator or other agencies to a bare minimum, and introducing 
multi-year tariffs. Specifically, Nepra's rules for tariff setting 
will be revised over the next six months to allow for formula-based 
tariff setting, automatic mechanisms for the pass through of 
legitimate costs which are beyond the control of the operating 
entities, and introducing multi-year tariff mechanisms," said these 

However, while Nepra has been asked to introduce new tariff setting 
system within six months, the government wants the theft of 
electricity "to be reduced over a reasonable time-frame".

Already, many consumers have complained about high-speed meters on 
their premises but there is no independent and above board 
laboratory that can verify the speed. Meters are always checked by 
the laboratories of Wapda and KESC against whom the consumers 

Sources said that existing electricity tariff for life-line 
consumers would be maintained for the time being and "Nepra will 
determine the rate of increase in line with overall inflation." The 
implicit subsidy to residential consumers resulting from this 
policy decision would be borne by other slabs of residential 

However, "cost of service" would be the overall principle for 
determining the tariff. The government has noted that below-the-
cost-of-supply tariff currently being given to the agriculture 
sector has led to inefficiencies in the water used at the farm 
level. Nepra would develop a programme over the next five years for 
aligning the tariff duly reflecting the cost of supply. In case, 
the federal, provincial or local government wished to provide 
further incentives to its agriculture sector, those subsidies would 
be provided directly by the concerned government.

Moreover, a Universal Service Obligation Fund is intended to be 
created to provide support through social subsidies for financially 
unsustainable areas, including the village electrification.

The government and the World Bank believe that these measures will 
bring in much-needed managerial expertise and technology, and 
mobilize additional finances for the development of the sector. 
Unless this is done, private investors would be reluctant to invest 
in the power sector in the absence of a stable regulatory 
environment and policy framework.

The measure would ensure predictability and transparency of the 
process for setting electricity tariffs, and the degrees of 
interaction with the regulatory authority or other institutions 
required for complying with regulatory requirements as well as the 
extent of discretion which is allowed to regulators in matters such 
as tariff setting, the guidelines stated.

Export finance rate up by 1.5%: Subsidy to go on IMF demand
Mohiuddin Aazim

KARACHI, March 31: The State Bank has enhanced export finance rate 
from 9 to 10.5 per cent to meet a key condition of the $596 million 
IMF standby credit. This is the second upward revision in export 
finance rate within two and a half months: on January 16 SBP had 
raised the rate from 8 to 9 per cent as the first step toward 
eliminating subsidy on export finance as asked by the IMF.

SBP said in a circular on Saturday that exporters of locally 
manufactured machinery would also get export finance at 10.5 per 
cent instead of 9 per cent. The circular said export finance rate 
for exporters of bleached or unbleached cloth had been enhanced 
from 11 to 12.5 per cent. It said new export finance rates would be 
effective from April 1.

The decision of hiking export finance rates by one and a half per 
cent invited spontaneous criticism from exporters who said it would 
hurt exports growth.

"The IMF conditionalities are hitting the private sector. The 
increase in export finance rate would seriously hurt exporters," 
said chairman of All Pakistan Textile Mills Association Abid 
Farooq. "When export finance rate was first enhanced (in January) 
we were given to understand that overall lending rates would come 
down but that has not happened," said Farooq when reached by Dawn 
over telephone for his comments. "Now we can hardly see total 
exports of nine billion dollars this year," he said.

Pakistan set an ambitious $10 billion export target for fiscal 
(July-June) 2000-01 but its exports valued only around six billion 
dollars in the first eight months. That forced the economic 
managers to say they now expect total exports to reach $9.2-$9.4 
billion mark. Businessmen say an economic slowdown in two major 
trading partners of Pakistan i.e. the US and Japan; a water crisis 
in the country and rising interest rates may keep exports even 
below this mark.

"Now our exports may not even touch nine billion dollar mark," says 
a former chairman of SITE Association of Industry Majyd Aziz. "The 
increase in export finance is like another nail in the coffin. It 
would hurt the private sector in a big way," said Aziz when reached 
by Dawn over telephone. He said the decision would take away 
whatever small advantage Pakistani exporters had over their 
competitors in world market. "Exporters are already cash- strapped-
thanks to blocking of their sales tax and duty drawback refunds. 
The increase in export finance rate would only aggravate their 
problems," he remarked.

Meanwhile, the SBP circular issued to notify increase in export 
finance rates announced half a per cent cut in the margin for the 
banks on export finance business. The circular said whereas banks 
would charge 10.5 per cent markup on export finance they would 
obtain refinance from SBP at 9 per cent. That is their own margin 
would be 1.5 per cent down from 2 per cent previously when they 
were giving export finance to borrowers at 9 per cent and getting 
refinance from SBP at 7 per cent.

The circular said half a per cent cut in the margin would also 
apply in case of export finance to exporters of bleached or 
unbleached cloth. Now banks would get refinance from SBP at 11 per 
cent in case of export financing to exporters of bleached or 
unbleached cloth at 12.5 per cent.

Earlier the rate of export finance for exporters of bleached or 
unbleached cloth was 11 per cent and the rate of refinance was 9 
per cent.

Under the terms of $596 million IMF standby credit the State Bank 
is to eliminate subsidy on export finance rate and make it market 
oriented by the end of this fiscal year in June. SBP has so far 
raised export finance rate by a cumulative two and a half per cent 
since mid-January. The formula given by the Fund for determining 
market-based rate for export finance rate envisages a rate 
calculated after adding 1.5 per cent above weighted average yield 
on six month treasury bills in the last quarter.

Exact weighted average yield on six month T-bills in January -March 
quarter is not known. But if it works out to be more than nine per 
cent it would mean the Fund has relaxed the formula for market-
driven export finance rates.

15% GST imposed on pesticides, urea
Ihtashamul Haque

ISLAMABAD, March 31: The government on Saturday announced 
imposition of 15 per cent General Sales Tax (GST) on pesticides and 
urea in order to implement one of the remaining conditions of the 

"Initially, this GST has been levied on pesticides and urea, which 
will be effective from tomorrow (April 1)," said Finance Minister 
Shaukat Aziz.

Speaking at a news conference here on Saturday, he said the 
agricultural inputs like pesticides and urea could not be left out 
of the GST net.

The finance minister, however, admitted that since pesticides were 
imported, their price would increase due to this new decision. "But 
there would be no increase in the price of urea," he assured. He 
said the government has got an undertaking from the owners of the 
urea factories that they would not increase the price of their 

The finance minister said Pakistan's foreign exchange reserves have 
increased to $1.4 billion after the disbursement of the second 
tranche of $133 million by the IMF on Friday, out of $596 million 
Standby Arrangement (SBA). The $1.4 billion amount also included 
$900 million cash and $540 million of the foreign currency 
depositors, he added. He said Pakistan had repaid $250 million 
during the last ten days.

The finance minister claimed that Pakistan has now fulfilled the 
performance criteria to secure the third tranche. "Except revenues 
whose details of March are still to come, we have fulfilled 
performance as well financial criteria for the third quarter of 
2000-2001," he said.

Shaukat Aziz said the government was now planning to discuss 
Poverty Reduction Growth Facility (PRGF) for which he would leave 
for Washington on April 27 to hold talks with the IMF and the WB 

Banks allowed to use FCY deposits freely
Mohiuddin Aazim

KARACHI, March 31: The State Bank has permitted banks and non- bank 
financial institutions to use fresh foreign currency deposits 
freely for lending or investment in or outside Pakistan from April 

But the central bank has made it mandatory for banks and NBFIs to 
maintain 25 per cent of their total fresh foreign currency deposits 
with SBP as cash reserves in dollars. The SBP told banks and NBFIs 
on Saturday that they would earn no return on five per cent cash 
reserves but on the remaining 20 per cent special cash reserves 
they would get a return as determined by SBP on monthly basis.

