------------------------------------------------------------------- DAWN WIRE SERVICE ------------------------------------------------------------------- Week Ending : 27 January 2001 Issue : 07/04 -------------------------------------------------------------------
Contents | National News | Business & Economy | Editorials & Features | Sports
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CONTENTS ===================================================================
NATIONAL NEWS + CE links peace to honour: Kashmir struggle can't be suppressed + CE calls for strong Pakistan Navy + Pakistan criticizes US missile programme + 15 killed, 108 injured in lower Sindh + Samjhota service extended for 3 years + Paris Club links more help to reforms + Indus River System Authority (IRSA) to iron out differences + Submarines may be equipped with Nuclear arms: PN chief + Extradition accord with Uzbekistan signed + Punjab demands Rs4 billion from provinces + Centre moves to resolve Balochistan, Sindh tiff on CJ + Sustained efforts in IT sector needed + Seven PML men get one-year RI + Pakistan declared poppy-free country + Benazir decides to return home in September --------------------------------- BUSINESS & ECONOMY + Islamabad seeks $2 billion from IMF + Asian Development Bank to give $42m for health facilities + Long-term funds at floating rates: Textile Vision 2005 + PTCL posts lower than expected profits + Tax rate on bank profit may be slashed to 43% + Call to boost textile exports + Strategy for attracting foreign investors + Change in management for sick units' revival + Dawood for emphasis on footwear exports: Leather Show opens + Hearing against NAB Ordinance on Feb 12 + US Court rejects Pakistan request over bank accounts + Subsidy on wheat to go by June + KSE directed to enforce reforms --------------------------------------- EDITORIALS & FEATURES + Shame Ardeshir Cowasjee + A glimpse of the future Ayaz Amir + Defying the popular will Irfan Husain ----------- SPORTS + Rs20m grant for Pakistan Hockey Federation + PCB's cash incentives + Malik appears before panel

CE links peace to honour: Kashmir struggle can't be suppressed

KARACHI, Jan 25: The chief executive, Gen Pervez Musharraf, has 
declared that Pakistan stands for peace in the region but a peace 
with honour and dignity.

This he stated while reviewing the 74th Midshipmen Commissioning 
Parade of the Pakistan Naval Academy on Thursday.

However, Gen Musharraf pointed out, the impediment to peace was the 
Kashmir dispute and "we cannot close our eyes to the plight of our 
Kashmiri brothers."

The spirit of freedom, he said, could no longer be throttled 
through brute force.

The CE told the parade that "you are a guarantor of peace and the 
protector of Pakistan's sovereignty and integrity."

He said the armed forces were a deterrent against any aggression 
and added that "more than material force the deterrent lies in your 
heart and your mind. Let no evil eye ever be cast on our 

Focusing on maritime activities, Gen Musharraf said: "The dynamics 
of the post-Cold War era have forced us to readjust our maritime 
perceptions; the present government has taken a decision to rapidly 
expand the maritime sector by enlarging Pakistan's merchant fleet, 
increasing the number of ports and investing in exploitation of 
sea-based resources".

In this context, he added, the merchant service was receiving 
additional incentives. Construction of a deep-water port at Gwadar 
had been planned, offshore exploration stepped up and effort was 
being made to boost fish export.

The CE said it was indeed very encouraging to know that Pakistan's 
achievements in defence production had proven their credentials to 
military delegations from various countries of the world in the 
recently-held international defence exhibition and seminar.-APP

CE calls for strong Pakistan Navy 

KARACHI, Jan 25: The chief executive, Gen Pervez Musharraf, said on 
Thursday that Pakistan's long coastline and its strategic location 
called for a strong Pakistan Navy and merchant navy to provide it 
with security and defence.

"Our sea trade routes and exclusive economic zone need to be 
guarded," the CE said, adding that if a strong navy was a pre-
requisite, a well-equipped and viable shipyard to meet the 
requirement of indigenously built vessels was also a necessity.

He was speaking as chief guest at a ceremony held at the Karachi 
Shipyard and Engineering Works in connection with the handing over 
of three tugs built by the shipyard for the PN.

Gen Musharraf observed that Karachi shipyard had all the 
capabilities to fulfil this requirement and, therefore, this 
strategic national industry should be revamped and modernized.

"We need a well-equipped and efficient shipyard as a strategic 
compulsion for our survival as a maritime nation," he declared.

He said it was distressing to know about the financial problems the 
KSEW was facing and the only reason was that there was not enough 
work for its core activity i.e. shipbuilding.

