------------------------------------------------------------------- DAWN WIRE SERVICE ------------------------------------------------------------------- Week Ending : 21 April 2001 Issue : 07/16 -------------------------------------------------------------------
Contents | National News | Business & Economy | Editorials & Features | Sports
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CONTENTS ===================================================================
NATIONAL NEWS + Islamabad, Moscow seek better ties + Rescheduling of loans essential for uplift + References against Asif, Benazir dismissed: Disqualification + Asian Development Bank to provide $200 million drought assistance + Justice Qayyum showed bias: SC + Complete shutdown in Sindh cities + Ex-MPA held in raid on MQM office + Rs3.1billion allocated for Chashma right bank canal project + WAPDA pays Rs1.5billion to NWFP + Geelani returns to APHC executive council + 52pc bottled water unfit: report + World Bank curtails $100million soft loan to Pakistan + More duty-free items in next budget + WAPDA seeks Rs10 billion as GST compensation + All Parties Hurriyat Conference sees little hope in talks + Five accords signed with Morocco + Musharraf suggests job-oriented schemes --------------------------------- BUSINESS & ECONOMY + WAPDA, KESC demand share: Sick units sale + Economic growth seen below 5%: ADB report on Pakistan + Morocco for joint business council: Youssoufi visits FPCCI + IBRD team wants sugar industry relocation + CCOP okays sale of 10pc National Bank of Pakistan shares + SBP sells bonds worth Rs11.2billion + Exporters assured financial assistance + Foreign banks focus on consumer banking + Drought will cause $2bn loss: Shaukat outlines remedial strategy + Demand for farm credit increases --------------------------------------- EDITORIALS & FEATURES + Flotsam and Jetsam Ardeshir Cowasjee + The come up pance of an upright man Ayaz Amir ----------- SPORTS + Pakistan wary of Sri Lankan backlash in final + Moin and Rashid rival for wicket keeper's slot + Pakistan put New Zealand where they belong

Islamabad, Moscow seek better ties
ISLAMABAD, April 19: Russian Deputy Foreign Minister Alexander 
Losyukov on Thursday held talks with Pakistan Foreign Ministry 
officials on bilateral and regional issues, officials said.

"During these consultations the entire range of bilateral relations 
were discussed in depth. Regional and international issues also 
formed part of the discussions," a foreign ministry statement said.

The two sides reaffirmed their willingness to enhance the level of 
bilateral relations and to work towards peace and prosperity in the 
region, it added.

Mr Losyukov also met Additional Secretary Aziz Ahmed Khan to review 
developments relating to Afghanistan, the statement said without 

Rescheduling of loans essential for uplift
By Ashraf Mumtaz

LAHORE, April 19: The chief executive, Gen Pervez Musharraf, on 
Thursday indicated that Pakistan would soon be approaching the 
World Bank to seek rescheduling of its outstanding loans to get 
some "breathing space"
 for at least three years, and spare funds for development.

He believed that in three to four years, Pakistan would be able to 
beat its debt servicing liability and get out of the debt trap.

The CE said this while inaugurating the National University of 
Computer and Emerging Sciences, set up by the Foundation for 
Advancement of Science and Technology (FAST).

Punjab Governor Muhammad Safdar, Science and Technology Minister Dr 
Ataur Rehman and FAST Chancellor Wasim Sajjad, chairman of the 
suspended Senate, were present.

Pakistan at present, said Gen Musharraf, was at the crossroads of 
its history and destiny as all resources were consumed by debt-
servicing and defence, leaving little for development. No 
development project, he stated, could be launched without getting 
more foreign loans and more loans meant adding to the already huge 
debt burden.

Describing it as a catch-22 situation, the CE said the solution lay 
in economic revival that would be possible only with augmented 
emphasis on the promotion of information technology and 

He said that though the rulers in the past 12 years had increased 
the loan liabilities by some $24 billion, the amount was not 
invested in sectors which could put the country on way to progress. 
Had the previous governments utilized the money on right projects, 
Pakistan would not have been caught in the debt trap as it was 
finding itself now.

The approach about foreign loans, Gen Musharraf said, needed a 
change to rid the country of the burden of loans and initiate 
development activities.

The CE said that at present Pakistan was earning about $30 million 
from the Information Technology and the government was determined 
to increase the earning target by 3,500 per cent.

Pakistan, he pointed out, had excellent infrastructure, human 
resources and skill in English language. Because of these 
capabilities, the general was confident that the country had the 
potential to make rapid progress. He said that with Dr Ataur Rehman 
as science and technology minister, Pakistan would certainly become 
an "information technology power house".

He said the pace set by his government in this field was simply 

He regretted that the Ummah was behind the Western world despite 
the fact that Muslim countries constituted one-fourth of the world 
population and were blessed with resources. The backwardness was 
mainly because of the gap in the field of technology.

He said the total number of universities in the Muslim countries 
and the PhDs being produced there were far less than the figures of 
a single country in the developed world. The situation, he 
observed, demanded that priorities should be reordered.

In the field of education, Gen Musharraf said the government was 
trying to streamline the system of scholarships. At present, he 
alleged, no one knew the size of amount allocated for scholarships 
or the identity of donors and recipients.

The CE said a system was being devised under which students 
obtaining first five position in all subjects would be given 
scholarships and they would be free to continue their studies in 
any university of their choice. It would be ensured, he promised, 
that a talented student did not have to discontinue his studies 
simply because of the poor financial position of his parents.

Talking to reporters later, Gen Musharraf held vested interests and 
anti-Pakistan elements responsible for all what was happening in 
Karachi for the last few days. He was confident that circumstances 
would return to normal soon.

He praised the university for making merit as the yardstick for 
admissions. He assured the management that the government would 
allot a plot in Islamabad for the university.

References against Asif, Benazir dismissed: Disqualification
By Our Staff Reporter

ISLAMABAD, April 19: Chief Election Commissioner Abdul Qadeer 
Chaudhry on Thursday dismissed two references seeking 
disqualification of Benazir Bhutto and her husband Asif Ali 

The references were filed under Article 63 of the Constitution by 
speaker of the suspended National Assembly, Illahi Bakhsh Soomro, 
and chairman of the suspended Senate, Wasim Sajjad.

The Chief Election Commissioner dismissed the references, keeping 
in view the judgment of the Supreme Court, whereby convictions 
recorded against and the sentences awarded to Ms Bhutto and Mr 
Zardari, the appellants, in the SGS case had been set aside, an 
official announcement said.

APP adds: The Speaker had submitted to the EC that the Ehtesab 
bench of the Lahore High Court had convicted both leaders of the 
PPP in the SGS case and disqualified them from holding membership 
of the National Assembly and the Senate. 

Therefore, the Speaker had stated, their membership of both houses 
of parliament be seized forthwith.

Asian Development Bank to provide $200 million drought assistance

ISLAMABAD, April 19: The Asian Development Bank is considering 
assistance of over $200 million for Pakistan in the wake of recent 
"We have sympathy with the government of Pakistan
 and are holding consultations in this respect," the bank's senior 
economic advisor, Naved Hamid, told newsmen at a press briefing on 

In this regard, he said, an ADB mission would arrive in two weeks 
to hold talks.

Naved Hamid said the assistance would include around $120 million 
from the bank's resource in Pakistan and around $90 million to be 
reallocated under the Social Action Programme for health and 
education facilities.-APP

Complete shutdown in Sindh cities: 
Dawn Report

KARACHI, April 18: A complete shutdown was observed in almost all 
cities and towns in Sindh on Wednesday in response to a call given 
by the Muttahida Qaumi Movement and the Jeay Sindh Qaumi Mahaz.

The strike turned violent in Karachi, where a man was killed and 
two others were wounded in three bomb blasts. Violent protests were 
reported from other towns.

The MQM and the JSQM had given the strike call to protest against 
what they alleged an artificial shortage of water and injustices 
being perpetrated against the province and its people.

Despite heavy deployment of the police and rangers throughout 
Karachi, five more vehicles were set on fire in the morning, 
bringing the figure to 42 during the last 36 hours.

According to the police, the figure was 27. The police claimed to 
have arrested about 600 people for their alleged involvement in 

A bomb exploded near Teen Talwar in the morning, killing a 40-year-
old scavenger, Banaras Khan, and leaving his companion, Moin, 
seriously injured.

Moin said they were picking papers in a garbage dump when Banaras 
found a pack of biscuit. Moin added that as soon as Banaras opened 
the pack, an explosion occurred.

Atiq, 13, was injured in the City Railway Colony when a hand-
cracker exploded. His condition was stated to be out of danger. 

The police found six more crackers in the locality.

The third blast was reported from the Dalton Supermarket in the 
Defence Housing Authority. The bomb was planted on a bicycle.

There was no commercial activity in the city and attendance in 
offices remained thin. Most of the educational institutions 
remained closed and transporters kept their vehicles off the road. 
People preferred to stay indoors.

HYDERABAD: The strike largely remained successful and peaceful. All 
main markets, including Tilak Incline, Shahi Bazaar, Sarafa Bazaar, 
Liaquat Colony, Resham Bazaar, Chotki Ghitti, Phulleli, Paretabad, 
New Cloth Market, Timber Market, Grain Market, Market Tower, 
Faujdari Road, Cantonment Shopping Centre and Saddar, remained 
closed. Similar reports were received from Latifabad and Qasimabad.

However, some shops were open on the Bacha Khan Chowk, an ANP-
dominated locality.

Except for a few rickshaws, there was almost no traffic and 
attendance in offices and educational institutions remained thin.

On Tuesday night, a government vehicle was burnt and another 
damaged by some youths. A State Mail Service vehicle (No CE-8289) 
was set afire by three miscreants outside the Railway Mail Office 
at the railway station.

The police picked up an MQM activist, identified as Moon, in unit 
No 9 of Latifabad. Tyres were burnt on Auto Bhan Road in unit Nos 
2, 4, 7 and 9. Some unknown persons stoned the vehicular traffic in 
Manzoorabad, Unnarpur and at the Jamshoro railway crossing.

MIRPURKHAS:All business centres remained closed throughout the day. 
Transporters also observed the strike.

Harassment gripped the town after the explosion of five crackers in 
different localities and burning of tyres in the Satellite Town.

The police late Tuesday night conducted raids and picked up over 
two dozen men without any reason. Those arrested were said to be 
affiliated with no political parties.

LARKANA:In Shahdadkot, some 50 JSQM activists took out a procession 
and chanted slogans against the water crisis in the province.

The police picked up four persons, but refused to disclose their 

The Ratodero police arrested 10 JSQM workers in midnight raids in 
connection with an FIR lodged on Monday against 150 workers of the 

Those arrested were identified as: Sudheer Siyanch, Abdul Razzak 
Qureshi, Azkar Samo, Baghi Soomro, Mehboob Siyanch, Muneer 
Jagirani, Imtiaz Langah, Jameel Langah, Ikhtiar Dahani and Akhtiar 

SUKKUR: A complete strike was observed in Ghotki, Pano Aqil, 
Nawabshah, Shikarpur and Jacobabad.

But, there was a cold response to the strike call in the Sukkur 

The police arrested Tariq and Shahid at Takkar Mohalla; Asif Ahmed 
and Iftikhar at Ghraibabad; and Wahid, Anwer, and Ajiz at 

KHAIRPUR: A partial strike was observed in the town. Main business 
centres, including Mall Road, Panj Gulla and Shahi Bazaar, remained 

Some youths blocked traffic on the National Highway for nearly an 
hour. They pelted stones at two vehicles. They dispersed when the 
police arrived.