The central bank said its exchange and debt management department 
would notify the rates of return at the end of every month which 
would be effective for next month. The SBP circular issued to 
notify freeing up of fresh foreign currency deposits did not say 
how much return banks would get on 20 per cent special cash 
reserves in April. But a separate letter issued to banks and NBFIs 
said that they would get 3.50 and 3.75 per cent return on one month 
and three month placement of fresh foreign currency deposits with 
SBP in April. It said one week deposits would earn 3.25 per cent.

The State Bank allowed banks to open fresh foreign currency 
accounts in June 1998 after freezing $11 billion worth of then 
existing foreign currency accounts on May 28 in the wake of nuclear 
explosions. But a year later in June 1999 it stopped all banks and 
NBFIs to use fresh foreign currency deposits abroad and permitted 
them to use them in the local market or place them with SBP. It 
also asked banks to cap their holding of fresh foreign currency 
deposits abroad at the level of June 3 1999. Since then banks and 
NBFIs started placing bulk of their fresh foreign currency deposits 
with the central bank as they had no avenue open for employing them 
in the local market. Some banks, however, got special permission 
from SBP to keep these deposits abroad.

Upto March 31 banks had about $545 million of fresh foreign 
currency deposits placed with SBP: the amount held abroad is not 
known but bankers say total fresh foreign currency deposits are not 
less than $1.2 billion. 

They say keeping a 25 per cent cash and special cash reserves on 
the total deposits means that $300 million out of total $545 
million worth of fresh foreign currency deposits would still remain 
with SBP. 

 That indeed would be a great source of satisfaction for the 
central bank that has only $888 million worth of net foreign 
exchange reserves -barely enough to foot Pakistan's import bill of 
three weeks.

The State Bank has been so short of foreign exchange that it had to 
purchase more than $1.3 billion from the open currency market in 
the first nine months of this fiscal year i.e. between July 2000 
and March 2001. In fiscal (July-June) 1999-00 it had purchased $1.6 
billion from kerb.

The State Bank circular on cash reserve requirement on fresh 
foreign currency deposits says if banks or NBFIs fail to keep five 
per cent cash reserves and 20 per cent special cash reserves on the 
total deposits, the central bank would fine them according to 
banking rules.

The circular also advises banks and NBFIs to start reporting the 
reserves position in their respective weekly statements from the 
first week of April.

ST revenue grows by 28.56% in July-March
Parvaiz Ishfaq Rana

KARACHI, April 4: A sustained growth at 28.56 per cent in sales tax 
collection had been recorded during first three quarters (July-
March) of present fiscal. A higher collection has been due to a 
rise in number of taxpayers as well as stringent audit, official 
sources said.

The sales tax collectorates (East and West), Karachi, had collected 
Rs20.148 billion during in nine months as against Rs15.671 billion, 
made in the corresponding period of last fiscal.

The factors contributed towards higher ST collection were 
attributed by officials, to remarkable rise in number of taxpayers 
and exceptionally good results achieved out of audit of large 
number of business and industrial establishments.

"We had been inter-acting with trade bodies at a very high 
frequency which assisted us in enhancing the number of registered 
persons/companies," a high official of ST collectorate said.

During the period under review such sector like clubs, gymkhanas, 
marriage halls as well as media and advertising companies came 
under tax net and a substantial defaulted or non-payments of tax 
amounts were detected from them, he added.

The sales tax collection of both the collectorates during the month 
of August 2000, was the highest at Rs2.341 billion or 115 per cent 
more than the corresponding period last fiscal. But it was 
surprising that ST collection during the out-going month of March 
2001, recorded a fall at Rs1.944 billion as against Rs2.006 billion 
collected in the same period last fiscal.

According to other details the Sales Tax Collectorate (East), had 
made 34.31 per cent higher collection during the first three 
quarters of current fiscal over the corresponding period of last 

PC asked to resolve its policy level issues soon
Ihtashamul Haque

ISLAMABAD, April 4: The Privatization Commission has been asked by 
the higher authorities to urgently resolve its policy level issues 
due to which the disinvestment process still looked stalled.

The PC was told that there were significant problems and policy 
issues which needed to be resolved speedily if the opportunities 
that privatization offered for relieving the balance of payment 
constrains, improving economic efficiency and stimulating both 
domestic and foreign private investment were to be reasonable 

The commission has particularly been asked to dismantle Gas Price 
Agreement of Pakistan Petroleum Limited (PPL) and raising its well-
head prices to the levels facing private gas producers.

Informed sources said that the officials of the chief executive 
secretariat and the ministry of finance have agreed with the Debt 
Reduction and Management Committee (DRMC) that there was a need to 
give firm commitment to full gas price deregulation over the next 
three years. Any subsidies to consumers should come from the 
budget. To minimize the budgetary impact, this requires raising the 
average gas price by about 50 per cent in real term over 3 years.

The committee believed that the producer and consumer price 
adjustments were necessary not only for speedy privatization but 
also for accelerated gas development and more rational use of 
energy, factors which can make a powerful contribution to the 
balance of payment improvement.

Also it was agreed that there was a need for a clear and 
unequivocal commitments to privatization of Pakistan 
Telecommunication Company limited (PTCL) and Oil and Gas 
Development Corporation Limited (OGDCL) and overcoming the 
resistance of management and labour with a firm hand.

The PC was urged to strengthen the regulatory framework for 
telecommunication, power, and gas, establish the regulatory agency 
for petroleum, and staffing regulatory agencies with competent 
people who were supportive of private participation in their 

It was agreed with the debt committee to resolve some tax issues 
affecting the banking industry that were hampering the sale of 
Habib Bank Limited (HBL) and the United Bank Limited (UBL), 
increasing the flexibility of banks to shut down branches and 
permitting majority foreign ownership of banks.

The medium term programme drawn up by the Privatization Commission 
for next three years have been appreciated which focussed on the 
sale of major assets in telecommunications, oil and gas, power and 
banking sector including giants of PTCL, PPL, OGDC, Pakistan State 
Oil( PSO), Karachi Electricity Supply Company (KESC), HBL and UBL.

The debt committee believed that the accelerated privatization was 
absolutely essential for tiding over the current payment crisis, 
though the overall contribution of privatization revenues to debt 
retirement will be modest. It will have important signalling value 
for the role of the private sector and will generate confidence. 
Similarly, it will help reduce the losses of public sector 
corporations, which have contributed to public debt build up in the 

Pakistan to lose Rs2 billion on petrol export
Rafaqat Ali

ISLAMABAD, April 4: Pakistan would lose around two billion rupees 
in one year on the export of 300,000 metric ton of petrol at the 
rate of Rs10.97 per litre, sources said.

Pakistan-Arab Refinery (Parco) which accepted bids for the export 
of 300,000 tons of surplus petrol at the rate of $240 per metric 
ton, is running on an annual subsidy of over Rs4 billion and the 
figure goes beyond Rs7 billion if hidden subsidies are included in 

Experts believe that exporting the motor spirit at a lower rate is 
double loss to the country which is producing it by offering huge 
subsidy and then exporting it at the price lower than its 
production cost.

They say that instead of exporting the motor spirit at the lower 
price, the government can market the product by slashing its taxes, 
which will be incentive for motorists to use the motor spirit 
instead of the Compressed Natural Gas (CNG).

The government is encouraging the use of natural gas as vehicle 
fuel and at present over 100,000 cars and pick-ups have been 
converted to the CNG.

According to official figures, ex-refinery price of Parco motor 
spirit is Rs14.46 per litre. For exporting, it will have to pay 
around Rs2 per litre on the transportation of the product from the 
mid-country refinery in Mehmood Kot to Karachi.

In the local market, the government is selling one litre of motor 
spirit for Rs30 as against Rs10.97 per litre on which it is being 

After the commissioning of Parco, Pakistan was looking for a buyer 
for motor spirit and held negotiations with Iran which is already 
surplus in the production of motor spirit. Iranian motor spirit is 
available in most parts of Balochistan for Rs13 per litre.