He called upon all concerned quarters to provide the most needed 
support and encouragement to the KSEW for its maximum utilization 
in playing its role in providing vessels for shipping and ports 

He pointed out that the government had already provided a remedy in 
the form of a directive to public sector maritime organizations for 
placing their shipbuilding and repairing orders on the KSEW.

"These directives should be implemented in letter and in spirit so 
that the main objectives of support to the KSEW are achieved."

He noted that the PN was striving hard to achieve self-reliance 
objectives of the government by indigenizing construction of tugs, 
missile craft, fast petrol boats and submarine with success.

Pakistan criticizes US missile programme

GENEVA, Jan 25: Pakistan warned on Thursday that a proposed US 
missile defence shield could heighten tensions between major powers 
and lead to a build-up of arsenals.

In a speech to the UN Conference on Disarmament, Foreign Secretary 
Inamul Haq said "most countries" remained unconvinced that 
deployment of a National Missile Defence would enhance security 

He backed thorough debate on the issue and urged the Geneva forum 
to launch global negotiations on a treaty which would ban weapons 
in outer space, the "province of all mankind".

Haq also called for reaching a peaceful solution with India to 
their long-standing dispute over Kashmir and for a halt to the 
"nuclear and conventional arms build-up in South Asia".

His remarks drew no response from the US disarmament delegation. 
But India's new disarmament ambassador Rakesh Sood took the floor 
to reaffirm New Delhi's commitment to dialogue on Kashmir, where a 
ceasefire was renewed this week.

The five official nuclear powers (Britain, China, France, Russia 
and the United States) and nuclear-capable Pakistan and India are 
among the 66 member states of the world's only multilateral 
disarmament negotiating forum.

Former US President Bill Clinton left a decision on whether to 
build and deploy the so-called "Son of Star Wars" - a system aimed 
at intercepting incoming missiles in space which has an estimated 
price tag of $60 billion - to his successor.

President George W. Bush has signalled he will proceed with the 
missile umbrella.

Haq sounded a warning against abrogating or watering down the 1972 
Anti-Ballistic Missile (ABM), a major strategic stability treaty 
between the United States and Russia which prevents deployment of 
ballistic missile defences.

"Most countries, and the international disarmament community, 
remain unconvinced that abrogation or amendment of the ABM Treaty 
and deployment of National Missile Defences are the advisable 
course to enhance international or national security," Haq told the 
Conference on Disarmament.-Reuters

15 killed, 108 injured in lower Sindh
Dawn Report

HYDERABAD, Jan 26: Fifteen people died and about 108 others were 
injured when a strong earthquake jolted the entire Sindh right from 
Karachi to Kashmor at 8:20am on Friday, write Aziz Malik and M.H. 

There was no record available about the victims in the Mirpurkhas 
division, but reports said that eight people died in the district - 
one each in Kunri, Jhuddo, Naukot, and Mirpurkhas and two each in 
Digri and Kot Ghulam Mohammad.

Reports of powerful jolts, destruction of houses, roads and trees 
were received from all over the Hyderabad and Mirpurkhas divisions 
with families coming out in the open to save their lives. Power 
supply in certain areas was disrupted.

The injured were brought to the civil hospital of Hyderabad from 
the districts of Badin, Mirpurkhas, Digri, Kunri and Kot Ghulam 

Five children, including a 15-day-old boy, were killed and scores 
of others, mostly schoolchildren, injured in the Hyderabad 

The tremor lasted for 30 seconds only, but people with their 
children ran out of their houses to take refuge in the open. The 
intensity of the earthquake was measured 6.5 on Richter scale.

Some of the people were still asleep when the tremors were felt and 
many a student, mostly girls, was injured in the stampede as they 
rushed out of their classrooms.

MIRPURKHAS: Five people were killed and 32 others injured when 
roofs and walls of various houses collapsed at different places 
owing to the earthquake, reports Qamruddin.

BADIN: People rushed out of their houses when the quake hit at 
8.18am. Three people died and 60 others were injured in the 
district, writes Mohammad Hashim Bhurgari.

KHIRPUIR: Tremors were felt in the district but no casualty was 
reported from any locality, writes Mansoor Meerani.

THATTA: Eighty-year-old Ladho Warayo died of cardiac arrest as the 
district was jolted, writes Iqbal Khwaja.