Thirteen persons, including three shopkeepers, were arrested. They 
were identified as Sajjad Bhutto, Ashiq Mangi, Fayaz Khamisani, 
Abdul Hameed Soomro, Ghulam Rasool Makol, Anwar Chugtai, Abdul 
Rehman Lashari, Jamaluddin, Abdul Ghaffar and Mehrab Mughal.

The strike remained successful in Dadu, Sanghar, Thatta, Tando 
Adam, Shahdadpur, etc.

In Thatta, police arrested three JSQM activists. Two of them were 
identified as Urs Mallah and Saleem. Five youths were arrested in 

WAPDA pays Rs1.5billion to NWFP
By Our Staff Reporter 

LAHORE, April, 17: For the first time, WAPDA has paid Rs1.5 billion 
cash to the NWFP government for adjustment of net profit on hydel 
power. In the past, the federal government used to adjust these 
 against the liabilities of the provincial government. The WAPDA 
paid Rs1 billion in December 2000 and Rs500 million in January 2001 
to the NWFP.

This payment was made despite the fact that the federal and 
provincial governments owe Rs36,161 million to WAPDA at the end of 
February 2001 out of which Rs3,467 million are outstanding against 
the NWFP, provincial government agencies and domestic consumers of 
FATA, in the shape of unpaid bills.

The accumulation of dues against the government agencies has 
worsened the liquidity position of WAPDA particularly in the 
backdrop of substantial increase in fuel prices and payment to the 
Independent Power Producers (IPP) during the current financial year 
that has cost the authority an additional burden of Rs18 billion.

However, despite this financial crunch, WAPDA remains committed to 
paying the amount of Rs6 billion per annum to the NWFP, and the 
balance amount shall be paid by June 2001.

Geelani returns to All Parties Hurriyat Conference executive 
By Jawed Naqvi

NEW DELHI, April 17: All Parties Hurriyat Conference moved to avert 
a major schism among its key leaders on Tuesday, re-instating a 
pro-Pakistan member to its executive council
, and inviting all the 23 plus constituents later this week to 
consider India's offer for reviving talks with it and other groups, 
its leaders said.

APHC chairman Abdul Gani Bhat told Dawn from Srinagar that the 
executive council had met on Tuesday to consider the talks offer 
but ended with the reinstatement of Syed Ali Shah Geelani, the 
representative of Kashmir's pro-Pakistan Jamaat-i-Islami, who had 
been accused by the group of indiscipline.

Mr Geelani had described the Kashmir issue as a religious one while 
the rest of the seven-member executive council had gone along 
recently with the view that the struggle was essentially a 
political matter, involving the right to self-determination of a 
people under the UN charter.

"The issue of Mr Geelani was taken up and solved satisfactorily," 
Mr Bhat said. "He will now onwards attend the executive council 
meetings and contribute to discussions and the decisions."

Mr Bhat had met Pakistan's High Commissioner to India Ashraf 
Jehangir Qazi in Delhi last week amid media speculation that talks 
were aimed at thrashing out the lingering rift within the APHC. It 
was not immediately clear if Mr Geelani's reinstatement was the 
result of that meeting.

Meanwhile, a confidant of Mr Geelani and the executive member, 
Sheikh Abdulaziz, left on a self-declared private visit to Pakistan 
on Tuesday. The fact that PTV showed an entire documentary on 
Abdulaziz's life hours before he was due to have arrived on 
Tuesday, suggests that the visit would be a political event.

"I am a politician. I have a political mission in life," Sheikh 
Abdulaziz told Dawn before his departure. "If there is a compulsion 
to help the cause of Kashmir out of a private visit to Pakistan, I 
cannot say no."

There is thinking within the APHC that the group could be divided 
between those who have a passport to travel and those who do not. 
The former could be sent to conduct talks with interlocutors in 
Pakistan. The others could participate in the discussions with 
former defence minister K.C. Pant, India's nominee to kickstart 
talks on Kashmir.

Mr Bhat declined to comment on the line of thinking but other APHC 
officials said the proposal would be considered at the expanded 
meeting of the APHC's working committee on Saturday and the larger 
general council meeting on Monday. Mr Bhat said he could not recall 
when or if the last APHC general council meeting, comprising all 
the constituents, had met.

He said the working committee had met once sometime last year after 
he was elected the APHC chairman.

Some clue about the move ahead, if any, was given by Maulvi Abbas 
Ansari, another executive council member, who did not attend 
Tuesday's meeting: "We never said the guns could solve the problem 
of Kashmir. We have always believed that the only lasting solution 
will come through a dialogue. But this offer of talks is a dhoka 
(treachery)," he told Dawn.

52pc bottled water unfit: report
By Khaleeq Kiani

ISLAMABAD, April 17: Over 52 per cent of the branded and bottled 
mineral water available in the market is unsafe for human 
consumption, a laboratory analysis of the federal government 

"Only 10 out 21 brands were found safe for human consumption and 
the remaining 11 brands were found unsafe/unfit for drinking," said 
the laboratory report of the Pakistan Council of Research in Water 
Resources (PCRWR).

The PCRWR prepared the report after a random collection of samples 
of the bottled mineral water marketed by 21 renowned brands in 
Rawalpindi and Islamabad, though these companies have a 
distribution network throughout the country. The local 
administration, led by a magistrate, the Consumer Rights Commission 
of Pakistan and the Food Control Authority were also involved in 
the sample collection and finalization of the report.

The report, prepared under the instructions of the federal minister 
for science and technology, Dr Attaur Rehman, and submitted to him 
early this week, came following some reports that most of the 
bottled mineral water in the market was unsafe and hazardous and 
subsequent suo motu action taken by the Lahore High Court.

Official sources told Dawn that samples of mineral water had been 
obtained from different shops and stores which had been sealed in 
the presence of the magistrate before being taken to the water 
quality lab of the PCRWR.

"Samples of 21 brands of bottled mineral water currently being 
marketed were collected and analyzed. In order to verify the 
results of water analysis conducted at the PCRWR lab, these samples 
were also got analyzed by three other reputable laboratories in 
Islamabad," said the report.

"The unfit brands also include a brand claimed to have been 
imported. In some samples variation in labelled and actual values 
in the range of 99 to 1,067 per cent was detected," said the PCRWR 

The PCRWR has been directed by the minister to continue the 
analysis of mineral water on a six monthly basis.

 World Bank curtails $100million soft loan to Pakistan
By Our Staff Reporter

ISLAMABAD, April 17: The World Bank has curtailed $100 million soft 
loan to Pakistan's $785 million National Drainage Programme (NDP) 
due to slow-paced institutional reforms and some unapproved 
schemes, official sources told Dawn.

A bank mission led by Sakwa Bunyasi that spent around three weeks 
in Pakistan for the mid-term review (MTR) of the project has 
conveyed its decision to the relevant authorities. The mission has 
submitted its initial MTR report to the federal government, these 
sources said.

The bank has refused to accept Punjab's Rs3 billion scheme for 
canal lining besides a couple of small dams both in Punjab and NWFP 
costing over a billion rupees. It also refused to involve Azad 
Kashmir in the drainage programme because the three issues were not 
directly covered by the World Bank approved plan of action.

The bank has submitted two different scenarios for slashing its 
$285million soft-term financing. "$100million is the minimum cut 
conveyed by the Bank but this cut can go much higher", said these 

The bank has expressed concern over unilateral alteration in the 
investment priorities taken up by the Punjab government despite its 
repeated warnings. As a result reform programme specified under the 
project is not visible on ground. Similarly, Balochistan has also 
given in writing it was pulling out of the programme and obviously 
the allocation for Balochistan was also withdrawn, sources said.

The physical (institutional reforms) and fiscal progress 
(investment component) on the project is just 20 per cent and 17 
per cent respectively as yet against the target of 50 per cent 
while half of the six and half year period of the NDP has already 

"No new core project envisaged under the investment component of 
the NDP has yet commenced at site except Left Bank Out fall Drain 
(LBOD) remaining works and eight operation and maintenance 
performance contracts in Sindh. During the previous two years, 
major part of the works carried out by the provinces had been of 
the type of O&M crash programme and rapid rehabilitation of canals 
and drains. The delay in commencement of main steam/core sub-
projects was partly due to changing priorities on the part of 
provinces and partly due to lack of flexibility/availability of 
project formulation resources with PDC (design and supervision 
consultants)", said an official document related to MTR.

The 54-month NDP, launched in January 1998, has an estimated cost 
of $785million including donor contribution of $525 million. The 
world bank is providing $285million on soft-term 0.75 per cent 
service charges. ADB has a share of $140million at one per cent 
interest while Japan Bank for International Cooperation (JBIC) is 
contributing $100m at two per cent interest rate.

"The interest free aid of $525million that was secured after close 
competition from Indonesia and India a few years back is in real 
problems just because of inefficiency and critical role played by a 
few provincial officials. It is unfortunate that Pakistan is going 
to loose $100million soft aid at a time it desperately needed 
foreign exchange for balance of payment support", said a senior 
official at the water and power ministry recently.

"When the world bank cuts its share, it set a precedent for other 
contributing partners to follow and it is going to be a serious 
setback for Pakistan's reforms programme and performance 
credibility", said the official but added that luckily it did not 
happen so far.

With 40 per cent share in the programme, Punjab was well on 
schedule till a year back but new bureaucratic set up in the 
province has put the programme in the reverse gear, said these 

While all the provincial governments had introduced laws to 
establish Provincial Irrigation and Drainage Authorities (PIDAs), 
they failed to constitute area water boards and farmers 
organisations to implement and run the programme on self sustained 

The $785m NDP envisaged $699m investment component, $35m 
institutional reform component, $27million sector planning and 
research component and $24m programme coordination and supervision 

More duty-free items in next budget 
By Ihtashamul Haque

ISLAMABAD, April 17: The government is reviewing baggage rules to 
allow overseas Pakistanis to bring with them more items free of 
duty. "We plan to make the existing baggage rules more flexible for 
the overseas Pakistanis
 so that they can bring more duty-free goods," said Minister for 
Finance Shaukat Aziz.

Talking to Dawn here on Tuesday he said a good number of items will 
be added to the list of duty-free items. "It is a budget issue and 
will be made public in the budget for 2001-2002, " he further 

The finance minister pointed out that maximum possible facilities 
and incentives would be offered to overseas Pakistanis so that they 
could invest in Pakistan and, at the same time send their 
remittances through normal banking channels instead of the infamous 

He said there has been a 20 per cent increase in remittances this 
year and, "we are further expecting a breakthrough in it." These 
remittances have increased from US$1 billion to 1.2 billion this 
year, which shows an encouraging trends, he added.

He conceded that it was still a difficult task to restore the 
confidence of the overseas Pakistanis, since the previous 
government froze foreign currency deposits in May 1998.

In this regard he referred to the recommendations of the Task Force 
on Overseas Pakistanis, which, he pointed out, will be implemented 
to attract investment by the overseas Pakistanis.

Responding to a question, the minister said the government was 
expecting to initially attract 20 to 25 per cent new investment 
next year. "Yes it is true that our overseas Pakistanis' annual 
income is over US$60 billion which is equivalent to our Gross 
Domestic Product (GDP)," he said adding that the government will 
soon be promulgating an ordinance to ensure protection to the 
overseas Pakistanis' investment and their bank deposits.

Asked what new opportunities were being offered to overseas 
Pakistanis to invest in various fields, the finance minister said 
that Board of Investment (BoI) had been directed to work out 
details in this regard.

"A real one window operation is being ensured by the BoI," he said.

Similarly, he said that the role of the embassies was being 
enhanced to help extend all possible cooperation to overseas 
Pakistanis. "Now our embassy staff will have to be responsible 
people, and in case they do not perform their duties according to 
the satisfaction of the overseas Pakistanis, they will be 
recalled," he warned.