Oil industry wants rise in CNG prices
Khaleeq Kiani

ISLAMABAD, April 4: Oil industry has asked the government to 
increase the prices of compressed natural gas (CNG) with a view to 
arresting a growing fall in the consumption of petrol, official 
sources told Dawn.

The CNG industry and the directorate of gas have opposed the move 
by the Oil Companies' Advisory Committee (OCAC) on the grounds that 
gas tariff for the industrial sector, including the CNG, was 
uniform and could not be changed to the disadvantage of an 
individual sector.

On the other hand, they have proposed that the oil industry should 
compete the CNG sector by reducing its profit margin.

The government had increased gas prices by an average 15 per cent 
for all consumer groups, including the CNG, last month and it was 
in no mood to put an additional burden on the CNG consumers in the 
near future, sources in the petroleum ministry said.

OCAC, the umbrella organization of major oil marketing and refining 
companies, informed the petroleum ministry that cheap CNG rates had 
resulted in a large-scale conversion of vehicles from petrol to 
gas. OCAC said this had not only reduced gasoline consumption and 
the rate of return to oil refining and marketing companies but had 
also created problems due to surplus gasoline.

There is only 15 per cent GST on natural gas, including the CNG, 
while the government collects around 52pc taxation on petrol. In 
other words, the taxation share in Rs30 per litre petrol is Rs17.

The government policy to promote the CNG as a pollution-free and 
cheaper fuel has resulted in conversion of around 150,000 vehicles 
to the CNG.

Sources said that a German oil firm was ready to purchase surplus 
petrol from PARCO and was expected to lift a couple of lots of 
10,000 tons of petrol from the Karachi port by the mid May.

Rs268bn taxes collected 

ISLAMABAD, April 4: The government has collected about Rs268 
billion in taxes in the first nine months of the current fiscal 
year, according to preliminary unofficial estimates compiled by the 

These estimates place the collection of sales tax during the period 
at Rs107 billion, income tax at Rs83 billion, customs duties at 
Rs43 billion and excise duties at Rs35 billion.

The full year collection target for ST and IT is Rs280 billion and 
by March, the two heads were to collectively contribute Rs210 
billion but the actual collection of sales and income taxes had 
remained around Rs190 billion in the first nine months.

Both the sales tax and income tax departments are said to have 
failed in meeting their targets in the July-March period of the 
current financial year because of the deepening slump in the 

The total estimated tax collection of Rs268 billion is about Rs150 
billion short of the projected collection of Rs417 billion for the 

In order to achieve the whole year target by end-June, the CBR 
would need to collect taxes in the next three months at the rate of 
Rs50 billion a month on an average against Rs30 billion it had been 
collecting on an average every month in the last nine months.

'Policy board' suggested for taxation strategy
Ihtasham ul Haque

ISLAMABAD, April 2: The task force on tax administration has 
suggested the government to set up a "policy board" to be headed by 
the finance minister for formulating tax policy and providing the 
strategic direction for its implementation.

The task force has finalized its recommendations, which would be 
submitted to the chief executive within next 10 days time in order 
to substantially increase revenues and plug leakages. The policy 
board would comprise members from private and public sectors.

According to the details collected by Dawn on Monday, the task 
force also proposed converting the Central Board of Revenue (CBR) 
into an autonomous Pakistan Revenue Authority (PRA) to be created 
under an appropriate legislative framework.

The authority would function under the administrative control of 
the finance ministry. It would comprise a chairman as its chief 
executive with one or more vice chairmen and several members to 
handle specialized revenue functions.

The authority would be responsible for implementing policies given 
by the policy board. It would exercise complete financial and 
administrative autonomy in all matters concerning implementation of 
the taxation measures taken by the government. It would have the 
freedom of recruitment of personnel, separation of efficient and 
honest from inefficient and corrupt, develop and maintain its 
physical infrastructure, hire consultants for functions which the 
authority could not perform within itself, and the flexibility in 
determining compensation to such consultants.

The authority would be responsible to the government for collecting 
the revenues as agreed at the beginning of each year.

The authority would only be engaged in tax policy implementation 
and not involve itself into public dialogue as regards their 
viability or otherwise.

The government would constitute the policy board and appoint its 
members for a tenure of two years. The board may comprise primarily 
secretaries of finance, industries, commerce, information 
technology, Board of Investment (BoI) and chairman PRA.

Presidents of Federation of Pakistan Chambers of Commerce and 
Industry (FPCCI), Overseas Chamber of Commerce and Industry, ICAP 
and Pakistan Tax Bar may also be considered for members of the 
policy board. The chairman PRA would act as its secretary.

The board would be assisted by PRA's chairman and members in its 
work. Based on the broad economic considerations, tax policy 
inputs/analyses from the authority and private sector 
interventions, the policy board would formulate taxation policies 
subject to government approvals.

It is suggested that the PRA chairman many be appointed for a term 
of three to five years to ensure continuity and security of tenure. 
The chairman would have full financial and administrative autonomy 
as was necessary for performing his functions as the chief 
executive of the authority. Each year, he would submit 
comprehensive performance report both to the policy board and the 
government. Members of the Authority would generally be selected 
from among the officers of Pakistan Revenue Service(PRA). For 
specialized functions such as human resource development, 
information management system, audit, legal, public relations and 
tax payers assistance, appropriate persons from the private sector 
may be recruited as members.

"It is proposed that the present institutions of director general 
customs intelligence, director generals of inspection and audit and 
director general enquiries may be abolished," the task force 
recommended. The post of DG customs intelligence is redundant 
because most of the anti-smuggling activities were carried out by 
the para-military forces. The work of DG inspections would be 
looked after by the member audit and inspection. Similarly, member 
administration and finance would beresponsible for enquiries 
against the corrupt and inefficient tax officials.

WB to help develop private gas pipelines: Team due on 9th
Khaleeq Kiani

ISLAMABAD, April 3: The World Bank will assist Pakistan in 
developing private sector gas pipelines through multinational 
energy firms and international financiers to link its power and 
industrial sector with the untapped gas reserves.

The World Bank (IBRD) sources told Dawn on Tuesday that a four-
member energy mission of the bank would visit Pakistan for 10 days 
(from April 9 to 20) to hold discussions with the local gas 
companies, international oil companies, power utilities and 
financial institutions.

The mission, comprising Marc Heitner, Waqar Haider, Rashid Aziz and 
Ralph G. Schwimmbeck, will look into measures to improve the 
pipelines in private sector and to develop the necessary policy 
framework including issues relating to Gas Regulatory Authority 

In a letter to secretary petroleum, Tjaarda P. Storm van Leeuwen, 
the head of IBRD's energy sector unit for South Asia appreciated 
Pakistan's measures during the last 18 months in the oil and gas 
sector. He hoped that "the remaining agenda will be implemented 
over the next three years or so as announced at the Pakistan 
Development Forum" meeting last month in Islamabad.

The bank noted that infrastructure bottlenecks, particularly gas 
pipelines prevent Pakistan from taking full advantage of its recent 
gas discoveries and to substitute for fuel oil, which is imported 
at a relatively high cost for use in thermal power plants.

"While it will take some more time to restructure and privatize Sui 
Northern Gas Pipelines (SNGPL) and Sui Southern Gas Company (SSGC), 
one way of accelerating development is to introduce the concept of 
private gas pipelines into Pakistan, preferably in such a way that 
the government is not bearing the commercial risks", the letter 

The ministry of petroleum and natural resources had already evinced 
great interest in possible private sector investments in gas 
pipelines and related infrastructure and requested the bank for 
assistance in developing the necessary policy framework. Sources 
said the mission would suggest measures to optimally introduce 
private pipelines and policy changes.