MITHI: Walls and roofs of hundreds of houses in the Tharparkar 
district either developed cracks or collapsed, reports Prem 

SUKKUR: A brief spell of earthquake in Sukkur, Larkana, Rohri, 
Jacobabad, Shikarpur, and Ghotki was felt. However, no loss of life 
was reported, reports Shamim Shamshi.

KARACHI: In Karachi, the earthquake was felt at 8.16am. According 
to the MET office, the city could experience aftershocks lasting 
several days as there always was a possibility of such a 
phenomenon. But, it added, it was not necessary.

LAHORE: A severe earthquake rocked Lahore and other parts of 
Punjab, terrifying people and making them run for safety, reports 
our Lahore Bureau.

Samjhota service extended for 3 years
Monitoring desk

NEW DELHI, Jan 21: India and Pakistan on Sunday agreed to extend 
the Samjhota Express train service between the two countries by 
another three years and upgrade the services by providing sleeper 
and economy class accommodation.

An agreement to this effect was signed between the delegations from 
both sides after a five-day deliberations to review the rail 
communications between the two countries. However, there was no 
mention about the Pakistani demand for extension of the train to 

The agreement, which will come to force with immediate effect, was 
signed by leader of Indian delegation, S S Bhandari, Additional 
Member (Traffic), Railway Board, and the Pakistani team leader, 
Abdul Qayyum, Additional General Manager (Freight), Pakistan 

The express will continue to run as a bi-weekly service. The 
Pakistani proposal for up to two extra coaches to clear heavy rush 
of passengers has been accepted.

Paris Club links more help to reforms
Ihtashamul Haque

ISLAMABAD, Jan 24: Paris Club has offered more assistance to 
Pakistan if it completes reforms in the economic and social 
sectors, Finance Minister Shaukat Aziz told Dawn by telephone on 
Wednesday from Paris.

"We assured them that the government is committed to restore true 
democracy in Pakistan and this went quite well with the creditors 
of the Paris Club", the minister asserted.

"You must complete the reform agenda and if you do so we will offer 
more support to Pakistan", the finance minister quoted the Club 
president as saying.

Mr Aziz said he had also briefed the Club about establishing of 
democracy at grass-roots level in Pakistan. I told them that the 
first phase of local governments elections had been over and the 
second phase would soon be started that would consequently set the 
tone to hold general elections, he added.

He said that the Paris Club had appreciated the government's 
efforts to promote good governance and transparency in its 
agreements with the foreign companies.

Mr Aziz said that he also told the participants of the meeting that 
Pakistan sought peaceful solution to all kinds of disputes in the 
world, including Kashmir.

The Paris Club restructured Pakistan's $1.8 billion debt to help 
overcome its balance of payment problems during the next ten 

"In fact Paris Club has expressed its confidence in the economy of 
Pakistan by rescheduling our over $1.8 billion debt", said the 

Indus River System Authority (IRSA) to iron out differences
Faraz Hashmi

ISLAMABAD, Jan 26: The inter-provincial dispute over the 
distribution of irrigation water will be taken up again by the 
Indus River System Authority on Saturday, a government official 

The authority, the source said, will consider the long-standing 
dispute and try to iron out differences between the provinces on 
various clauses of 1991 Water Accord.

"Provinces are interpreting various clauses of the accord 
differently," a source said. "The authority is now examining those 
divergent interpretations."

Sindh is demanding distribution of irrigation water among the 
provinces according to clause 14(b) of the accord, which says: "The 
record of actual average system uses for the period 1977-82, would 
form the guideline for developing a future regulation pattern. 
These 10 dailies uses would be adjusted prorate to correspond to 
the indicated seasonal allocations of the different canal systems 
and would form the basis of sharing shortages and surpluses on all 
Pakistan basis."

Punjab argues that clause 14 (b) cannot be implemented without 
increasing the additional storage capacity as the accord had 
envisaged the storage capacity would be increased to 114 MAF.

The Punjab government officials maintain that unless the storage 
capacity is increased, the authority should continue distribution 
of water as per the historical uses under Clause 14 (a).

Submarines may be equipped with Nuclear arms: PN chief

LARKANA, Jan 26: The Chief of Naval Staff Admiral Abdul Aziz Mirza 
said if needed we will install nuclear arms on our submarines, but 
everything has to be decided by the government.

He was talking to newsmen on Friday at the 9th Parents Day of Cadet 
College Larkana. He said we are more advanced than India in 
submarine technology, for India has just started fitting missiles 
on its submarines, something we had done 15 years ago.