To another question he said that laws were being made stringent to 
discourage transfer of remittances through hundi system. "But we 
are primarily focussing on improving the performance of Pakistani 
banks aboard," he added.

He said there was no Pakistani bank in Saudi Arabia due to Saudi 
laws and that was why the government has decided to work through a 
Saudi bank to ensure speedy transfer of remittances from there.

WAPDA seeks Rs10 billion as GST compensation
By Khaleeq Kiani

ISLAMABAD, April 16: The Water and Power Development Authority has 
demanded over Rs10 billion from the government as advance 
compensation for the general sales tax it will pay during fiscal 
year 2001-02.

Power utilities, WAPDA and the Karachi Electric Supply Company 
(KESC), are required to pay 15 per cent general sales tax (GST) to 
the central board of revenue (CBR) on electricity they sell to the 

The utilities also compensate independent power producers (IPPs) 
for their GST payments.

Under a federal government decision taken last year, the ministry 
of finance was required to release funds to meet the shortfall for 
each financial year in advance on account of domestic, agriculture 
and commercial consumers up to 500 units due to imposition of GST 
where WAPDA revenue was decreased by 15 per cent for the protected 

WAPDA has now told the federal government that it is facing losses 
on account of the GST during the ongoing fiscal year. Early this 
month, the utility complained to the chief executive that the 
finance ministry had withheld its Rs5.4 billion under the GST head 
and instead deducted around Rs2 billion as debt servicing 

To avoid repetition of this situation and protect its financial 
position in the upcoming fiscal year, WAPDA has asked the center 
for a Rs10 billion budget provision in the fiscal year 2002 to 
compensate it in advance on account of protected consumer 

The amount has been calculated on the basis of six per cent growth 
in power sale. WAPDA estimated that it would face an average loss 
of around Rs1 billion every month which should be paid in advance.

Under the IMF-sponsored GST mechanism, IPPs are required to pay the 
GST to the CBR when they sell power to utilities and are 
compensated when they get energy payments from utilities. The 
utilities are also responsible for GST collection on electricity 
they sell to consumers. However, in real terms the consumers are 
protected from GST payment but utilities have to make GST payments 
to the CBR.

At the time of GST imposition early last year, power utilities were 
promised that the finance ministry would compensate them through a 
revolving fund so as to save them from the negative financial 
impact of the GST.

 All Parties Hurriyat Conference sees little hope in talks
By Jawed Naqvi

NEW DELHI, April 16: A much publicised Indian move to revive talks 
with Kashmiri groups could end up as a public relations drill by 
New Delhi to fulfil recent assurances it gave to worried
leaders of Iran and the United States, analysts and news reports 
said on Monday.

They said a proposal announced by former Indian defence minister 
K.C. Pant on Sunday to invite the All Parties Hurriyat Conference 
to talks headed by him offered little realistic hope to resolve the 
festering issue with either Pakistan or Mujahideen groups in the 

APHC officials said the group's executive council would meet later 
this week to give a formal response to Mr Pant's offer to hold the 
proposed talks in tandem with other Kashmiri groups, a possibility 
that has already been rejected by APHC chairman Prof Abdul Gani 
Bhat as "an unavoidable crowd."

Prof Bhat was not available for his comment to Dawn on Monday. But 
he told PTV in a telephone interview from Srinagar that the 
proposed talks to be headed by Mr Pant would not succeed. Among the 
reasons he gave for his fears was the perception in Kashmir that 
restoration of peace in the Himalayan region the ostensible goal of 
the talks was not possible without addressing the issue as a 
dispute involving the Hurriyat, Pakistan and India.

"If India wants to hold the talks under Indian constitution which 
regards Kashmir as an internal matter, then we are not hopeful of 
making any headway," Prof Bhat said. "If there is no scope for 
expressing the issue as a quest for self-determination of Kashmiri 
people, then the whole exercise is futile."

Among the possible reasons being considered for Mr Pant's 
announcement is the timing of it, just a day before a potentially 
turbulent parliamentary session. Moreover, the start of summer in 
Kashmir is always worrisome for the Indian forces manning the LoC 
which becomes even less manageable as the snow begins to melt.

Besides, internationally Kashmir is seen as a potential flash point 
between two uneasy nuclear neighbours. Official sources said the 
issue was discussed in Washington and in Tehran when the Indian 
foreign minister and the prime minister went calling on the leaders 
there recently. New Delhi is believed to have given its standard 
reply to the eager queries that the matter was going to be resolved 
through dialogue.

"The latest so-called talks offer is precisely that," said one 
exasperated APHC leader. "When we want to suggest something the 
doors are slammed on our faces. And suddenly there is this. And 
that too so soon after the tall promises."

The reference was to Prime Minister Atal Behari Vajpayee's 
unilateral cease-fire offer in November last year, a move that had 
also raised hopes within the APHC of likely travel to Pakistan to 
talk both to the government and the leaders of Mujahideen groups 

But despite all the misgivings surrounding New Delhi's move in 
Kashmir there was no emphatic or clear answer from the APHC as to 
whether the group would eventually join the talks with Mr Pant or 

If anything, perhaps something could yet be discerned from a few 
straws in the wind from recent remarks by Prof Bhat to Dawn.

"Here are three parties to the dispute," he said last week. "India, 
Pakistan and people of Jammu and Kashmir. If two out of three start 
talking where do they reach? No nomination of a key negotiator, no 
talking with a crowd will carry any of us anywhere. We will have to 
rise above intransigence, above arrogance. And prove with courage, 
wisdom and pragmatism to finding durable solution of the problem of 

"This requires involvement of India, Pakistan and the APHC as a 
political forum representing the sentiments and the political 
aspirations of the people of Jammu and Kashmir," he said. "We will 
have to recognize the sombre political realities as well as 
understand the dynamics of the situation obtaining across the 
subcontinent. And engage in a positive political dialogue, not for 
the pleasure of it but for achieving a result in terms of a final 
resolution of the Jammu and Kashmir problem.

"This is the reason that we propose that we undertake the visit to 
Pakistan which the government of India accepted a genuine effort on 
our part to consolidate the peach process so much so that the PM 
made statement on Jan 21, 2001, that there will be no delay now in 
the issuance of passports. The statement issued (about Mr Pant's 
talks offer) seems to be an attempt to block the trip by Hurriyat 
to Pakistan, which is probably tantamount to derailing the peace 
process coupled with generating mistrust."

Five accords signed with Morocco

ISLAMABAD, April 16: Pakistan and Morocco on Monday signed five 
agreements of co-operation to strengthen their relations in the 
fields of economy, shipping and tourism.

Moroccan Prime Minister Abderrahaman Youssoufi and Chief Executive 
Gen Pervez Musharraf were present on the occasion. The two leaders 
earlier held wide-ranging talks on bilateral, regional and 
international issues.

The five agreements inked between the two countries included 
agreement on establishment of Joint Ministerial Commission (JMC) 
between the governments of the Islamic Republic of Pakistan and the 
Kingdom of Morocco. Commerce Minister Abdul Razzak Dawood and 
Moroccan Minister for Economy and Planning Abdel Hamid Aouad signed 
the agreement on JMC on behalf of their countries.

The agreement on Merchant Shipping and Related Maritime Matters was 
signed by Moroccan Minister of Transport and Merchant Marine 
Abdeslam Znined and Federal Communications Minister Lt-Gen (retd) 
Javed Ashraf.

The third agreement on Protection and Promotion of Investment was 
signed by Commerce Minister Razzak Dawood and Mushtapha Mansouri, 
Morocco Minister of Industry, Commerce, Energy and Mines.

The MoU for bilateral consultations between ministries of foreign 
affairs of Pakistan and Morocco was inked by Foreign Secretary 
Inamul Haque and Mohamed Rchad Bouhlal, Moroccon General Secretary 
of the Ministry of Foreign Affairs and Co-operation.

The agreement on tourism was signed by Abdel Hamid Aouad of the 
Ministry of Planning and Economy of Morocco and Samin Jan Babar, 
Federal Secretary for Culture and Tourism.

Under the JMC, the two sides would discuss the whole gambit of 
bilateral relations with special emphasis on trade, economic and 
merchant relations between the two countries.

Talking to APP after the signing ceremony at the Chief Executive's 
office Director (Africa) Manzoor-ul-Haq said the agreement on 
Merchant Shipping will provide free access to each others vessels. 
The agreement on protection and promotion of investment will 
facilitate investment in the two countries.

Under the MoU for bilateral consultations, he said the foreign 
secretaries of the two countries would annually meet in Islamabad 
and Rabat to discuss ways for promotion of their bilateral ties in 
various fields.

The agreement on tourism will help promote tourism between the two 
sides, he added. -APP

Musharraf suggests job-oriented schemes
By Habib Khan Ghori

KARACHI, April 14: Chief Executive Gen Pervez Musharraf on Saturday 
inaugurated the ambitious programme for economic revival of Karachi 
and pledged to restore the past glory of the city and to transform 
it into an international hub of economic and commercial activity.

In this connection he suggested nine preferences for the metropolis 
with priorities for the construction of Right Bank Outfall Drain 
(RBOD) to take the affluent to sea, the 100 mgd K-3 bulk water 
supply scheme for Karachi and the Northern Bypass.

Gen Musharraf made this announcement at a function held at the 
Governor's House and attended by the elite of the city.

He referred to the speeches made by the Sindh Governor Mohammedmian 
Soomro, Finance Minister Dr Abdul Hafiz Shaikh and Vice Chairman 
EDC Shahid Feroz and said that every one present at the occasion 
shared the emotions and he himself stood motivated.

He said the issue of revival of economy and creation of Economic 
Development Council was too important for everybody present there.

Gen Musharraf said that the situation in Karachi and Sindh was the 
same as in other parts of the country and declared: "We all will 
join hands to put the pieces together not only in Karachi and Sindh 
but also in the whole country.

"I am very sure that with the conviction and sincerity we have, and 
the cooperation between the provinces and the Centre I have no 
reason and even doubt that we will not succeed in doing this."

Recalling the history of Karachi as an economically prosperous 
city, he said it had been the heaven for the investors, commercial 
heart of Pakistan and the city for the rich and the poor, and that 
was the beauty of this metropolitan city.

But unfortunately and very sadly in the past decade the policies of 
the governments had brought miseries, deprivation, despondency to 
this once most lively metropolis.

He said this situation could not be allowed to persist. "This is 
our city. This is my city. This is your city. This is the city of 
Quaid-i-Azam and therefore we have to bring order into its civic 

Terming the creation of the EDC a wise initiative the chief 
executive said this will certainly be remembered as a work of its 
kind but will also provide a lead to others to emulate. Their ideas 
will certainly optimize the intrinsic talents and skills of 
Karachiites for their own benefits and prosperity, specially the 
prosperity of teeming millions of Karachi.

He noted with appreciation that the Sindh government has 
accelerated the process of Master Plan for Karachi and hoped that 
this will meet the aspirations of citizens and will make it a 
modern, efficient, progressive and a vibrant city. This revival of 
the Master Plan, he hoped, will regain for Karachi its lost status.

He assured as maximum support by the central government for the 
plan and the EDC and pointed out that the real solution lies 
converting Karachi into a Hong Kong where every house is a cottage 
industry. However, he said, he would give priority to look after 
the poor of Karachi. "We owe it to them and to the teeming 
millions, some of whom may not be getting two square meals every 

"We owe to these poor people to improve their lot," he said adding 
that ameliorating conditions of the poor, means getting them job 

Gen Musharraf said the solution to this problem was not to create 
jobs in both the public and private sectors but to generate more 
economic activity.

While we try to generate economic activity to increase the 
industrial growth in Karachi and elsewhere to generate jobs for the 
poor, the real solution lies in really converting Karachi into a 
Hong Kong where the individual, every house, every family becomes 
the part of a cottage industry within the city.