Besides ministers and officials, the mission will hold talks with 
heads of all local and international oil and gas companies 
operating in Pakistan, chairman of Wapda Lt-Gen Zulfiqar Ali Khan 
and chiefs of IPPs. Heads of Citibank Pakistan, J.P Morgan, ABN-
Amro will also be involved in these deliberations.

Pakistan has discovered around six to eight trillion cubic feet 
(TCF) of natural gas reserves in the recent three years. A couple 
of new gas fields have already been developed but could not be 
linked to the gas transmission system due to lack of infrastructure 

The government has recently approved around Rs20 billion 
development programme, to be implemented by the SNGPL and the SSGC, 
but most of the power plants are still running on the high cost 
furnace oil as independent gas pipelines from gas fields to thermal 
power stations could not be developed.

Pakistan's fuel-based annual import bill currently stands in the 
region of $2.5 to $3 billion, of which around $800 million worth of 
furnace oil is consumed by thermal power stations.

Foreign banks show mixed performance
Jawaid Bokhari

KARACHI, April 3: The performance of foreign banks indicated a 
mixed trend during 2000, in a period marked by cautious lending, 
focus on retail banking and local currency deposit mobilization.

Of the 15 foreign banks including one incorporated in Pakistan 
with major Arab stakes, whose balancesheets have been made public, 
four posted losses and 11 recorded after-tax profits. In 1999, the 
comparable number of loss-making foreign banks was five.

The non-performing loans (NPL) of these 15 banks amounted to Rs5.4 
billion at the closing of 2000. The major amounts of NPL were 
shared by Faysal (Rs1,472 million), Citibank (Rs1,006 million) 
Standard Chartered Grindlays (Rs810 million) and Standard Chartered 
(Rs485 million).

Three banks, ABN-AMRO, Habib Bank AG Zurich and IFIC, improved 
their after-tax profits and an equal number succeeded in converting 
losses of 1999 into profits in the year under review. These are 
Citibank, Faysal Bank and American Express. Faysal is incorporated 
in Pakistan with major foreign stakes.

The profits of five leading European and Arab banks plummeted in 
2000 when compared to 1999. These were: Standard Chartered, 
Standard Chartered Grindlays, Credit Agricole Indo-Suez, Mashreq 
and Emirates.

Deutsche and Hongkong Shanghai went into red. In 1999, they made 
profits. Bank of Oman reported losses for the second year whereas 
Societe Generale was able to reduce its losses.

With the closing down of the operations of the Bank of America and 
Trust Bank, foreign bank branches were reduced by seven. Since 
foreign banks cater to first-tier borrowers, multinationals and 
reputable domestic corporates, their branch network is not of much 
importance for lending purposes. A large branch network, however, 
helps attract deposits which increases liquidity for funding 
corporate sector. Nationalized commercial banks have been able to 
attract multinationals, because of much bigger resources mobilized 
through large branch network.

Gas price controversy and the fertilizer plants
Jawaid Bokhari

KARACHI, April 6: Producers want subsidy on gas for the existing 
fertilizer industry to go. They are opposed to such policy which 
unduly tilts towards one sector at the cost of another. And if 
government wants to give subsidy to new fertilizer plants, it 
should do so at its own cost.

The management of Mari Gas Company Limited (MGCL) has also taken an 
exception to the official move of dedicating Mari gas field to the 
fertilizer industry which, it said, will be detrimental to the 
growth of the company's business and will restrict its contribution 
to the national economy.

Lt Gen Khalid Nawaz Malik (rtd), MGCL Managing Director told the 
government that the Fertilizer Policy 1989, had resulted in 
creation of a monopolistic cartel of fertilizer producers, to whom 
gas was being sold at unrealistically depressed prices.

MGCL provides gas to 5 plants of Fauji Fertilizer, Pak-Saudi 
Fertilizer and Engro Chemicals at abnormally low rates. An amount 
of Rs39 billion have been given to these companies as subsidy 
during 1993-2000. On the other hand, MCGL is faced with paucity of 
funds and has suffered stagnation.

The general has pointed out that rates fixed for existing plants, 
set up under the Fertilizer Policy 1989, should continue to apply 
for the stipulated period from the date of the first delivery of 
gas to these plants. Thereafter, these should be treated at par 
with pre-1989 policy plants.

If the government wants to provide concessions/incentives for the 
new plants under 2001 Fertilizer Policy, it should be in the shape 
of concessions in duties and taxes instead of subsidized rates. Gas 
has alternate uses which can benefit the economy in much better way 
compared to its use by the fertilizer industry.

The draft of new policy provides that the gas supply agreement will 
be for a period of ten years, extendible, by another ten years. 
Such strict terms should not be imposed on companies and they be 
allowed to maintain commercial independence. The MGLC has proposed 
gas supply agreement should be for an initial period of ten years, 
and extendible for ten more years, subject to mutual agreement 
between the parties as to quantity and price of gas.

Back to the top
Are we stupid?     
Ardeshir Cowasjee

HOW many of us would answer 'yes' without a second thought? How 
many would be angered by the question? How many would vehemently 
shoot it down with a negative?

What we all do know is the fact that there are many press people on 
the payroll of our governments (any and all governments) who will 
report as directed on any manifestly incorrect government stance. 
Some of the payroll lot have been given awards -- medals and cash. 
Some have crawled out from the shadow of their mentors and been 
roughed up or incarcerated. Our governments are and will remain 
weak, under suspicion, and the game will continue until Kingdom 

As reported on March 28, the chief reporter of 'The News', Shakil 
Shaikh, was picked up at gun point in broad daylight in the 
vicinity of Islamabad's main commercial centre.

Armed men in a high-powered jeep, with no number plates, followed 
his car, forcibly stopped him on the Kashmir Highway near the 
Margalla Hotel, dragged him out of the car, covered his head, tied 
his hands, threw him into their jeep and beat him up. These 
unidentified men then drove him to a deserted area near the Soan 
Garden Housing Scheme and, reportedly, continued thrashing him for 
three hours. The kidnappers repeatedly told him 'You write too 
much. Now you will not write any more.' They threatened to kidnap 
his wife, children and parents were he not to change his 'attitude' 
(the 'attitude' was not specified).

'We are kamis (servants) and ranghars (members of a Punjabi 
tribe)', was how the attackers described themselves. They took his 
two mobile cell phones, his tape recorder and his wallet. They left 
him in the woods to lick his wounds. He later found his own car 
parked nearby, drove himself home, and was then taken to PIMS for 

The editor of 'The News' and Shakil's fellow press people have 
naturally strongly condemned the attack, demanded an enquiry, and 
the arrest of the culprits. They have described the incident as a 
'blatant attack on the freedom of the press' and have lodged a 
report at the Secretariat police station.

Interior Secretary Tasneem Noorani has 'condemned' the incident and 
made the usual official noises about taking all possible measures 
to trace the assailants. The Chief of Staff to the COAS, Lt General 
Ghulam Ahmed Khan has enquired after Shakil9s health, as has 
Federal Information Secretary Syed Anwar Mahmood. The Principal 
Information Officer, Ashiq Gondal, visited him in hospital.

The whole tone of the incident suggests that it could possibly be 
the doing of one of the many 'agencies' with orders not necessarily 
having emanated from on high, or even halfway up.

The ever vigilant New York based Committee for the Protection of 
Journalists (CPJ) has picked up the news item and issued a 
statement on March 30 urging the Chief Executive to publicly 
declare that his administration would not allow journalists to be 
attacked with impunity by ensuring that the men who brutalized 
Shakil Shaikh be brought to justice. The CPJ has appealed to the 
military authorities to apprehend and prosecute the assailants 'who 
clearly indicated that their purpose was to silence Shaikh.'