He said in very clear terms said we do not need to match with India 
in terms of gun-to-gun and man-to-man as India is a big country.

He said it should be our policy to posses selective deterrence in 
specific areas and add that the government was giving importance to 
the navy.

Extradition accord with Uzbekistan signed
Hasan Akhtar

ISLAMABAD, Jan 25: Foreign Minister Abdul Sattar signed an 
extradition treaty on Thursday with his Uzbek counterpart, 
Abdulaziz Kamilov, who hoped that the treaty would establish 
cooperative relations between the two countries.

The two sides also signed agreements on consular services and 
customs regulations before addressing a joint press conference.

The Uzbek foreign minister expressed a desire to establish 
relations with Afghanistan on certain conditions, such as adherence 
to a policy of non-interference, guarantee of secured borders, 
elimination of terrorist camps in Afghanistan against Uzbekistan, 

Mr Sattar said that at the initiative of the UN secretary- 
general's special envoy, Frances Vendrell, the Uzbek government had 
offered to host a reconciliation meeting of all Afghan parties to 
end civil war.

Both foreign ministers clarified that though a United Nations 
Security Council resolution banned interaction with the Taliban, 
the proposed initiative on Afghanistan had come from the UN 
secretary-general's representative. 

 They added that Uzbekistan had merely offered to host the meeting.

Answering a question, Mr Kamilov said that though Uzbekistan did 
not recognize the Taliban and their ideology, it recognized the 
ground reality that they held sway over 90 per cent of Afghanistan. 

Punjab demands Rs4 billion from provinces

ISLAMABAD, Jan 24: Punjab has demanded Rs4 billion from Sindh, 
Balochistan, NWFP, AJK, Northern Areas, and Defence Division on 
account of wheat supply of wheat in the year 1999-2000.

In an unusual move, Punjab has also transferred 12 per cent mark-up 
on this outstanding money to these provinces and has warned that if 
the payment was not made, it would request the finance ministry to 
deduct the money at source from their food accounts.

Punjab has also sought Rs1.9 billion from the centre on account of 
sale of wheat at subsidized rates to Balochistan and NWFP between 
March 1997 and August 1998.

It has also sought Rs10 million from the federal government for the 
wheat provided by it to Afghanistan in 1999-2000.

Official sources told Dawn that the Punjab government raised the 
issue of non-payment of this money in the inter-provincial meeting 
of food secretaries, held here on Tuesday. The meeting was called 
to resolve the issue of wheat supply to the flour mills.

Sources said that the Punjab food secretary told the meeting that 
state trading in wheat by Punjab food department was being badly 
affected due to non-payment of dues by the provincial governments. 
It said Punjab was promised that cost of wheat would be paid by the 
provinces either in advance or at the earliest possible time, but 
this promise was not fulfilled.

He said non-payment of dues has also affected the retirement of 
loans so the province had to borrow money at extra mark-up to buy 
commodity from farmers during harvesting seasons. It was because of 
this that it was forced to transfer the extra mark-up to the 

Centre moves to resolve Balochistan, Sindh tiff on CJ

ISLAMABAD, Jan 24: The federal government has sought law division's 
opinion on the coastal jurisdiction of Sindh and Balochistan to 
resolve the ongoing conflict between the two provinces over the 
issue of fishing rights.

The fishermen of Sindh have threatened that if they were barred 
from fishing in Balochistan waters, they would not allow the fish 
catch of Balochistan to be sold in their province.

Official sources told Dawn here on Wednesday that the decision to 
seek legal opinion has been taken in the light of a report 
submitted to the National Fisheries Development Board, which met 
here on Tuesday to review the issue.

Balochistan has been complaining about the illegal fishing by 
fishermen from Sindh in its coastal waters and accusing them of 
using fishing gears such as shrimp trawlers, which are considered 

Initially, shrimp trawling activity was restricted to only shallow 
waters along the coast of Sindh. However, unchecked growth in the 
shrimping fleet has led to serious depletion in Sindh waters after 
which the fishermen started entering Balochistan waters for the 

Around 2,400 boats are reportedly involved in this activity though 
for the sustainable exploitation of the shrimp stocks, a total of 
only 500 to 600 fishing boats are required.

Shrimp trawling was rarely done in Balochistan coastal waters prior 
to 1970. However, in '70s a few boats started this activity in 
Pasni and Sonmiani areas. Since early '80s, shrimp trawlers from 
Sindh have been heavily fishing in Balochistan waters.