He said while our main source of export being textile, we could 
talk of producing buttons and small things like zippers, hangers, 
plastic bags, cosmetic, lamps and shades, embroidery, plastic 
goods- these are the areas where we need to open training centres 
for the poor in these skills and then providing them with loans to 
open business houses themselves, the cottage industry in their own 
homes. He said this is one of the areas which can provide economic 
prosperity to the people of Karachi.

Besides, he pointed out, the slums of Karachi needed respectability 
by developing low-cost housing schemes which are generally ignored.

He said that this subject was discussed in Islamabad and the Sindh 
government will get involved in more details in these housing 
schemes for the poor of Karachi.

WAPDA, KESC demand share: Sick units sale
By Khaleeq Kiani

ISLAMABAD, April 19: The power utilities WAPDA and KESC have 
demanded share from the sale proceeds of around 868 private sector 
sick industrial units the Corporate and Industrial Restructuring 
 (CIRC) starts selling this month.

"WAPDA and KESC, being the utilities of national importance, be 
given top priority for giving share from the sale proceeds of the 
sick units against the outstanding bills," said chairman WAPDA Lt-
Gen Zulfiqar Ali Khan, in a letter to the federal finance 

In his clear disagreement with the decision of the finance ministry 
and subsequent approval of the chief executive on March 9 this 
year, the general said: "It is clear that the decision is going to 
aggravate the financial position of WAPDA."

On a presentation from the finance ministry and the CIRC on March 
9, the chief executive approved that "once the non- performing 
assets are sold by CIRC, the tax collecting agencies of the 
government, like the CBR and WAPDA, should only charge their 
principal outstanding amounts and not the accumulated penalties".

The decision entailed waiver of late payment surcharge, running 
into billions of rupees the utilities were entitled to get from 
consumers. The WAPDA chief demanded that this decision should be 
reconsidered and withdrawn. "If this surcharge is to be waived off, 
then the mechanism for compensating WAPDA may also be 
communicated," said the WAPDA chief.

In a rather complaining tone, the WAPDA chairman listed at least 
six areas, where the utility lost around Rs35 billion for upholding 
goodwill of the military government, socio-economic uplift and 
financial viability of various sectors without any compensation 
from the federal government in return.

The chairman complained that firstly the stuck up amount of WAPDA's 
dues affected its liquidity position, secondly the deprival from 
the amount of interest that could have earned on this amount and 
now the waiver of late payment surcharge, all adding to its woes.

The WAPDA has also warned that it would not be able to comply with 
cash liability obligations like payments to oil and gas companies 
and independent power producers (IPPs) and maintain its system to 
let the power reach its customers, if the cash scarcity continues.

The chairman said the two relief packages, provided by the utility 
on the government's promise of compensation, for agricultural and 
industrial sectors that resulted in bumper wheat crop and huge 
foreign exchange saving, cost it Rs4 billion but the government did 
not honour its commitment of compensation.

Another Rs2.4 billion loss due to fuel price increases during 1999-
2000 were not passed on the consumers to maintain electricity 
prices for upholding the goodwill of the government among the 
general masses.

"On direction from the government, the arrears of FATA, AJ&K and 
agricultural tubewells of Balochistan pertaining to the period 
prior to 01-01-99 to the tune of Rs8.72bn were written off without 
any compensation to WAPDA," said the chairman.

During fiscal year 2000-01, the successive increase in fuel prices, 
devaluation of Pak rupee, settlement of Hubco/ Kapco case and 
reduced hydel generation imposed a huge financial burden of Rs14.4 
billion. "Consequently, Nepra was requested to allow an increase of 
98 paisa per KWh which was not hitherto granted. Instead minor 
increases at paisa 13/KWh in Sept 2000 and paisa 8 per KWh in Dec 
2000 for selected categories of consumers were granted. However, 
these meagre increases are of no reasonable help to WAPDA", the 
WAPDA chief noted.

WAPDA said in accordance with the decision of the chief executive 
on June 29, 2000 and updated on August 10, 2000, the federal and 
Balochistan governments were required to pick up the amount of 
subsidy of agricultural tubewells over and above Rs4000 on 50:50 
basis. The decision was changed in a meeting at the chief 
executive's office on February 20, 2001 and instead WAPDA was 
directed to pickup the subsidy over and above Rs6000 to be paid 
Rs4000 by the customer plus Rs2000 by the Balochistan government.

The chairman also expressed his displeasure over direct 
communications from the ministry of finance and said, "it would be 
appropriate if such matter is routed through the ministry of water 
and power, which is the relevant ministry for this purpose."

Established in September last, the CIRC identified 868 sick 
industrial units in the private sector, having loans to the tune of 
Rs107 billion from six state-owned banks and development financial 
institutions like National Bank of Pakistan, United Bank, Habib 
Bank, Industrial Development Bank, National Development Finance 
Corporation and Agricultural Development Bank.

Economic growth seen below 5%: Asian Development Bank report on 

ISLAMABAD, April 19: The Asian Development Bank on Thursday 
projected economic growth of less than five per cent for Pakistan 
for the fiscal year to June 2002, mainly because of a slowdown in 

The bank said in its 2001 Asian development outlook that drought 
and a shortage of irrigation water caused the slowdown.

Finance Minister Shaukat Aziz said this week the water shortage is 
forecast to knock $1.1 billion off the country's GDP during the 
2001 crop year, which runs from April to November, as crop yields 
shrink and imports of fuel oil to generate thermal power rise.

The country has already scaled back growth in its gross domestic 
product (GDP) to 3.8 per cent from a targeted 4.5 per cent for the 
fiscal year to June 2001.

Aziz also warned that the drought would increase pressure on 
Pakistan's balance of payments by around $1 billion and contribute 
to a widening trade gap due to higher commodity imports and fewer 

INFLATION: ADB said Pakistan's inflation was also expected to rise 
to six per cent in fiscal 2001/02 as the government passes on to 
consumers delayed increases in energy prices and the effects of the 
recent depreciation of the rupee.

Pakistan's rupee hit record lows against the dollar in March and 
April on debt servicing payments and the government has recently 
raised energy prices as agreed with the International Monetary Fund 
under a $596 million standby loan programme.

The bank said Pakistan would have to work hard to keep its budget 
deficit to 5.2 per cent of GDP, another key target agreed with the 

"To ensure that the target of reducing the deficit to 5.2 per cent 
of GDP in 2001 is met, strict implementation of the new revenue 
measures is essential," the report said.

"In addition expenditure controls must include containment of 
defence spending as well as targeted spending cuts if revenue 
collections lags," the report added.

Pakistan also faces a huge debt burden which the government says 
has reached "unsustainable levels" and is seeking exceptional 
assistance from its donors. Already, the World Bank and the Asian 
Development Bank, along with the IMF, are extending some loans.

The bank said additional debt relief was crucial for Pakistan.

"But further assistance from the IMF, which is scheduled to be 
provided in the later half of 2001 in the form of a Poverty 
Reduction and Growth Facility loan, depends on the progress of the 
government's structural reforms, including trade liberalisation 
measures to boost foreign exchange earnings," it added.

The report said gross official reserves fell by nearly half from 
$1.7 billion in 1999 to less than $1 billion in 2000, or about four 
weeks worth of imports of goods and services.

"The economy's foreign exchange requirements are still large and 
further debt relief is critical," it said.

Due to an extended period of poor economic performance, poverty had 
soared from below 18 per cent of the population in 1998 to more 
than 32 per cent in 1999, it added.

"Longer term, additional reforms to reduce the fiscal deficit or to 
increase government capacity to facilitate social development is 
essential," it said.

"The economy is in a slump and at the same time the policies that 
have to be followed are contractional, reducing the fiscal 
deficit," Naved Hamid, senior economic adviser for the Pakistan 
mission of the ADB, said.

"But unfortunately that is the reality. When it would have been 
easier to do it, it wasn't done. Now there doesn't seem to be any 
way out," he told a news conference following the release the 
bank's annual development outlook for Asia.

ADB officials acknowledged the restructuring was painful but said 
they were confident that whatever government emerged after the end 
of military rule, promised for late 2002, would stick to the 

Hamid said if reforms are carried through noting previous Pakistani 
governments had failed to honour commitments the country could find 
itself growing fast enough to handle its debt problems in five 

Pakistan faces a huge debt burden about $37 billion foreign debt 
and similar levels of domestic debt which the government says has 
reached "unsustainable levels".

But the ADB report warned that further IMF assistance depended on 
carrying out structural reforms, including trade liberalization to 
boost foreign exchange earnings.-Reuters/ AFP

Morocco for joint business council: Youssoufi visits FPCCI
By Aamir Shafaat Khan

KARACHI, April 18: Prime Minister of Morocco, Abderrahman Youssoufi 
has stressed the need for setting up a joint Pakistan-Morocco 
business council as an instrument to work regularly in a 
complementary framework
in translating the objectives of businessmen into real projects.

Addressing the members of the Federation of Pakistan Chambers of 
Commerce and Industry (FPCCI) at the Federation House on Wednesday, 
he said it was the right time to set up the council in view of the 
vital role of the private sector in activating the productive 
mechanism and encouraging trade exchanges between the two 

Our two countries, he said, possessed great human and material 
potentials and our companies and institutions enjoyed expertise and 
technical know-how which had enabled them to rival the 
international companies in several specialities.

The Moroccan prime minister invited the businessmen of the two 
countries to explore the existing opportunities in several sectors 
so as to raise the volume of bilateral trade and consolidate 
economic relations, which had remained below the level of our 
political relations, our aspirations and common objectives.

He also invited the Pakistani companies to explore the Moroccan 
market by participating in the international bidding and the 
exhibitions organized in the kingdom to promote their products or 
through the establishment of a co-operation partnership with their 
Moroccan counterparts.

Abderrahman said that both the countries shared a common destiny in 
facing the challenges and constraints of the globalisation process. 

He said that emergence of the so-called "new economy" based on 
information technologies gave, in this equation, prior advance to 
the rich north over the poor south whose most countries still 
suffered from their prevailing indebtedness and their chronic 
economic and social hardships. 

The eventual inability of these countries to cope with this new 
element might lead to their marginalization and exclusion, he 

He said political and economic stability and its geographical 
proximity to the EU countries had made Morocco to become one of the 
most attracting poles for foreign investments in North Africa and 
the Mediterranean region.

Earlier, the Moroccan prime minister, accompanied by a high-powered 
delegation, also visited the headquarter of the Islamic Chamber of 
Commerce and Industry (ICCI). 

ICCI's secretary general, Aqeel A. Al-Jassem, informed the 
delegation that the forthcoming eighth private-sector meeting of 
the ICCI would be held in Guinea from October 9 to 11.

IBRD team wants sugar industry relocation
By Our Staff Reporter

KARACHI, April 18: By bringing down the cost of production of 
sugarcane, the industry which started as an apparatus of import 
substitution could now become an engine of export-based growth.

These observations were made by the Pakistan Sugar Mills 
Association Sindh zone representatives in a meeting with a team of 
World Bank officials, on Wednesday.

However, the WB officials opined that the sugar industry, by its 
current cost structure, and assessing the need for cultivation of 
crops other than cane, did seem quite suitable for Pakistan.

They suggested that at least its relocation, besides more concerted 
efforts, were overdue to give a shot in policy and performance to 
prove its economic utility and viability.

Responding to the WB officials' observations the PSMA-SZ 
representatives explained that the role of sugar industry as the 
sole catalyst of rural transformation due to its locational 
imperatives has not been precisely understood by the economists in 
the country and similar seems to be the case with, even the World 
Bank experts.