Following form, the CPJ must have pressed the button and sent 
copies of their communication for information and necessary action 
to, inter alia, the American Society of Newspaper Editors, Amnesty 
International, Article 19 (UK), Article 19 (The Netherlands), 
Congressional Committee to Support Writers and Journalists, Freedom 
House, Human Rights Watch, Index on Censorship, International 
Association of Broadcasting, International Federation of 
Journalists, International Federation of Newspaper Publishers, 
International Journalism Institute, International PEN, 
International Press Institute, National Association of Black 
Journalists, National Press Club, Newspaper Association of America, 
The Newspaper Guild of North American National Broadcasters 
Association, Reporteurs Sans Frontieres, Overseas Press Club, the 
Society of Professional Journalists, World Press Freedom Committee.

The question I ask: Whoever be the hamhanded operation manager, and 
if a government agency man, does he realize the harm such incidents 
cause to the reputation of this country, already shredded and in 
tatters? Obviously not. He is most likely to be uneducated in the 
true sense of the word.

What Musharraf could do is to set his forces to work to find out 
exactly who the assailants were and why they found it necessary, or 
thought it useful, to act in such manner? If they turn out to be 
underlings of his government he should ensure that they are 
properly punished and made an example of, so that no such incidents 
recur. If they be nothing to do with his administration and acting 
on behalf of some other party or grouping or individual, the same 
should happen.

The general has finally told us what we have suspected for long, 
that he is not retiring on his due retirement date. No news. No 
surprise. To many of us, he remains the best option, in view of 
what alternatives we have on the ground. He is in command and will 
remain so for as long as his army backs him. From what we can 
judge, he is broadminded, unbigoted, uncorrupt. He is worth 

What we must do is get the economy going. A difficult task in view 
of the state of the country and the deserved hostility towards it. 
For instance, when an American wishes to travel to Pakistan to 
perhaps set up a business he checks into the US government official 
website to find out what he can about the country. The first word 
he will read on the lengthy blurb flashed up to him on Pakistan is 
'Warning' in bold print. He is informed that the Department of 
State warns US citizens to evaluate carefully the implications for 
their security and safety before deciding to travel to Pakistan. 
Information received by the US government, he reads, suggests a 
continued need for vigilance on the part of American citizens 
resident in or travelling through Pakistan. Because, the US 
government has received 'a growing body of information that 
suggests strongly that extremists based in Afghanistan are 
preparing to attack US interests in Pakistan in the near future.'

It alerts its citizens to the presence of an international 
terrorist, one Osama bin Laden, who lives in neighbouring 
Afghanistan, sheltered by his friends the Taliban, who has the 
sympathy and support of his fellow Muslims in Pakistan. All US 
citizens, resident in or travelling through Pakistan are urged to 
take all steps to increase their security awareness.

On the subject of tension between India and Pakistan over the 
military situation in Kargil, Kashmir, the prospective visitor 
learns that though this may have declined there are extremist 
groups in Pakistan who have voiced their opposition to the role 
played by the Pakistan government in de-escalation. He reads how in 
the past such groups have issued threats against the US government, 
and its citizens and facilities overseas.

Organized or flash rallies, demonstrations and processions occur 
from time to time throughout Pakistan and often take on an anti-
western or anti-American character. In Karachi and the southern 
parts of Punjab periods of protracted political and sectarian 
violence have been common, and such violence may pose a potential 
danger to American travellers. The reader is warned that during the 
period of protracted religious observance such as the one month of 
Ramazan and ten days of Muharram, sectarian violence is on the 

It continues on in the same vein.

This information is dated September 1999, but as far as the US 
government is concerned it remains fully valid. The military 
government has made not a whit of a difference.

Should the General and his men not make some sort of an effort to 
have this 'warning' changed for the better? By doing nothing about 
it, by seemingly being content with how things are, the risk is 
that a worse scenario will emerge.

The Pakistani Sahib: only half there
Ayaz Amir

AT our first formal mess night at the Kakul Academy in 1967 (how 
time flies) a strange ceremony greeted our eyes. At table as Rooh 
Afza was poured into our liqueur glasses a cadet seated at one end 
stood up, raised his glass and uttered the mystifying words, "Mr 
Vice". At this we all stood up, raised our glasses and in loud 
voices intoned, "The President of Pakistan". The Rooh Afza, not 
quite the liquid I would fancy now, went down our throats.

What on earth were we up to? As officers of the Indian army in days 
gone by drank to the health of the Sovereign, we, following much 
the same tradition, were drinking to the health of the president, 
then Field Marshal Ayub Khan and later General Yahya.

Things soon became clearer. We were being trained as officers and 
'gentlemen'. At Kakul the stress was on character-building and how 
we would fare in the face of adversity. Integrity was not to be 
compromised. Lying and cheating were the greatest sins in the 
calendar. And mess manners were to be impeccable.

In the civil and police academies it was the same. Hence the horse-
riding and table manners and the inculcation of a standoffish 
attitude. While no one was gauche enough to say this explicitly, 
what we were supposed to acquire were the attributes of an English 
gentleman. That many of the budding officers had only a dim 
understanding of what this meant was of course a different matter.

Pakistan's elite classes were much more homogeneous than they are 
nowadays. English manners defined the upper classes everywhere. In 
period photographs it is common to see members of the gentry 
wearing evening clothes. In Sherbaz Mazari's book of reminiscences 
there is a photograph of him and Nawab Akbar Bugti at the races: in 
morning suits and hats. The Sahibs were at one level and the masses 
at another and the dividing line between the two was sharp and 
clearly demarcated.

But a flaw ran deep through this flummery. To all outward 
appearances the Pakistani upper classes were more British than 
their erstwhile masters. But this Britishness was on the surface: 
all form and little substance. At its core lay a great deal of 

Being a gentleman in England or France or Czarist Russia was not 
only about horse races, balls, evening clothes and waltzing to the 
strains of the Blue Danube. More than these outward symbols of 
class it meant conforming to a certain code of honour. From public 
school to university and from there to the callings of adult life, 
adherence to this code is what defined a gentleman. He was the 
modern equivalent of the knight of the Middle Ages, the samurai of 
Japan, a member of the equestrian order in Rome. Indeed in all 
cultures where the martial tradition ran strong - Rajput, Maratha, 
Sikh, Afghan, whatever - he would have his counterpart.

But with the Pakistani Sahib there is a deep-seated problem. The 
Rajput, Sikh and Afghan derived his code of conduct and gallantry 
from his culture and history. When the European acted superior and 
paraded his colonial stuff, his attitude too fitted into a frame of 
history. His ideas of right and wrong, his conception of 
gentlemanly behaviour, his tastes and the culture these tastes 
reflected drew strength from a tradition going back to Homer and 
the earliest Greeks. His outlook on life thus had an historic 

What is the intellectual tradition to which the Pakistani Sahib can 
refer? Whence comes his inspiration? From a mishmash of two 
elements: the use of the English language as an end in itself, as 
opposed to English being a passport to an intellectual tradition; 
and visions of glory associated with India's Mughal past. To 
nothing more immediate or tangible can he (or rather we) relate. 
The British experience has left a powerful imprint on our psyche. 
The outward forms of that experience we have faithfully copied but 
its spirit we have failed to imbibe. This accounts in large part 
for our intellectual confusion.

It also accounts, I think, for the failure of our political class 
to master the problems of democracy and administration. Why must 
power lead always to excess? Why cannot its exercise be tempered 
with caution and moderation? To a great extent because the Sahib 
class, which is Pakistan's governing class, has no sense of 
history. To what models can it relate its conduct? In the light of 
what examples can it measure its steps?

The British experience has been reduced to a set of ephemera: 
turbaned waiters, leather sofas, chota pegs (or rather, since we 
like our whisky, burra pegs), tweed coats, cricket (now 
increasingly golf) and a vague nostalgia for an era when trains ran 
on time and things were more 'liberal'. Our public schools 
(Aitchison, Lawrence, etc) excel at turning out little scholars who 
can speak the English language with ease, have a confident manner 
but whose classical education does not go beyond a single play of 
Shakespeare's (that too because it is in the O Level curriculum).