Sustained efforts in IT sector needed
Nizamuddin Siddiqui and Khalid Rehman

KARACHI, Jan 23: Speakers struck optimistic notes at the inaugural 
session of the country's largest infotech event, "IT - the Future 
of Pakistan", the doors to which were opened by the federal 
minister for science and technology on Tuesday morning.

They were, however, of the view that though Pakistan had made a 
promising start in the field of information technology it must 
sustain its efforts for several years to come before it could 
achieve its goals.

The speakers at the two-day event, organized by the Dawn Group of 
Newspapers at the Expo Centre, included the federal minister for 
science and technology, Prof (Dr) Attaur Rehman, and the vice-
president of the Intel Corporation, Christian Morales.

Mr Morales praised the government's policies as well as Pakistanis' 
capabilities but cautioned that the policies made today could haunt 
for decades to come.

Prof Rehman said that the country must produce thousands upon 
thousands of qualified infotech professionals and upgrade the 
educational institutions before it could forge speedily forward in 
the information technology field. He announced several initiatives 
that his ministry was going to launch in the next couple of months.

The minister said that whatever had been achieved so far was 
largely due to the efforts of the private entrepreneurs. Pointing 
towards the problems the bureaucrats and government functionaries 
posed, he said: "I have been trying to get round the government 
rather than through it."

The minister was of the view that the governments were like black 
holes which often were their own worst enemies. "I was humbled by 
the support the Pakistani entrepreneurs from the United States to 
Australia extended to me."

He announced that on March 23 internet kiosks would be opened at 
the country's airports. "These kiosks are being set up with the 
collaboration of Intel Corporation. And 1,800 internet kiosks will 
be set up at petrol stations throughout the country with the help 
of Pakistan State

Seven PML men get one-year RI
Rafaqat Ali

ISLAMABAD, Jan 22: A judicial magistrate on Monday awarded one 
year's imprisonment to seven workers of Pakistan Muslim League on 
the charge of storming the Supreme Court building on Nov 28, 1997, 
when a bench headed by the then Chief Justice Sajjad Ali Shah was 
proceeding with a contempt of court case against the legislators 
including the then prime minister Nawaz Sharif.

In view of old age, the eighth accused, Malik Munawar Awan, was 
awarded imprisonment of only three months along with a fine of 

The Supreme Court had also examined the case in its original 
jurisdiction and had convicted six PML legislators and sent them to 
jail for one month.

The Supreme Court, however, had separated the case of those 
convicted on Monday on the statement of the police that a challan 
against them had been submitted in the local court.

Those convicted on Monday by Mustafa Sifwat, Civil Judge, 
(Magistrate Section 30), are; Babar Awan, PML youth wing leader; 
Anjum Iqbal, Ali Abbas Khan, Muhammad Farooq, Muhammad Nasim, 
Tanvir Akhtar, Raja Zafar Iqbal and Malik Munawar Awan.

They are convicted under Section 452 (trespass after preparation 
for, assault or wrongful restraint); 353 (assault or criminal force 
to deter public servant from discharge of his duty), 506 
(punishment for criminal intimidation), 186 (obstruction public 
functions); and 147 PPC (punishment for rioting).

Explaining the circumstances under which he was inclined to award a 
lesser penalty to Malik Munawar, the judicial magistrate stated 
that he never defaulted in appearance on any of the hearing dates.

The magistrate stated that it was a matter of concern that the 
accused along with others, criminally trespassed the building of 
the SC, raised slogans against the judiciary, with the intentions 
of brining the authority of the court into disrespect and to 
obstruct the order and decorum of the apex court of the country.

Pakistan declared poppy-free country

ISLAMABAD, Jan 22: A United Nations agency on Monday declared 
Pakistan a "virtually poppy-free" country.

But, a UN drug-control official said, Pakistan still served as a 
transit route for opium and heroin coming from its war-shattered 
neighbour Afghanistan, the world's largest opium producer.

The World Drug Report for 2000, issued by the Vienna-based United 
Nations Office for Drug Control and Crime Prevention (ODCCP), said 
Afghanistan and Myanmar accounted for about 90 per cent of global 
opium production in recent years and almost 95 per cent in 1999.

Afghanistan alone was responsible for more than three- quarters of 
global opium production in 1999, according to extracts of the 
report issued here.