The sugar industry, it was explained, provides direct and indirect 
employment to about 1.350 million persons majority of it hailing 
from the rural land mass. Sugar industry brings urban, rural divide 
closer by giving socio-economic sectoral upliftment to otherwise, 
the ignored agricultural hinterland of Pakistan.

Despite distinct deterrent of inadequate sugarcane supply, they 
said the industry per annum on an average was generating Rs71 
billion of revenues in the gross domestic product, with Rs37 
billion directly flowing in the form of cane price to the farmers.

Similarly, they said that the state exchequer was getting Rs6 
billion in form of sales tax alone from sugar, an essential food 
item which merit to be exempted. Sugar industry's value addition 
was worth Rs34 billion and it carries 2.5 per cent weightage in 
GDP, 15.8 per cent in manufacturing and 3.8 per cent in employment.

The PSMA-SZ further pointed out that the potential held by the 
industry was to double its current contribution, provided 
sufficient sugarcane supplies were lined up for processing.

Without putting any additional rupee as further fixed capital 
outlay, this industry possessed capacity to crush 62 million tons 
of cane a season just in 160 days and fetch 5.30 million tons of 
sugar at a prevalent low average of 8.7 per cent recovery. With 
recovery improved by 9 to 11 per cent sugar production could be 
raised to 5.58 to 6.82 million tons.

Therefore, they said the focus of attention and efforts ought to be 
in the direction of better economic performance, with core area 
being reduction in the cost of production so that the industry 
could work as an engine of export-based growth.

CCOP okays sale of 10pc National Bank of Pakistan shares
By Ihtashamul Haque

ISLAMABAD, April 17: The Cabinet Committee on Privatization (CCOP) 
here on Tuesday approved the disinvestment of 10 per cent shares of 
the National Bank of Pakistan (NBP).

The meeting which was a chaired by the Minister for Finance Shaukat 
Aziz decided that Overseas Pakistanis would be offered incentives 
to take part in the privatization of 10 per cent shares of the NBP.

The objective of disinvesting 10 per cent shares of the NBP, the 
meeting was told, was to induct corporate culture, mobilize savings 
and broaden ownership.

The Privatization Commission has already announced the 
disinvestment of 5 per cent shares of the National Bank.

The officials of the PC when contacted said that Overseas 
Pakistanis will bid for the NBP by offering to pay in foreign 
exchange and that was why they would be encouraged to participate 
in the this public offering.

"There will be more privatization and offering pubic shares to the 
overseas Pakistanis in various other state enterprises including 
nationalized commercial banks (NCBs) and the development financial 
institutions (DFIs)", a source said. He added the special 
instructions had been issued to the Privatization Commission by 
Chief Executive Gen Pervez Musharraf to accord priority to 
disinvesting state sector to the overseas Pakistanis.

The CCOP also approved re-bidding of the machinery of Lasbela 
Textiles as the results of the first bidding were considered 

The meeting was told that an agreement for appointment of a 
Financial Advisor for Karachi Electric Supply Company (KESC) was 
expected to be finalized within this week. The Asian Development 
Bank (ADB) and the Privatization Commission would share the cost of 
the financial advisory services.

The ADB has already approved $250 million for the restructuring of 
the KESC to remove its 30 per cent losses and other undue 
administrative expenditures before its privatization.

CCOP advised the creation of enabling environments to facilitate 
the expeditious privatization of Fisalabad Electricity Supply 
Company (FESC).

It authorized the financial institutions holding shares in Pakistan 
Industrial Credit & Investment Corporation (PICIC) to divest their 
respective shares in their best interest.

Sources said the meeting could not decide to return money to the 
buyers of Federal Lodges 1 to 4 in Murree. These lodges had been be 
disinvested to the buyers but they were handed over to him. 
Minister for privatization was present during the meeting. The 
representatives of respective ministries and departments also 
attended the meeting.

SBP sells bonds worth Rs11.2billion 
By Mohiuddin Aazim

KARACHI, April 17: The State Bank on Tuesday raised Rs11.24billion 
long term funds through sale of Pakistan Investment against the 
pre-auction target of Rs12.5billion. 
In the last auction held on February 13 SBP had raised Rs15.5bn by 
selling these bonds-almost double the target of Rs8billion.

Bankers say what has dampened the demand for these bonds is the 
fact that the money market has become tighter and the yield on 
Treasury Bills has risen sharply since February 13. The market was 
tight of liquidity also on Tuesday and banks to borrow about Rs2bn 
from SBP overnight.

"The corporate purchased about Rs9bn worth of bonds. The rest were 
consumed by some local private and foreign banks," said treasurer 
of a leading bank. The bonds that offer 12.5% return for three-
year; 13% for five year and 14% for ten year are no more as 
lucrative for fund managers as they were two months ago. That 
explains why Tuesday auction could not attract more of corporate 
bids for the bonds.

In contrast the same thing attracted the interest of banks in these 
bonds. Bankers said since corporate had started feeling that the 
return on the bonds should be higher than the present levels they 
are willing to buy the same on discount and not at par or above par 
value. And since the State Bank is not ready to sell these bonds on 
discount such corporate look towards smaller banks. These banks buy 
the bonds at par or above par value from primary dealers or 
designated banks and sell the same on discount to the corporate. 
The same thing happened on Tuesday.

>From amongst the corporate fund managers that bought the bonds 
directly from primary dealers State Life Insurance Corporation was 
on the top of the list. Others were Pakistan Telecommunication, 
Workers Welfare Fund of the federal government, National Insurance 
Corporation, Karachi Port Trust, Employees Old Age Benefit 
Institution and National Fertilizer Corporation. Banker said State 
Life alone bought Rs2.5bn worth of bonds.

The auction of bonds had generated bids worth Rs13.2bn of which SBP 
accepted bids worth Rs11.2bn and scrapped the rest. SBP said it 
sold Rs534m three-year bonds at a little above-par value (four 
paisa premium on each one hundred rupee of bonds). The central bank 
sold Rs1.12bn worth of five-year bonds and Rs9.58bn worth of ten 
year bonds at par value.

Since the government borrowing through Pakistan Investment Bonds is 
treated as non-bank borrowing the sale of Rs11.24bn worth of PIBs 
on Tuesday means the government would be able to cut its bank 
borrowing without getting into trouble.

Exporters assured financial assistance
By Parvaiz Ishfaq Rana

KARACHI, April 16: The State Bank will extend all sort of 
assistance for the promotion of exports and if needed it will 
evolve new method also, to compensate concessional financing of 
export trade.

This assurance was given by the chief manager credit SBP Liquat 
Durrani to the participants of a meeting of Credit Advisory 
Committee of SBP held here on Monday.

Sources privy to the meeting said that the SBP chief was all-out in 
support to export sector on credit and said the central bank would 
not hesitate in obliging exporters for making their products 
competitive in the world market.

A participant quoted the SBP official as having said, "the central 
bank will look into the matter industry-wise for extending export 
finance" and assured the participants of removing all irritants 
hurting or creating problems in various export sectors.

Business representatives in the meeting, however, strongly agitated 
over the prevailing high mark-up rates and the unwillingness of the 
nationalized commercial banks (NCBs) in providing the urgently 
needed funds for the process of balancing, modernization and 
replacement (BMR) of textile industry.

"Mark-up rates are being globally slashed for providing an impetus 
to the slow moving economies of the industrialized countries," he 
said adding "but the measures being taken in our country are 
further dampening the investment climate."

The APTMA representative complained about the non-availability of 
funds from the banks required for BMR purpose by the textile 
industry, ahead of removal of quotas by the year 2004.

"Only those companies having good financial health are being 
obliged by the banks, while the while the remaining 80 per cent of 
units are being deprived of the much-needed funds to compete in 
free world markets," he asserted.

Responding to the complaint, the State Bank official asked the 
FPCCI and the APTMA to form a joint body which could submit 
proposals and guidelines to overcome the problem.

The issues of non-payment of sales tax and rebates also came up for 
discussion in the meeting. Business leaders claimed that over Rs10 
billion were presently stuck-up with the CBR, creating liquidity 
problem for trade and industry.

There was a strong demand from the business leaders that the banks 
should be asked to adjust such held-up funds against government 
dues after getting them verified from their respective authorities. 

However, the SBP credit chief asked the representatives of banks to 
maximise their efforts for the promotion of Information Technology 
(IT) and suggested that all banks should hire the services of IT 
experts so that any proposal coming for funding of IT could be 
vetted by them.

The SBP official informed the participants that suggestions with 
regard to export finance had been sought from the FPCCI and other 
trade bodies but no replies had yet been received except from the 
tanners association. A number of other matters also came up for 
discussion but much of the concentration remained around mark-up, 
funding needs for BMR of textile industry and the IT industry.

Without directly giving approval to the proposals submitted by 
construction industry, the SBP official said that the central bank 
would carry out a study in this regard in consultation with the 
commercial banks.

Foreign banks focus on consumer banking
By Jawaid Bokhari

KARACHI, April 16: Hit by freezing of foreign currency accounts and 
low- profile support from their head offices, some large foreign 
banks have re-positioned their business.
Their focus is now on mobilization of rupee deposits and risky but 
more profitable consumer banking.

Sources said marginal improvement in the economic situation is now 
encouraging them into new avenues of business. Some of them are 
venturing into middle market (for raising deposits) that has been 
the preserve of the local peers, a deviation from corporate and 
consumer banking, the upper and the lower segments. They are 
extending their operations to cash management business and 
investment advisory services, including acquisition and mergers.

So far the banks have had clearly defined market niches. The NCBs 
and privatized banks catered to the government and deposits from 
public sector units. Foreign banks' business focussed on corporate 
clients (MNCs) and high net individuals and the public and private 
sector banks catered to the large domestic market, including the 
middle market.

With the loss of dollar deposits, after the freezing of FCAs in May 
1998, the foreign banks became wary of the general economic 
environment. They also complained that the effective rate of 
taxation was very high. Income tax authorities do not accept what 
the State Bank prescribes in respect of the non-performing loans.

Some foreign banks left the market and some downsized their 
operations. In the face of intense competition among 49 commercial 
banks, operating in Pakistan, foreign banks appeared, for sometime, 
to have left the field open to the nationalized and privatized 
banks. The professionals from the foreign banks, who then headed 
the NCBs were able to attract accounts of multinationals primarily 
because of their large deposit base and their ability to lend big 
sums of money.

The situation is changing now. With exposure to crisis ridden NCBs, 
some professionals, back in foreign banks, are much more wiser to 
handle the ground realities. Their quality of management has 
improved. Foreign banks, which have the advantage of global reach, 
professional management and sophisticated technological system, are 
making efforts to dip deeper into the domestic market, local 
deposits, consumer banking and the middle market. They are not 
currently banking much on financial support of their head offices. 
They are also entering into alliances with local banks and firms to 
expand business.

Some foreign banks have improved their performance by cutting what 
they described cost of credit. Non-performing loans are down. So 
are the provisions for bad debt. The recovery is faster. They are 
not harassed by the accountability process, which is haunting 
decision-makers in the public sector banks. Recovery of loans is 
managed on give and take basis. No nationalized bank's official is 
willing to take risks and debts are mounting.

The improved performance of leading foreign banks is perhaps more 
evident in case of the turnaround in Citibank. Heavily dependent on 
foreign currency, it suffered losses when the FCAs were frozen. But 
the bank doubled its operating profits from just over Rs500 million 
in 1999 to Rs1.037 billion in year 2000. Citibank's country head 
Zubyr Soomro says 97 per cent of the two years' earnings were paid 
as taxes. Expenses were reduced by Rs70 million, cost of credit 
(provisions for bad debts) were cut by Rs150 million and fee income 
went up by Rs140 million. Loans were at the same level for the two 
years, but returns improved. The Citi demonstrated great skill in 
switching over from its heavy dependence on foreign currency 
accounts to local currency deposits. From 13 per cent of the total 
deposits in 1997, the local currency deposits soared to 68 per cent 
in 2000.