Once upon a time institutions like Lahore's Government College and 
the Punjab University (and even places like Gordon College and 
Edwardes College) were homes to learning and produced students with 
a 'liberal' bent of mind. But with the collapse of college and 
university education Pakistan is producing a generation of 
political illiterates, with no sense of the past and little insight 
into the future.

This is not to say British public schools are nurseries of academic 
brilliance. But they are links in a chain which extends to the 
great universities of Oxford and Cambridge. There too you find the 
usual complement of time-servers and dunces. But there is also 
genuine learning which year after year chips away at the frontiers 
of knowledge, ever endeavouring to extend them, and sustains and 
enriches Britain's governing class. Much the same is true of other 
advanced countries.

What about India? In some ways it is better off than us. Up to the 
beginning of the 19th century the Indian mind knew very little of 
its past. It had no sense of history and Indian archaeology lay 
unexplored. Then under the impact of western and mainly English 
scholarship the past became a living reality for the Indian mind. 
Flushed with this discovery, an attempt was made to invent a past 
which never really existed, Nehru's 'Discovery of India' falling 
into this category of fiction writing.

Even so, the Hindu revivalism of the 19th century had an 
enlightened basis to it. But this movement was dragged in a 
different direction when Gandhi took Hindu nationalism closer to 
the people and gave it a reactionary colouring. Thus was drawn a 
sharper line between Hindus and Muslims. Thus was partition made 
inevitable. From Socrates onwards, popular causes have often led to 
unintended consequences.

But through all this India at least acquired a long line of heroes. 
The Pakistani pantheon by contrast is thinly peopled. Syed Ahmad 
Khan, Iqbal, Jinnah: that's about it. And even as far as these 
three are concerned efforts have been afoot to make them out to be 
what they were not. For the last 50 years and more Pakistan's 
clerics have tried putting a skull-cap on Jinnah while the Sahibs, 
awash in nostalgia, are drawing a line under their own failures by 
seeking the shortest passage out of the country.

Snakes & ladders, musical chairs
Irfan Husain

AS the results of the second phase of the local body elections 
emerge, it becomes even more clear that the government's ambition 
of marginalizing the PPP and Nawaz Sharif's faction of the Muslim 
League has not been realized.

The army's game plan was for non-political, independent candidates 
to win the bulk of the seats for Nazims/Naibs (heads and deputy 
heads) of the local bodies. This has not happened: so far, 
independents have got barely 30 per cent, with candidates supported 
either by the PPP or Nawaz Sharif's splinter group of the PML 
gaining virtually all the remaining seats. As usual, the religious 
parties got clobbered. Interestingly, Gujrat, the stronghold of 
Chaudhry Shujaat and Chaudhry Parvez, the kingpins of the 'like-
minded' (i.e., officially sanctioned) rump of the PML, went almost 
totally to candidates supported by the PPP.

These results should convince GHQ that its dream of creating a 
King's Party out of PML turncoats has failed to materialize. Or 
rather, this pathetic grouping has no credibility whatsoever as its 
lack of popularity has been thoroughly exposed. So if General 
Musharraf was hoping to ride this new steed into the presidency, he 
may discover he has acquired a broken down nag that is unfit to 
pull a tonga in Anarkali.

Indeed, the electoral exercise thus far has ended up playing the 
useful role of a barometer of popular will. Firstly, the low 
turnout of around 30 per cent shows that despite massive propaganda 
over the official electronic media, people have not been turned on 
by these elections. Very clearly, only political parties can turn 
out the vote. By arbitrarily banning them from openly nominating 
candidates, the government has robbed these elections of excitement 
and drama. The results also show that, like it or not, the 
Pakistani polity has developed into a two-party system, and no 
amount of official tinkering is going to change that any time soon.

The fact that the PPP-supported candidates have emerged with 28 per 
cent of the seats so far, with the PML (Nawaz) gaining 23 per cent 
would suggest that the government's efforts to malign the leaders 
of both parties have failed. Apart from widespread apathy, the 
elections were boycotted by the minorities in protest against the 
pernicious and divisive separate electorate system, and women wee 
not allowed to vote by their menfolk in some of the more backward 
parts of the country. Needless to say, the government did nothing 
to ensure that they exercised their right to vote.

All in all, government's pious hope to encourage a new class of 
non-political people to enter the arena would seem to have 
backfired with the same old families being represented in the new 
setup that is taking shape. The signal the electorate has sent is 
loud and clear: in the provincial and national elections due next 
yea, the race will be between Benazir Bhutto's PPP and Nawaz 
Sharif's Muslim League.

The King's Party as well as the religious groups will get hammered. 
Given this probable scenario, there will be a strong temptation to 
revive the assemblies and browbeat them to rubberstamp legislation 
to give the president extraordinary powers (including the notorious 
58(2)(b) empowering him to sack the PM).

Despite the sharp lessons emerging from the ongoing elections, it 
is doubtful if the regime has learned anything. Like a locomotive 
without brakes, it is thundering along a single, well-worn track. 

 Time and again, the military has intervened through a coup, and 
tried to solve the nation's many problems through a series of ad 
hoc measures that were supposed to add up to a magnificent edifice. 
Unfortunately, as soon as the junta du jour disappeared from the 
scene, the newly erected system crumbled, its only traces to be 
found in yellowing newspapers.

So far, our generals (and, to be fair, most of our political class) 
have failed to appreciate the central fact that political systems - 
specially democratic ones - need a solid foundation of traditions, 
tolerance and history behind them to function effectively. They 
grow and evolve gradually. If they are uprooted time and again, 
they cannot take root and flourish. But the military seeks to 
supplant them with a quick-fix patchwork that only lasts as long as 
the dictator of the day is around.

Many of General Musharraf's supporters (and there is no shortage of 
them) maintain that he is a good, broad-minded man, and given a 
choice between him, Benazir Bhutto and Nawaz Sharif, they would 
much rather have him. Given the track record of the three, so would 
I. But a system is not about individuals, it is about institutions 
and continuity.

Military rule, no matter what its facade, cannot provide a 
substitute for a just democratic order. If we have a decent soldier 
like General Musharraf today, what happens if and when he leaves 
the scene? It is not inconceivable of a Zia-like figure to replace 

Although democracy has been much maligned in Pakistan, the fact 
remains that it is the only system that provides for a peaceful 
transition, and where the ruled can turf out the rulers. Muslim 
history is replete with civil war accompanying the transfer of 
power. Indeed, fratricide and patricide were virtually the only 
means of seizing power. These traditions live on in most Muslim 
states today, and are an important reason to strengthen, not weaken 
the democratic process.

Unfortunately, politicians have proved too corrupt and immature to 
handle power once elected to high office. But their own many 
shortcomings apart, it is also a fact that time and again, they 
have been discredited and their governments destabilized by 
unscrupulous generals and shadowy agencies out of the control of 
elected leaders. Sections of the media have, consciously or 
unwittingly, played along, creating the impression in the public 
mind that politicians and democracy are the causes of all our 
problems. Under these circumstances, it becomes easy for the 
military to intervene openly, or interfere covertly.

This game of snakes and ladders has gone on too long. Mud slinging 
and sloganeering have replaced debate and discourse. Parties 
fragment, often by official fiat; politicians are victimized while 
tainted judges and generals get off scot-free; journalists are 
bought; and policies and programmes are scrapped as soon as one 
government is toppled and replaced by another. In short, there is 
constant confusion and chaos that is disastrous for the economy. 
And as the economy stagnates and the population increases, there is 
little fresh investment and unemployment soars.

As long as the present tension between the needs of the country and 
the perceptions of the military persists, this state of perpetual 
tug-of-war will continue. It is high time our leaders in and out of 
uniform display a measure of maturity and wisdom and sit down to 
discuss and formulate the rules of the game to ensure that both 
politicians and generals know the limits of their respective power 
and responsibilities. As a nation, we can no longer afford the 
musical chairs our leaders have been playing. If the results of the 
second phase of the local bodies elections help concentrate minds 
at GHQ, they will have played a very useful role.