Bernard Frahi, the United Nations Drug Control Programme (UNDCP) 
representative in Islamabad, said Pakistan had shown impressive 
results in eradicating poppy and had brought down its opium 
production from 800 tons in 1978 to less than five tons last year.

"Following a 15-year programme of alternative development, 
supported by the international community and bilateral donors, 
Pakistan, one of the main producers in the early 1980s, succeeded 
in becoming virtually poppy-free in 2000," the report said.

Poppy was still grown in some remote areas near the Afghan border 
but the amount was insignificant, Frahi said.

Bernard Frahi said Pakistan was a transit country for opium and 
heroin leaving Afghanistan.

About 22,500 acres of opium-poppy had been cultivated in 
Afghanistan in 1999, an increase of more than 40 per cent on the 
previous year, the report said.

Cultivation had declined by some 10 per cent last year partly 
because of eradication and alternative development efforts, but 
mostly because of unfavourable weather, the report said.

"Clearly Afghanistan remains the challenge for the global community 
in terms of curtailing opium production and hence the availability 
of heroin," the report said.-Reuters

Benazir decides to return home in September
By M. Ziauddin

ISLAMABAD, Jan 21: Former prime minister Benazir Bhutto has decided 
to return home sometime in September or October this year, sources 
close to her inner circle of advisers told Dawn.

The advice to return in September or October has been given by the 
PPP's Central Executive Committee.

Sources said that the party elders in the CEC vetoed an earlier 
decision of asking her to return home on April 4, the day her 
father was hanged 22 years ago.

These party hawks were of the opinion that her return in April 
would be seen by the government as an attempt to interfere with its 
local government plans and it may react negatively resulting in an 
unnecessary and unwanted street confrontation between the PPP 
workers and the law enforcement agencies.

The party CEC has left the choice of the date of arrival and the 
venue to the chairperson to decide, both of which she is expected 
to fix after the conclusion of the current phase of nationwide 
mobilization efforts launched recently by the PPP.

The hierarchal network of the party, from ward level to the CEC, 
has been reactivated as part of the mobilization efforts and the 
party posts that have fallen vacant for any reason in the last 
couple of years are being filled on an urgent basis.

Sources said that the mobilization exercise had been taken in hand 
to test the political waters and at the same time measure the 
degree of workers' commitment to the cause of the party, especially 
the extent to which they would go in case Benazir was arrested by 
the government on her return.

The PPP sources vehemently deny this charge but they find it hard 
to understand why the MQM at this late stage has demanded that the 
ARD agree to its proposal for a new constitution based on the 1940 
Pakistan Resolution and also that the PPP and the PML tender an 
apology for what the two parties allegedly did to the MQM during 
their respective tenures.

Islamabad seeks $2 billion from IMF
Ihtashamul Haque

ISLAMABAD, Jan 25: Pakistan is seeking $2 to 2.5 billion poverty 
reduction growth facility (PRGF) from the International Monetary 
Fund (IMF) to replace the current $596 million standby arrangement 
(SBA), which is expiring in September this year.

"The government is negotiating a three-year PRGF programme 
relatively on less mark up rate and we hope to qualify for that new 
programme", said finance ministry spokesman Dr Waqar Masood Khan.

Briefing reporters here on Thursday he expressed the hope that the 
government's difficulties would not increase when the ten months 
period of loan restructuring by Paris Club ended in September.

"We may not require funds for our balance of payment problems if we 
succeed to have PRGF", Dr Khan said, adding that so far the Club 
has restructured loans worth little over $5 billion.

He did not offer any comment when asked what would happen in 
September when another rescheduling will be required by Pakistan 
from the Club, keeping in view the still fragile balance of payment 
position. When pressed he said there was nothing on cards except to 
seek PRGF to meet with the future situation.

The additional secretary told a reporter that the State Bank had 
purchased $1.7 billion from the market in 1999 to avoid default on 
repayments of loans to foreign creditors.

Responding to a question he said Pakistan was not seeking from the 
IMF downward revision of various economic indicators set for the 
current financial year. He agreed that the budget deficit was still 
higher than the target of 4.3 per cent agreed with the IMF.

"But we have no plan to seek any revision of various targets which 
are otherwise expected to be achieved by the end of 2000-2001", he 

Answering a question he said he could not give the exact budget 
deficit figure as final numbers have not been received for the 
first six months of 2000-2001.

Dr Khan also said that the finance division and the National 
Reconstruction Bureau (NRB) were jointly preparing a "Fiscal 
Devolution Plan" for the provinces to be later stretched at the 
district level.