Not all-foreign banks have done so well in 2000 as Citibank. Others 
have fared badly. To develop synergy between consumer and corporate 
banking, Zubyr Soomro, as country head of the Citibank, has now 
been made responsible for the development of both branches of 
business. So far, the corporate and consumer banking, worked 
separately under two autonomous divisions. As president of the 
Pakistan Banks Association, he organises monthly meeting of bankers 
(both foreign and local) to exchange views on macro-economic and 
banking issues. Zubyr says the UBL experience has made him much 

Citibank has entered into new business. The bank advises the KESC 
on cash management, processes one billion bills and helps the 
company in back office work. Through management information 
systems, it locates where the money is blocked and how can these 
funds be used more efficiently. Cost of idle money is reduced. Sui 
Northern also avails the bank's services.

The bank undertakes review of its big corporate groups and offers 
advice on restructuring, identifies strategies and areas of 
investment potentials to suit specific need. It looks at 
possibilities of acquisition and mergers and facilitates deals. 
Zubyr says a major acquisition by Dewan group recently was the 
outcome of the bank's efforts.

He told Dawn that the appetite for project financing has improved a 
little since there is a quicker court decision in loan default 
cases and because the economy is showing marginal improvement. He 
revealed that his bank was the market leader for credit cards. It 
has 56 per cent share of the market in credit card business and 22 
per cent in the car leasing. 

Drought will cause $2bn loss: Shaukat outlines remedial strategy
By Sabihuddin Ghausi

KARACHI, April 15: The national economy is estimated to suffer a 
loss of $2 billion due to drought and water shortage, the federal 
minister for fiance, Shaukat Aziz, told a press conference here on 
Sunday. The Governor of State Bank of Pakistan, Dr Ishrat Hussain, 
and senior official Waqar Masood also spoke on the occasion along 
with the finance minister.

They focussed mainly on the issue of remittances from overseas 
Pakistanis and spelt out a few proposed measures to attract 
investment and regulate the mechanism of foreign exchange flow.

In reply to a question on the current situation, the minister 
explained that a loss of one billion dollar had been estimated on 
account of increase in the import bill for furnace oil for thermal 
power generation, as lowering of river water levels had reduced the 
hydel power generation capacity.

Import bill may also be a little higher if wheat crop in final 
estimate is found less than the domestic requirement.

Adding to this loss is the loss of one billion dollars, to be 
suffered on account of production losses of the crops, which would 
affect the country's export potential. The balance of payment would 
come under the impact of a double-edge sword - higher import bills 
and lesser exports.

Shaukat Aziz said drought and water situation in the country was 
serious but added that the impact might not prove to be as 
disastrous as was being perceived now.

He said the cotton crop was not that bad and wheat crop was being 
estimated around 18 million tons which if added with carryover 
stocks of the last season should be sufficient to meet the domestic 

A clear picture of the national economy, he said, would emerge at 
the end of the quarter, sometimes in June, when an IMF mission will 
visit for a review of the performance. By then, the size of all the 
Kharif and Rabi crops would have been assessed. However, growth in 
the national economy is now being assessed between 3.5 to 4 per 
cent from the original projection of 4.5 per cent.

Earlier at the outset, Mr Aziz spelt out the reform measures 
proposed by a Task Force on the overseas Pakistanis on which the 
chief executive was briefed last Friday.

Stating that total income of all the overseas Pakistanis was being 
estimated equal to total gross domestic production of the country 
$60 billion the need is to harness this source.

He said two ordinances are being promulgated to restore confidence 
of the overseas Pakistanis. One of the two ordinances will 
guarantee the depositors from any freezing of the foreign currency 
deposits in the future. The second will suggest punitive action 
against any government agency that will probe the inflow of the 
foreign investment in Pakistan. This will prevent and preempt any 
harassment to the prospective investors by any government agency.

As the country will move towards opening up of the capital account, 
he said, steps will be taken to gradually convert money exchangers 
into exchange companies. At the same time the framework within 
which these companies will work will be further strengthened. All 
transactions - inflow and outflow of foreign exchange - of the 
exchange companies will be documented and each of these companies 
will have to open an account with a bank.

Export of all the foreign currencies will be allowed only through 
the National Bank of Pakistan

The SBP Governor, Dr Ishrat Hussain, said the capacity of the 
central bank to monitor and regulate the operations of money 
exchangers was being strengthened.

"The idea is to bring the official and kerb rate of currencies at 
the same level," the finance minister said.

Mr Aziz said the task force, which included six bankers, had 
divided the overseas Pakistanis into three broad categories and 
measures to attract remittances and investment for each of these 
categories had been suggested.

The first and the biggest category of expatriates was the workers 
who had been promised facilitation and free counselling on travel 
issues if each of them remit at least $2,500 a year.

The State Bank in active consultation with the State Life Insurance 
Corporation and the banks is working out special insurance schemes 
for the overseas Pakistani workers.

Professionals and white-collar workers abroad are the second 
category for which the Task Force has set a target of $10,000 
remittance a year.

The National Investment Trust and other state-controlled 
institutions and private banks have been advised to prepare special 
investment instruments and products for the overseas Pakistanis.

Pakistani businessmen and traders in foreign countries have also 
been targeted for which the Board of Investment has been asked to 
prepare a strategy.

The finance minister and the State Bank governor said that 
remittances in the current fiscal year were showing a 20 per cent 
growth which was very encouraging.

Responding to a question, he said banks mobilising foreign deposits 
had been given the freedom to invest anywhere after putting 25 per 
cent as reserve. The State Bank has given guidelines to the banks 
for investment of foreign deposits which forbid them to invest in 
junk bonds or exotic currencies.

Both the finance minister and the State Bank governor were 
confident of greater inflow of direct foreign investment in future 
as contracts have been signed between the Pakistani companies and 
foreign corporations in oil and gas sector and information 

Mr Aziz said the government expected foreign investment in 
privatization and in agriculture when it was corporatized.

Demand for farm credit increases
By Sabihuddin Ghausi

KARACHI, April 14: Beset with liquidity problems and difficulty in 
recovery of the stuck up loans, all the major banks are reporting a 
substantial increase in demand for the farm credits.

This mounting demand for farm credit comes in the wake of a 
significant cut in areas being brought under cultivation in both 
kharif and rabi, this season.

Sketchy reports appearing in the national press show that wheat 
acreage has already been cut by 30 per cent in Sindh and 16 per 
cent in Balochistan. Two Sindh ministers announced on Friday a cut 
of 20 per cent to 35 per cent in various kharif crops.

By and large, the farmers in other provinces and particularly those 
living in the barani areas in Punjab and kutcha areas in Sindh have 
also been forced to keep a substantial chunk of their holdings 
uncultivated, because of water shortage.

However, the rendering of large tracts of agricultural land 
uncultivated during rabi and kharif this year has not reduced the 
demand for bank credit. Instead, there seems to be a significant 
rise in demand for bank loans by the farmers.

For bankers, the problem is that the State Bank of Pakistan, at the 
beginning of the current fiscal set a negative farm credit 
distribution target for entire 2000-01 at Rs729 million. All the 
banks, particularly the ADBP, were expected to focus entirely on 
recovering the outstanding loans rather than on disbursement.

All these banks that include the ADBP, the five major commercial 
banks and the federal cooperative bank, were asked to recover 
Rs49.99 billion and disburse Rs49.26 billion in the current fiscal 

With a bad loan portfolio of more than Rs45 billion and groaning 
under a heavy administrative cost, the ADBP was asked to recover 
Rs35.70 billion in the current fiscal year. From this recovery, the 
ADBP was asked to disburse loans amounting to Rs31.25 billion among 
the farmers and pay back Rs1.2 billion to the State Bank from the 
expected surplus of Rs4.45 billion.

The five major commercial banks were asked to disburse as total of 
Rs11.94 billion. But these banks are also expected to recover a 
total of Rs9.57 billion leaving a net disbursement figure of Rs2.37 

The FCB, which receives funds from the State Bank at 0.5 per cent, 
now operates only in Punjab and NWFP through their respective 
provincial cooperative banks. It was given a task to disburse 
Rs6.07 billion and recover Rs4.72 billion. The net disbursement 
therefore comes to Rs1.35 billion.

Water shortage and persisting drought conditions have obviously 
affected recoveries of stuck up loans and hence the liquidity of 
all the banks including the ADBP, which are finding pretty hard to 
meet the rising demand of the farmers.

Bankers attribute two factors for this sudden spurt in demand of 
farm credit. First is the government announcement of providing a 
development loan for tubewells at a concessional rate of seven per 

Second factor is the State Bank decision to increase the production 
cost per acre of various crops by 50 per cent and above for purpose 
of sanctioning production loans to the farmers.

The production cost of cotton is now being calculated at Rs6,000 an 
acre as against Rs4,000, wheat Rs4,000 as against Rs2,500, 
sugarcane Rs8,000 from Rs5,000 and paddy Rs4,500 from Rs2,500.

 But, in face of this mounting demand, all the major banks, have by 
and large maintained the last fiscal year's level of disbursement 
of the farm loans in the first eight months of the year 2000-01.

A total amount of Rs25.63 billion credit was offered to the farmers 
in first eight months of the current fiscal, which by and large 
matches Rs25.59 billion credit disbursed among the farmers in same 
period of the last fiscal year.

More than Rs20 billion was given for the production purposes and 
Rs5.56 billion was disbursed among the farmers for development 
during July to February, this fiscal.

The ADBP remains the single largest lending agency with a 
disbursement of Rs17.20 billion that included Rs12.28 billion 
production and Rs4.92 billion development loan.

All the five major commercial banks have offered in first eight 
months of this fiscal, total loans of Rs8.24 billion. Of these 
five, the Habib Bank and the Muslim Commercial Bank were reported 
to be maintaining over 70 per cent recovery ratio. The other three 
banks maintained a 60 per cent plus recovery ratio. But these banks 
are also not happy with the current recovery position.

Back to the top
Flotsam and Jetsam    
Ardeshir Cowasjee

DEMAGOGUES: Sardar Farooq Ahmad Khan Leghari, president from 
November 14, 1993, to December 2, 1997; Benazir Bhutto, prime 
minister from December 2, 1988 to August 6, 1990, and October 19, 
1993, to November 5, 1996; Nawaz Sharif, prime minister from 
November 6, 1990, to July 18, 1993, and February 17, 1997, to 
October 12, 1999; Asif Zardari, united in wedlock with Benazir 
Bhutto since 1987.

Judges: Chief Justice of Pakistan Sajjad Ali Shah, appointed June 
5, 1994, forced to proceed on leave December 2, 1997, officially 
retired February 16, 1998. On the other side of the divide: the 
Quetta bench of the Supreme Court, November 1997; Justices Irshad 
Hassan Khan, Nasir Aslam Zahid, Khalilur Rehman Khan; the Peshawar 
bench of the Supreme Court, November 1997: Justices Saeeduzzaman 
Siddiqui and Fazal Illahi Khan.

Excerpts from the transcript of a publicly recorded tape at Hameed 
Maker's 'Helpline' Seminar in Karachi on March 19, 2001: a 
question-answer session with Sardar Farooq Ahmad Khan Leghari who 
now, when asked whether he considers he might be a 'solution' to 
our problems, considers that he "could be one", ignoring the fact 
that certain of the present problems are of his making.

"Our politicians come in through the democratic process, then dig 
their own graves and that of the democratic system......