PCB portraying players as villains in sad scenario

KARACHI, April 1: The Pakistan Cricket Board cannot be absolved of 
its share in creating chaos and confusion by portraying the team 
members as villains in a depressing scenario.

The PCB mischievously released selected portions of manager Fakir 
Aizazuddin's 30-page report to show that senior players and coach 
Javed Miandad are responsible for the entire crisis and for the 
team's poor performance in New Zealand.

The manager's report, as such, reveals nothing new but only 
confirms media reports which have highlighted in the recent past 
the growing resentment in the dressing room because of Miandad.

Not surprisingly, each time the chairman of the PCB, Lt Gen Tauqir 
Zia, denied the stories and came out to defend Miandad by 
threatening the players with dire consequences if they went against 
the former captain.

But now the publication of the manager's report confirms 
apprehensions that the PCB are looking for ways to show Miandad the 
door after having announced him as coach until the 2003 World Cup.

The PCB on Sunday reacted with surprise and disappointment to the 
release of Aizazuddin's report. The general told reporters that he 
would investigate the issue and inquire from the manager how the 
confidential document was leaked out.

But to put the records straight, although Aizazuddin is due to 
arrive here on Monday with the Pakistan team, his report had 
reached the cricket headquarters in Lahore on March 27. Dr Nauman 
Niaz, who toured with the team as cricket analyst, had brought the 
document with him after his visit was abruptly cut short by the 

No matter what investigations the PCB would conduct now, the cat is 
out of the bag. It will surely create a lot of problems for the top 
hierarchy of the PCB which is severely criticized for creating a 
situation of uncertainty in the team and conspiring against certain 

While Aizazuddin's report confirms the unprofessional and 
uncompromising attitude of Wasim Akram, it also endorses the fact 
that interference by some PCB officials in selectorial matters has 
irked skipper Moin Khan.

Sikander Bakht's resignation two months after Iqbal Qasim and 
Ehteshamuddin were sacked establishes further the point that the 
PCB had been repeatedly entering the out-of-bound area.

Instead of wasting their energies in finding the culprit who 
released the manager's report, the PCB would be well advised to 
inquire about who is the PCB official who is putting his foot down 
in team selections.

People associated with the game have no hesitation in pointing 
fingers at former captain and member of advisory panel Ramiz Raja. 
They believe that he influences the decision-makers in sending 
players of his choice, as it is evident from the departures of 
Arshad Khan and Mohammad Akram. They support their argument by 
saying that both the players play for Raja's Allied Bank and are 
always on tours, whether they are required or not.

Arshad Khan carried the towels in all the three Tests in New 
Zealand while Akram played at Hamilton where on a seamer-friendly 
pitch he had figures of 22-1-106-0.

Ijaz Ahmad was recalled after being thrown in the wilderness in 
July despite having poor scores of 1, 1 and five in three first-
class innings he played in the entire 2000-01 domestic season. His 
performance was not unexpected in the Tests as he scored 32 runs in 
three Test innings.

There's no need to say that the arrival of the three players when 
they were not required unsettled the team, besides imbalancing it 
as they were virtually left with limited options to choose from.

Pakistan cricket has never been in such doldrums in the past. It is 
fast reaching a point of no-return and may soon end up with the 
same fate as of the once invincible West Indies who are now the 
whipping boys of cricket.

Instead of blaming the players and humiliating them in public, the 
PCB officials should have the guts and morale courage to admit that 
they made the costly decisions which have left Pakistan's cricket 
future at a knife's edge.

Moreover, it will be a test of PCB character if it releases the 
entire Aizazuddin's report like it did last year while publicizing 
Justice Malik Mohammad Qayyum's report. The followers of the game 
deserve the right to know the other observations of the managers 
besides its analysis of the players on tour.

Pakistan may hire foreign coach

KARACHI, April 4: Pakistan is considering hiring South African 
Barry Richards or Australian Greg Chappell to coach the national 
cricket team, officials said on Wednesday.

"We are considering Barry Richards and Greg Chappell and we are 
trying to contact them, but nothing has been finalised as yet," 
Pakistan Cricket Board (PCB) chairman Lt Gen Tauqir Zia said.

"When we talk of a qualified coach to effect good results, why not 
bring a foreigner."

Former England batsman Geoffrey Boycott was also among candidates 
to replace Javed Miandad, who was sacked on Tuesday.

"I believe now it has become a universal practice of having a 
foreign coach. I have no hesitation in saying that the experiment 
has done wonders for the teams who have gone for it," director of 
the PCB Munawwar Rana said.

The precedent of Bob Woolmer (England), Duncan Fletcher (Zimbabwe), 
Dav Whatmore (Australia) and John Wright (New Zealand) taking over 
at South Africa, England, Sri Lanka and India respectively, has 
inspired the PCB's decision to hire a foreign coach.

"The candidates for the job will be shortlisted by the advisory 
council of the board very soon. But I am not sure if the foreign 
coach will be appointed before the team leaves for England early 
next month," he added.

Pakistan will play two Tests in May and then will take part in a 
tri-nation one-day series in June with England and Australia.

"Geoffrey Boycott could possibly be one of the men to be discussed 
for the job," Rana added.

The former England captain spent 12 days coaching at the Pakistan 
National Cricket Academy in Lahore in February and is due to make 
further visits in May and October.

But some former Test cricketers believe it would be a mistake.

"The idea would not work in this part of the world because of the 
different culture. Communication between the coach and the players 
is the integral part but unfortunately most of the Pakistan players 
don't understand English," said Intikhab Alam, a former captain and 
longest serving Pakistan coach.

"There have been successful coaches in Pakistan who will surely 
deliver if given the same backing and authority which Javed Miandad 
enjoyed before he was dumped," he added.

"If rest of the Test-playing teams have been successful with 
foreign coaches, there must be some reason. Pakistan cricket is 
already down and can't slip further even if the foreign coach 
fails. The experiment is worth giving a try," he said.

The PCB said it had hired an English fielding coach on a part-time 

"We have yet to decide about the new coach - but we have hired 
Somerset's Julian Fountain as a part-time fielding coach," PCB 
advisory council member Ramiz Raja said.

"Fountain has got a huge reputation as he works with the baseball 
technique and is presently working with the West Indian team."

Fountain will arrive in Pakistan in June for a three-month stint 
and will work in the national cricket academy set up in Lahore.

An English curator is also in Pakistan testing the soil to learn 
how best to make competitive pitches.-AFP/Reuters

Miandad humiliated for second time
Samiul Hasan

 KARACHI, April 3: Javed Miandad has fallen prey to the players 
power for the second time in three years when he was 
unceremoniously shown the door without being allowed to complete 
his specified term.

Miandad, appointed in March 2000, was given the mandate until the 
2003 World Cup in South Africa. But his ouster means that either 
Mudassar Nazar or Geoffrey Boycott might be given the task to 
prepare the team for the ultimate challenge.

Mudassar, who also coached the team on the 1993 tour to the West 
Indies, is incharge of the National Cricket Academy while Boycott 
will be arriving here on May 21 for his second visit to coach the 

There is also a proposal to utilize the Yorkshireman's services in 
helping the team with ground and pitch conditions besides other 
assistance to counter England in the two Tests to be played in May.

But as regards Miandad, country's most successful batsman, he had 
faced similar problems in April 1999 when he quit after just seven 
months as coach.

The similarity on both the occasions was players unhappiness 
against his style, approach and working method. If the players 
complained to deposed Prime Minister Nawaz Sharif in April 1999 
that the coach was making false and unsubstantiated allegations of 
their involvement in corruption, this time the players alleged that 
he was wrongly getting share from the prize money and logo deals.