He said that a World Bank mission, headed by John Penzer was 
currently visiting Pakistan to offer $300 million for structural 
adjustment credit which, he added, was likely to be converted into 
International Development Agency loan to be disbursed on 
concessionary terms.

He said that another WB delegation was arriving here on 29th to 
extend roughly $250 million for banking sector reforms. 

Asian Development Bank to give $42m for health facilities
Bureau Report

ISLAMABAD, Jan 26: The Asian Development Bank will provide 42 
million dollars to improve reproductive health facilities in 54 
under-developed districts and agencies with lowest socio-economic 

A meeting of the steering committee of the ministry of population, 
which was presided over by population secretary Tariq Janjua, 
discussed the implementation of the project on Friday.

The ministry of population welfare, ministry of health and other 
departments concerned will jointly implement the project.

The project is aimed at improving equity by overcoming rural- urban 
and inter-districts imbalances and social services and uplifting 
health status of 40 million people. This will lead to significant 
decrease in maternal and infant morality and will also contribute 
towards fertility decline in the country.

The project will also promote conducive environment for 
reproductive health services and will enhance the role of NGOs and 
the private sector to supplement government efforts for attaining 
better quality of life.

Dr Vincent de Wit of the ADB, who is heading a technical assistance 
team, senior officials of the federal and provincial governments 
and representatives of civil society attended the meeting.

Long-term funds at floating rates: Textile Vision 2005
Mohiuddin Aazim

KARACHI, Jan 25: Banks and development financial institutions 
(DFIs) have decided to lend long-term funds to textile mills under 
textile vision 2005 at a floating interest rate indexed with the 
State Bank repo rate. But the millers say they must be heard before 
this proposal is made part of the policy, being framed to prepare 
Pakistan to compete in a quota-free market by 2005.

Bankers said a group of leading banks and DFIs had decided to 
charge 1.5-2.0 per cent above SBP repo rate from those seeking long 
term funds under the policy. They said actual interest rate would 
be determined in line with the borrowers ability to earn and repay 
adding that good borrowers might get cheaper financing.

"This will not do any good unless banks and DFIs consult the 
millers," said Mushtaq Vohra, vice chairman of All Pakistan Textile 
Mills Association, when reached by Dawn over the telephone. He said 
banks and DFIs must consult the APTMA before taking any decision on 
lending rates structure of the textile policy. But he admitted that 
linking of interest rates with SBP repo rate was one way of keeping 
them at right levels amidst changes in monetary policy.

The SBP repo rate is the rate at which it lends overnight funds to 
banks and DFIs as a lender of the last resort. The central bank's 
repo rate is a key monetary tool. It is raised or reduced to keep 
monetary expansion at the desired level. At present SBP repo rate 
is 13 per cent and SBP has not indicated any change in it in near 

This means that banks and DFIs may lend long term funds at the 
rates ranging between 14.5-15 per cent, if they keep the mark-up at 
1.5-2.0 per cent above SBP repo rate. Chances are that in few good 
cases, they may lend even at the repo rate itself i.e. 13 per cent 
but in many other cases they may charge the mark-up at more than 
two per cent over the SBP repo rate.

Head of a leading DFI told Dawn his institution was charging 16 per 
cent on long term loans, adding that most of the borrowers had a 
reasonable track record.

Bankers said they have decided to offer long term funds to the 
textile sector under textile vision 2005 at a floating rate just to 
hedge themselves against rapid changes in the monetary policy.

Last year, the SBP first adopted a softer monetary policy to kick- 
start the economy but later on tightened it to keep the exchange 
rates stable. That upset banks' projections about interest rate 
movements and cut their profit margins.

It is against this backdrop that more and more banks and DFIs are 
indexing their lending rates with SBP repo rate or with treasury 
bills rates. This is more so in long term lendings i.e. lending for 
three years or more. Bankers say they would follow the same 
approach in financing funds under textile vision 2005.

At a recent meeting in Karachi top bankers informed Ministry of 
Finance advisor Khalid Siraj of their decision to lend long- term 
funds under the said policy at a floating interest rate. The five-
year policy envisages a total investment of Rs333 billion in the 
textile sector. Banks are going to provide Rs200 billion as debt 
and the private sector is to arrange the rest as equity.

Participants of the meeting held at state-run Habib Bank said 
senior executives of four lead banks and two DFIs briefed Siraj on 
how they had planned to go about project financing and BMR 
financing under the textile policy 2005.