"The response of the two political parties [PPP and PML] to the 
issues of governance are identical. Their main concern has been how 
to subjugate the judiciary and do away with due process of law and 
the rule of law. The confessions made by both leaders as to why 
they were doing so were identical.

"In 1996, whilst waiting for the verdict in the Judges Case, 
Benazir was sitting with me anticipating the Supreme Court order. 
When it came she called her legal advisers, Yahya Bakhtiar being 
one, and asked for advice. She then told me that I must denotify 
the Chief Justice [Sajjad Ali Shah]. When I said 'no', she then 
said I must send his case to the Supreme Judicial Council. I said 
'no' again...

"She came to the presidency and was very distraught and on the 
verge of weeping. 'Farooq Bhai, you are throwing me to the wolves. 
You don9t know these judges of the Supreme Court. They will do to 
Asif and me what the Indian Supreme Court is doing to Narasimha 
Rao.' Then there was a lot of weeping and hysterical crying, even 
while a presidency servant brought tea. I was embarrassed and very 
sorry that things should have come to such a pass.

"But she cooled down after a while. I reminded her that she was 
with me when the Indian High Commissioner told us they had a lot of 
material against Narasimha Rao. I asked her, 'Is there any material 
against you and Asif?' She got upset and said 'no, there is no 
material'. 'Then why worry?' I asked. 'Surely the Supreme Court 
cannot write judgments out of the air'...

"Both Benazir and Nawaz Sharif had the fear that an independent 
judiciary might hold a prime minister accountable and throw him or 
her out.

"Exactly one year and three months later [October 16, 1997] there 
was almost a repeat performance on the same issue. The demand was 
identical. Denotify the Chief Justice of Pakistan [Sajjad Ali 
Shah]. Prime Minister Nawaz Sharif came to see me and brought with 
him Shahid Hamid, his governor of Punjab and my friend who had been 
won over and was advocating the case of the prime minister. 'Why 
don't you denotify the Chief Justice?' he said, 'the time has come 
to get rid of him'. 'Shahid,' I asked him, 'did you not tell the 
prime minister what my answer to Benazir was to the same question'? 
'Well,' said Shahid, 'times have changed. The judiciary was united 
then, now it is divided, so we can do it.'

'Yes,' I said, 'we can violate the constitution and do what we like 
with the political system.'

"This reflects the mind of the ruling elite, their supporters, 
henchmen, yes-men.

"Their second demand was again the same: 'We have a file on the 
Chief Justice and can send his case to the Supreme Judicial 

"Both had the desire to bring the judiciary to heel and have it 
under the sole control of the prime minister.

"When Nawaz Sharif let my Ehtesab laws lapse I asked him why. He 
said that his 'friends' did not like it. He did not specify which 
friends. Neither did he realize that he himself came under the 
mischief of those laws.

"Benazir came to see me two days after Murtaza9s soyem, on 
September 26, 1996, to apologize for having made remarks about me 
on TV and having lied. She had imputed that I had a hand in the 

"Aftab Sherpao had rung me telling me she was upset and wished to 
come to see me and apologize..... I told Sherpao that every PPP 
leader and he himself knows who killed Murtaza.

"The behaviour pattern of Benazir, Nawaz and Shahbaz and the rest 
is the same. All political parties have developed extreme fascist 
tendencies and the root cause for this is their scant regard for 
the supremacy of the rule of law. Prime ministers want judges of 
their own, irrespective of merit. They want judges who will do 
their bidding and not the bidding of the law. They do not want 
level playing fields lest anyone question the authority of the 
fascist leaders.

"Karamat [General Jehangir Karamat, COAS] had to follow the 
Constitution when he acted as he did. But the Constitution is not 
very clear on what he should have done and what were the limits of 
his powers. I should have thought that when he was inducted as a 
go-between [for] the Chief Justice and the prime minister by the 
prime minister himself, Karamat could have put four men in SSG 
fatigues to guard the Supreme Court and maybe the attack [storming 
of the court on November 28, 1997] would not have occurred.

"What must be understood is Nawaz's and his group's consistent and 
persistent effort to conquer all other centres of power.

"I used Article 58(2)(b) once but when I got a second opportunity 
to use it I did not. The antics of both Benazir and Nawaz, and the 
way they have played around with the law and the Constitution, 
makes it necessary to have Article 58(2)(b) in order to maintain a 
balance of power.

"When I decided in my mind to leave the whole bunch of politicians, 
both parties [PPP and PML] had become the same; they had the same 
political culture.

"On the night of 27/28 November 1997 [the Supreme Court was stormed 
on the 28th] the prime minister [Nawaz Sharif] came to the 
presidency bringing with him the army chief [General Jehangir 
Karamat], the head of the ISI [Lt- General Nasim Rana], the speaker 
of the National Assembly [Ilahi Bakhsh Soomro] and the law minister 
[Khalid Anwer]. They pleaded with me until morning. All they wanted 
me to do in the light of the orders of the Quetta and Peshawar 
Supreme Court benches was to sign on the advice of the prime 
minister to appoint Ajmal Mian as Chief Justice of Pakistan. That's 
all. The advice was binding on me under the Constitution. When I 
refused and offered to resign to resolve the crisis that had been 
gripping the country for four months, I narrated to them point by 
point how the crisis came about, and in the presence of all of them 
proved that it was of the prime minister's making and not that of 
the Chief Justice.

"But I told them, 'I have the solution. I will resign', Ilahi 
Bakhsh Soomro said 'Why should you resign for a half-mad Sindhi 
judge who is going to retire in three months anyway?' He used that 
exact term - half-mad. Then the prime minister chipped in and asked 
me why should I pay such a heavy price for a judge who is retiring 
in three months.

"'I will resign,' I told them, 'because in my political parlance 
there is no buying or selling. Your culture and mine are different. 
I will resign and Mr Waseem Sajjad [chairman of the Senate] will 
have no moral compunctions [about] signing this document tomorrow. 
He will be acting president and he will do it.' It was two 
different political cultures at work."

A couple of weeks ago, a Urdu daily carried a statement reportedly 
made by Asif Zardari from his Attock prison cell. According to 
Asif, after he had helped Leghari become president, Leghari asked 
him, 'Koi hukam karo' (To hear is to obey, master). He claimed that 
Leghari had told him that he, Asif, was possessed of great 
qualities. Asif said he had forgiven Nawaz Sharif because he was a 
political rival, but he could not forgive Leghari because he had 
betrayed a friendship.

Flotsam and Jetsam have been jettisoned. The entire rotten lot 
should be disqualified and never again be allowed to reboard.

The come up pance of an upright man
By Ayaz Amir

THINGS never get dull in Pakistan, do they? What do we have now? 
The fates catching up with a pillar, nay a titan, of the judiciary: 
His Lordship Justice Qayyum of the Lahore High Court, whose 
dispensation of justice was such that any bemused onlooker could be 
forgiven for thinking he was the Sharif family's personal judge, 
settling matters, both private and state, to their complete 

The Sharifs' notions of government were intensely private: which is 
to say, have your own man at every key post. They began with 
commissioners and police DIGs, the dregs of both services pandering 
to their whims and enriching themselves in the process. Major 
Mushtaq of the Police Service who has finally been caught by NAB 
for becoming a real estate tycoon while in service was an 
outstanding example of this breed: doing as he was told and 
becoming an impressive man of property along the way.

But when Nawaz Sharif became Prime Minister the second time round 
the family's sights were set higher. They had whiz-kid younger 
brother running Punjab. They had their own man in the presidency. 
After Sajjad Ali Shah's arranged departure from the Supreme Court, 
they thought they had the apex court lined up in their favour. In 
the person of Justice Qayyum at the Lahore High Court they had the 
closest thing they could get to a personal judge. Division of 
family assets, balancing of huge bank loans against dummy 
collateral, tightening the noose around Asif Zardari and Benazir: 
the only judge who could handle these sensitive matters was Justice 

Only the army remained unsubdued. True, Nawaz Sharif had got 
General Jahangir Karamat to write out his resignation, an event 
which gave rise to the legend that after conquering other 
institutions he had humbled even the army. Still, this was not the 
same thing as having another Justice Qayyum as army chief. This is 
the significance of October 12: Nawaz Sharif in Hercules mode 
setting out to rectify this situation by removing Musharraf and 
putting a fellow Kashmiri from Lahore, Lt-Gen Ziauddin Butt, in his 
place. The scheme went awry because it was not thought through 
properly or because the army command had had enough and was in no 
mood to be pushed around.

Remember also that the army command was smarting from Kargil, a 
defining moment in the longstanding love affair between GHQ and the 
Sharifs (the Sharifs having been discovered and groomed for great 
things by General Zia himself, Lt-Gen Jillani, Lt-Gen Hamid Gul and 
a whole line of minor geniuses in ISI). A wounded tiger and wounded 
generals: the mood between them is about the same. Nawaz Sharif did 
not have a measure of this feeling. He was also surrounded by a 
school of bumpkins, the kind who act as cheerleaders to 
prizefighters. "Play it on the front foot" was their constant 
refrain. Mian Sahib played it on the front foot once too often and 
did not know what hit him.

What is that immortal line from Amir Khusrau? That the night of 
separation is as long as the tresses of my beloved. Of what 
duration are Nawaz Sharif's nights in the Holy Land? Arab 
hospitality is legendary but does it make up for time hanging heavy 
on your hands? Field Marshal Idi Amin, another distinguished exile 
in the Holy Land, has a better time of it. If envious rumour is to 
be believed, he can count on the company of nineteen wives and 
mistresses which is more fun than the occasional phone call to a 
second-ranking Muslim Leaguer deep in the Punjab boondocks or the 
occasional interview with a foreign radio service. Playing on the 
front foot: will not Nawaz Sharif be ruing the day he heard this 
accursed phrase?

But back to the judicial titan, Justice Qayyum, who has had some 
sharp strictures addressed to him in the detailed judgment of the 
Supreme Court in the Swiss commission case against Benazir Bhutto 
and Asif Zardari. The Supreme Court has knocked down their 
convictions and ordered a retrial of the case on the grounds that 
the hearing judge, Justice Qayyum, was biased, was linked closely 
to the Sharifs and therefore was the wrong man to sit in judgment 
on Bhutto and Zardari.

In the Qayyum tapes which detail conversations between Justice 
Qayyum and Nawaz Sharif's fox-hound, Saifur Rehman, nothing matches 
the echo of these words uttered by His Lordship: "By the grace of 
God this will be done (that is, the judgment against Bhutto and 
Zardari) and then both of us will go to him (Nawaz Sharif) and seek 
forgiveness." Forgiveness for what? For not being able to wrap up 
the case against Benazir and husband as quickly as Nawaz Sharif 

What are the Tehelka tapes when set against these resonant words? 
Fictitious arms deals and petty cash changing hands do not have 
half the colour of justice being prostituted in so brazen a manner.

I wish though that this display of independence by the Supreme 
Court had been more timely. In an earlier epoch the Supreme Court 
declared General Yahya Khan a usurper when his usurpation had 
already passed into the trashcan of history. Instances abound of 
the superior courts being guided by the pragmatism of 
circumstances. Here again we see an indictment of bias when the 
origin of the bias has dwindled to a single stately home in the 
Holy Land. No doubt because of the Supreme Court roster Benazir and 
Asif's appeal could not come up for hearing earlier. But what if 
the Mandate had survived? What if the climate was different? Is 
this idle speculation? Not if one looks at the vagaries of 
Pakistan's judicial history.

Benazir and the PPP are naturally elated although if they should be 
making any offerings it is to Justice Qayyum and Saifur Rehman who 
between them ensured that an open-and-shut case should thus be torn 
into shreds. Does any newspaper-reading man in Pakistan doubt 
Benazir's and Asif's guilt? Does anyone think they got no 
commission from the Swiss firm, SGS-Cotecna? Does anyone doubt the 
financial acumen of the then ruling couple who turned Islamabad 
into an open auction mart where every deal, no matter how 
outrageous, was on offer provided the right palms were greased?