To add insult to injury, Miandad's coached team lost the five-match 
series in New Zealand 3-2 and then had to suffer the embarrassment 
of suffering their heaviest defeat at Hamilton where they lost by 
an innings and 185 runs after winning at Auckland by 299 runs.

Whatever may be the case, the Pakistan Cricket Board (PCB) went 
full distance in defending Miandad before being left with no other 
option but to either sack the senior players or Miandad, as 
recommended by Faqir Aizazuddin in his tour report.

While one can feel sorry for Miandad, it would be unjustified to 
rest all the blame on the PCB officials. Any establishment probably 
would have done the same. However, the PCB cannot be absolved of 
criticizm for appointing Miandad in the first place when only a 
year earlier, he had problems with the same set of players.

The chairman of the PCB, Lt Gen Tauqir Zia, told reporters that he 
didn't agree that Miandad was a victim of players power. "You and I 
are looking at the issue from a different angle," he told mediamen.

"I know Miandad is hurt but I will pamper him like a kid," the 
general told reporters.

While Miandad's contribution in helping Inzamam-ul-Haq, Yousuf 
Youhana and Faisal Iqbal can't be denied, the fact that he had a 
controversial career ever-since he was first appointed captain in 
1979-80 can't be forgotten. His appointment had led to a players 
rebellion after the Australia tour in 1981-82 an on the eve of the 
home series against Sri Lanka.

Besides, his performance as coach was below-par as under his reign, 
Pakistan lost three out of four home series in the last two years. 
However, Miandad can take pride in saying that he was the architect 
behind Pakistan's successful tour to India in 1999 and then an 
equally good tour to the West Indies last year where Pakistan won 
the triangular series and lost the Antigua Test in controversial 

According to the PCB chairman, Miandad has been pulled out because 
his services were required at the cricket headquarters. But he has 
yet to be given any assignment. The PCB further claims that in 
Miandad's absence, there were not enough technocrats to handle day-
to-day affairs at home.

But while saying this, the PCB officials forgot that they had 
appointed another "indispensable individual" in Pakistan cricket's 
musical chair Yawar Saeed as manager for Sharjah who is also a 
technocrat and a member of the advisory council.

Yawar, who has previously managed cricket teams, was also a 
candidate for the ICC chief executive's office but failed to 
impress the committee who opted for Australian Malcolm Speed. He 
had been replaced as PCB director on Nov 21 by Brig Munawwar Rana.

Nevertheless, Miandad, despite being humiliated for the second 
time, is optimistic that he might stage a comeback. "You never 
know. I might be back for the England tour," he commented.

In a surprise move, the PCB didn't name a coach for the Sharjah 
tour because of the shortage of time. The explanation is hollow and 
void of any logic because the PCB were mentally prepared to sack 
Miandad and had hinted that quite a few times.

Waqar Younis was appointed captain for the Sharjah series even 
though Inzamam-ul-Haq looked a certainty after having served as 
vice-captain to an indisposed Moin Khan. But the decision appears 
wise and sensible if the fast bowlers command and authority in the 
Singapore tri-nation tournament last July is taken into 

But at the same time, Younis' appointment would surely provide a 
lease of life for a struggling Moin whose captaincy and place in 
the team is under serious threat. If Inzamam would have been the 
candidate to replace Moin, he would have been the incharge of the 
team in Sharjah and not Younis who will have to battle for a place 
in the Test squad when Shoaib Akhtar, Mohammad Sami, Wasim Akram 
and allrounder Abdur Razzaq and Azhar Mahmood regain complete 

However, the most mind-boggling decision is the recall of injured 
trio of Saeed Anwar, Abdur Razzaq and Mohammad Sami. Saeed and 
Razzaq didn't participate in the Test series after appearing in the 
one-day rubber, while a shin injury had sidelined Sami from the 
Hamilton humiliation.

It is unknown on what grounds the three regained their places. They 
neither appeared in any first-class matches nor played in any 
practice match of note. On the face of it, they have secured 
medical clearance on paper. Whether it is enough for the selectors 
to pick a player? Your guess in the same as mine.

Nur Khan urges PCB boss to accept rot and step down 
Imran Naeem Ahmad 

ISLAMABAD, April 6: In the wake of the disastrous New Zealand tour, 
a word of advice to Pakistan cricket chief, Lt Gen Tauqir Zia, has 
come from a legendary sports administrator who wants him to "accept 
responsibility for the rot and step down."

Air Marshal (Retd) Nur Khan, whose achievements as an administrator 
are etched in golden words in Pakistan cricket, hockey and squash 
history, told Dawn that although Tauqir has had a fair time at the 
helm of the cricket board, "we are today worse than ever before".

"When there is a high rate of unfitness, sickness, laziness and 
team morale is low, it can only be the basic responsibility of the 
person heading the institution," said Nur Khan, who headed the then 
Board of Control for Cricket in Pakistan (BCCP) from 1980 to 1984.

As many as half a dozen players including Wasim Akram and Abdur 
Razzaq dropped out during the New Zealand tour due to injuries 
where Pakistan lost the one-day contest 3-2 while drawing the Test 
series 1-1. "It is unheard of that half the team is unfit and 
Tauqir should accept total responsibility for this."

Nur Khan pointed out that so far Tauqir had totally been on the 
wrong track and had clearly failed to produce positive results.

"We have fallen so far behind that we will have to get modernised 
on all aspects including technique, training health care and 
preparation of pitches."

Terming the New Zealand tour as "chaotic", he felt that too many 
people were speaking up. "No one knew what the manager and the 
captain's roles were, it was an indication that there was no 

He strongly defended the players and said the practice of the 
management to blame them for all the ills afflicting the sport was 
wrong. "Who is more important, the players or Tauqir," he 

He also took a swipe at the Pakistan manager to New Zealand, Faqir 
Aizazuddin, who in his tour report, first published by Dawn last 
week, had criticised some of the senior players and also Javed 
Miandad, who was the coach. "A manager appointed only for one tour 
commenting on the players and the coach and blaming the seniors is 
not on."

Nur Khan dismissed the whole idea of removing the senior players 
and inducting in new ones as "nonsense".

"You just can't do without the senior players. A person like Wasim 
Akram is one of the exceptional players of this era. He obviously 
has his weaknesses but it was the management's job to nurture him 
like an outstanding horserace. He should have been the captain 
today had he been handled intelligently.

"Players are our treasure and the ones who deliver the goods.

They are the raw material that is to be made into steel and that 
is the responsibility of the management."

But he observed that the "unstable management" was not allowing the 
players to flourish.

"Destroying the career of a player is the easiest thing to do. All 
you have to do is not select the player. The job of the management 
should be to protect the players from their weaknesses that are 
bound to be there," said Nur Khan, who was also once the president 
of the Pakistan Hockey Federation during the 80s when the national 
side had all major title in its bag.

Nur Khan explained that although there had been so many changes in 
the top management of cricket with some of them being destructive 
managements, the team, he said was still there.

"This shows that the material is still there, the resilience and 
the capabilities of our players are there but it is a total lack of 
making sure that the head of the cricket board is first held 
responsible for whatever wrong occurs," the retired Air Marshal 

He felt that it was "absolutely necessary" at this stage to have 
foreign coaches and dubbed Geoff Boycott's recent two-week coaching 
stint to train Academy players as "meaningless".

"You have to look for the best man, with a proven track record who 
should be able to remove the players' weaknesses. He should have 
the aptitude to do this. Unless you are willing to do that sort of 
thing, hitting the top is not on,"he remarked.

He noted that the change in Indian mentality had come about largely 
because they hired New Zealander John Wright as coach. "Coaching is 
a very specialised job and whosoever the Pakistan Cricket Board 
decides to bring in, should not be allowed to experiment and learn 
at the cost of the Pakistan team."

He said it was about time that the management learnt to accept 
responsibility if the team does not perform. "In any institution 
the key man responsible is the CEO, but in our country 
unfortunately he has always got away scotfree."

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