But Saifur Rehman and his goons in the Accountability Bureau aimed 
not at justice but victimization. And because their hands were not 
clean retribution has knocked at their doors. The losers as always 
are the people of Pakistan. Of what matter to them if one set of 
looters is embarrassed while another set is distributing sweets 
over a form of judicial vindication?

It is the army which has to make up its mind. Can it do without 
political allies? Can it negotiate the turbulent waters of 
Pakistani politics all by itself? The history of coup making 
suggests it cannot. Sooner or later it will have to identify its 
principal enemy and make peace with the other combatants in the 
arena. In war the axis of advance should, ideally, be one. Multiple 
fronts, as every Hitler has discovered, are a recipe for disaster.

Is there anything to choose between the jokers of the Muslim League 
and the PPP? Conventional wisdom says there is not although a 
closer examination may yield a different answer.

The common factor between both parties is gangsterism and 
corruption. Shahbaz Sharif resembled nothing so much as a Mafioso 
don. What does Asif Zardari look like? In any Godfather sequel he 
can easily get a part. As for moneymaking it is hard to figure out 
who beat whom: the PPP leadership or the Muslim League? My own 
guess is the Sharifs were professionals: subtle about their money. 
Zardari left a trail, which goes all the way to Rock wood, French 
submarines, Amer Lodhi, and my favourite grand admiral, Mansur-ul-

As for evidence, was their evidence against Al Capone? Is there 
evidence against a single patwari or thanedar across the country? 
Thieves do not leave receipts or footprints except when they get 
careless. Zardari was careless or he would not have been caught out 
over Rock wood.

But if in all other respects the two representatives of the people 
are equal, in one important characteristic they differ. The Sharifs 
became a threat to the army, attempting to play politics with it. 
Except for the brief Sirohey episode during Benazir's first stint 
as prime minister, the PPP never tried to mess around with the 
army. In fact after each of her two dismissals Benazir took care to 
blame elements within the intelligence agencies and not the army as 
a whole for her troubles. Even now she is desperately waving an 
olive branch in General Musharraf's direction.

The army's political analysis therefore has all been wrong. Since 
Zia's time the prejudice which has never quite left the minds of 
senior generals is that somehow the PPP is a security risk. The 
facts speak otherwise.

General Beg and that sorry figure, Ghulam Ishaq Khan, trying to 
scatter obstacles across the PPP's path in 1988 by building up 
Sharif. Then one after the other receiving a kick from him. Leghari 
and General Karamat ousting Benazir in 1996 and thus ensuring the 
birth of the Heavy Mandate and the writing of their own obituaries. 
Why is Pakistan's political landscape littered with such fools?

But Musharraf says he will have nothing to do with either set of 
villains. His word would carry greater weight if his government had 
given a better account of itself since coming to power. Politicians 
cannot be banished through military orders. Ayub banished the pre-
1958 leaders only to give birth to the demons of separatism. Zia 
hounded the PPP only to have his nemesis, Benazir Bhutto, replace 
him when his end came.

The political field can be redrawn only through better performance. 
Ataturk swept aside the remnants of the Ottoman empire and created 
the Turkish Republic. De Gaulle opened a new era in French politics 
by laying the foundations of the Fifth Republic. But both were 
exceptional figures. If ambition must be tailored to capacity and 
performance, Musharraf and his generals will have to settle for 
lesser aims.

Pakistan wary of Sri Lankan backlash in final

SHARJAH (UAE), April 19: Pakistani captain Waqar Younis is wary of 
a Sri Lankan resurgence when the two Asian giants clash in the 
final of the Sharjah Cup tri-series here on Friday.

With four league wins in a row, Pakistan are the overwhelming 
favourites against their struggling rivals who lost three games, 
including an embarrassing defeat by outsiders New Zealand on 

Waqar, however, cautioned his team against taking victory for 
granted in the day-night final before an expected full house at the 
Sharjah cricket stadium.

"What happened in the league does not count, one-day cricket is all 
about playing well in those seven hours," Waqar said.

"We are very confident about the final, but Sri Lanka are a good 
side and will fancy their chances. We have to be on our toes all 
the time."

The tournament has thrown up so many surprises over the last two 
weeks that predicting the winner of the 50,000-dollar title on 
Friday will be foolhardy.

Full-strength Sri Lankans began as the favourites following their 
3-0 whitewash of England in the one-day series at home.

Pakistan, on the other hand, were in turmoil after a dismal tour of 
New Zealand in which they drew the Test series 1-1 and lost the 
one-dayers 3-2.

Pakistan came to Sharjah without a coach, a new captain and missing 
the services of top stars like Wasim Akram, Moin Khan, Azhar 
Mahmood and Shoaib Akhtar.

But riding on the experience of Saeed Anwar, Inzamam-ul-Haq and 
Waqar, the Pakistanis used their favourite hunting ground to 
regroup and return to winning in style.

New Zealander Matthew Sinclair may have been the top scorer of the 
league with 304 runs, but Anwar and Inzamam have been more 
effective in shaping Pakistan's four convincing wins.

Sri Lanka will be wary of Anwar, who smashed 90 and 88 against them 
in the league. The seasoned left-hander also scored 81 against New 

The fluent Inzamam showed why he is regarded as one of the most 
dangerous batsmen in world cricket by making 44 and 87 against the 
Sri Lankans and 71 and 85 against the Kiwis.

"We have to get Anwar and Inzamam early and not give them space to 
score," admitted Sri Lankan captain Sanath Jayasuriya.

"It's been a disappointing tournament so far for us, but it is up 
to the players to put aside the defeats and start afresh.

"We lost to Pakistan by 16 runs and 28 runs, which means the 
difference was not much. The important thing is to grab the chances 
that come our way."

Sri Lanka will be hoping that frontline batsman Marvan Atapattu 
gets back among the runs after a top score of 36 in the league.

Jayasuriya himself has not clicked at the top of the order except 
for a rollicking 107 against New Zealand in which he smashed a 
record-equalling 30 runs off an Chris Harris over.

Teams (from):

Pakistan: Waqar Younis (captain), Saeed Anwar, Shahid Afridi, Imran 
Nazir, Inzamam-ul-Haq, Younis Khan, Faisal Iqbal, Abdur Razzaq, 
Humayun Farhat, Saqlain Mushtaq, Shoaib Malik, Mohammad Sami, Yasir 
Arafat, Kashif Raza.

Sri Lanka: Sanath Jayasuriya (captain), Marvan Atapattu, Romesh 
Kaluwitharana, Mahela Jayawardena, Kumar Sangakkara, Russel Arnold, 
Kumar Dharmasena, Tillekeratne Dilshan, Chaminda Vaas, Muttiah 
Muralitharan, Indika de Saram, Thilan Samaraweera, Akalanka 
Ganegama, Nuwan Zoysa, Dilhara Fernando.-AFP

Moin and Rashid rival for wicket keeper's slot
By Our Sports Reporter

KARACHI, April 18: Former captains Moin Khan and Rashid Latif are 
vying for one wicket keeper's slot for next month's tour to England 
after the selectors finalized a 20-man provisional squad.

Highly placed sources confirmed that both the wicket keepers have 
been included in the list. But added that the final decision would 
be taken by the Pakistan Cricket Board (PCB) advisory council in 
consultation with skipper Waqar Younis. The squad will be named on 

Moin, 30, who lost his captaincy to Waqar Younis earlier this 
month, on Wednesday confirmed his fitness and availability for the 
England tour whereas Rashid, 32, who has been out of favours since 
1998, is already taking active part in the domestic competitions.

Interestingly, it were the previous tours to England in 1992 and 
1996 that changed the fortunes of the two wicket keepers.

In 1992, Rashid claimed the No 1 spot after Moin was dropped for 
the fifth Test while in 1996, Moin reclaimed the top slot after 
back trouble sidelined Rashid from the Leeds Test where he became 
the first wicket keeper in the last century to reach three figures.

"Since Pakistan will play two Tests in the first half of the tour, 
only one wicket keeper would go in a 16-man squad. Now its entirely 
up to the concerned authorities which wicket keeper they would 
choose," sources said.

Besides Moin, Wasim Akram, Azhar Mahmood and Yousuf Youhana have 
also confirmed their fitness. The foursome along with paceman 
Shoaib Akhtar and legspinner Mushtaq Ahmad have been named in the 
provisional squad.

Shoaib is due to return from Australia on Friday and is expected to 
inform about his fitness on Sunday.

However, there was no place for Ijaz Ahmad who had a splendid 1996 
tour to England but failed to deliver the goods in New Zealand 
after being sent as replacement at a time when he was out of form 
and unfit.

Considering the unfavourable weather and pitch conditions which are 
likely to welcome Pakistan in the first half of English summer, 
Ijaz could have played a pivotal role in Pakistan's bid to keep 
their three-tour unbeaten record intact. In addition to this, 
Pakistan only has four middle-order batsmen out of which only two 
have the required experience of Test cricket.

The 20-man provisional squad is:

Saeed Anwar, Imran Farhat, Imran Nazir, Shahid Afridi (openers), 
Inzamam-ul-Haq (vice-captain), Faisal Iqbal, Younis Khan, Yousuf 
Youhana (middle-order batsmen), Moin Khan, Rashid Latif, Humayun 
Farhat (wicketkeepers), Abdur Razzaq, Azhar Mahmood (allrounders), 
Waqar Younis (captain), Wasim Akram, Mohammad Sami, Shoaib Akhtar 
(pacers), Saqlain Mushtaq, Mushtaq Ahmad, Shoaib Malik (spinners).

Pakistan put New Zealand where they belong

 SHARJAH, April 15: Saqlain Mushtaq and Abdur Razzaq shared seven 
wickets as Pakistan blew away New Zealand with a seven-wicket 
victory in the Sharjah Cup triangular series on Sunday. Off-spinner 
Saqlain ran through the lower order to finish with four for 17 
after seamer Razzaq removed the top three New Zealand batsmen to 
return three for 22.

Their combined efforts helped Pakistan bowl out New Zealand for 
just 127 in 31.1 of their 50 overs, the last six wickets tumbling 
for 21.

Only opener Chris Nevin offered some resistance to the charged-up 
Pakistan attack, scoring 50 off 40 balls with five fours.

Pakistan, who have completed their round-robin matches with four 
wins in as many matches, knocked off the required runs in 25.2 
overs as Inzamam-ul-Haq lashed 85 off 67 balls, with two sixes and 
12 fours.

The Pakistanis made a shaky start, losing Saeed Anwar and Iman 
Nazir with only 17 scored, but Inzamam put paid to New Zealand 
hopes of an upset victory.

Inzamam was in attacking mood, smashing off-spinner Brooke Walker 
for 18 in one over, as he surpassed Anwar as the leading run-getter 
in Sharjah.

When Inzamam, playing his 47th match in Sharjah, had scored 42 he 
beat Anwar's tally of 2,054 runs in this off-shore Gulf venue.

New Zealand, without a win in three matches, are as good as out of 
the tournament, though they still have one match against Sri Lanka 
on Tuesday.

However, even if they win that, their net run rate is so inferior 
to Sri Lanka's that they have little realistic chance of reaching 
the final.

The New Zealanders had started the game in a positive frame of 
mind, racing to 79 for two by the 12th over when Nevin hooked 
Razzaq straight Mohammed Sami, who took an excellent catch at fine 

New Zealand faltered after his dismissal, with Sami taking two 
quick wickets in the middle order and Saqlain, later named man of 
the match, polishing off the tail.-Reuters

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