The banks and DFI were (i) Habib Bank (ii) National Bank (iii) 
United Bank (iv) Muslim Commercial Bank (v) Pakistan Industrial 
Credit & Investment Corporation and (vi) Small Business Finance 

PTCL posts lower than expected profits
Dilawar Hussain

KARACHI, Jan 25: Pakistan Telecommunication Company Limited (PTCL) 
posted an after tax profit of Rs7,156 million for the half year 
ended December 31, 2000. The net profit, unveiled by the Board on 
Thursday afternoon, stood considerably lower-than-expected 
analysts' consensus figure of between Rs8.5 to Rs8.8 billion.

Analysts had generally forecast the bottomline to fall in line with 
the previous year's Rs8,630m.

 Improvement in the financial performance for the half-year was 
forecast as the telecom was seen to gain from continued tariff 
rebalancing and particularly the tariff adjustment of August 2000.

The board did not announce an interim dividend and none was 
expected. But during the day's trading at KSE, the share in PTCL 
shed Re1 to close at Rs20.75 with around 68m shares changing hands.

Pretax profit of the company for the half year slipped 14.5% to 
Rs11,010,, from Rs12,881m in the corresponding period of the 
previous year. Provision for taxation amounted to Rs3,854,, down 
from Rs4,251m, but the effective tax rate worked out at 35 per 
cent, against 33 per cent in the previous period.

"Other income" contributed Rs1,444m, which was about three times 
the sum provided by the supplementary sources of income, amounting 
to Rs567m in the same time last year.

The telecom showed revenue at Rs29,483m, which represented marginal 
growth over Rs29,386m in the first half of last year. It was 
possibly the financial charges, increasing by a billion rupees to 
Rs3,477m, from Rs2,447m, which upset analysts' forecasts.

Expecting cash flows to improve, some analysts were hoping for a 
flat or a lower financial charges for the first half this year. 
Though, operating costs, also rose by a substantial 12.4 per cent 
to Rs16,440m, from Rs14,625m, the increase had been factored into 
the projected figures by analysts as the telecom was seen to adopt 
the International Accounting Standard (IAS) 19, from June 2000, 
relating to the contributions made for post retirement employee 

PTCL is poised to launch the Telecom Mobile Company Limited (PTMCL) 
before the end of the current month.

The $70m cellular network project is 100 per cent owned by PTCL. 
With the benefit of the strong parent, PTMCL, some analysts say, 
would open up a new stream of revenue for the telecom in a few 
years time. 

 Others, however, wonder whether in the presence of three 
competitors already in the field of cell phones, there is room 
enough for a fourth?

Tax rate on bank profit may be slashed to 43%
Ikram Hoti

ISLAMABAD, Jan 25: The federal government is considering reduction 
in tax rates on bank profits from 58 per cent to 43 per cent.

This step is being taken in view of the present tax rate rendering 
the banking business unfeasible, say official sources.

They added that though the total incidence of the present tax rate 
was not 70 per cent, as suggested by a statement of federal 
minister for privatization, Altaf Saleem this weekend, the rate of 
58 per cent too, was one of the highest in the world.

Many international finance organizations have been objecting to 
this tax rate, while the local bankers have been complaining that 
their equity was heavily burdened because of the present taxation.

The present rate of 14-15 percent on the bank loans to 
entrepreneurs in Pakistan is also being rated as "very high", 
adversely impacting financing in key sectors by the otherwise 
intending investors, both local and overseas.

The government has been conducting deliberations by involving 
international financial and investing organizations, aimed at 
striking a viable ratio of profits for the banks by maximum 
lowering of the loan-mark up percentage.

It has come to light during these studies that tax was a major 
component of profit-reduction factors for the banks in total 
portfolio maintenance for the last decade in Pakistan.

The government has been considering privatization of major state 
sector banks in the current financial year, but has found through a 
number of overtures to the international parties that they deemed 
the tax rate in Pakistan unusually high, rendering the banking 
business in the country unattractive.

Call to boost textile exports

KARACHI, Jan 26: Chairman of the Export Promotion Bureau (EPB) 
Tariq Ikram has said textile is the mainstay of Pakistan's export 
and only a significant rise in textile exports can help achieve the 
$10 billion target.

At the inauguration ceremony of "Paksea on-line" service of 
Pakistan Knitwear and Sweater Exporters Association (PAKSEA) here 
on Thursday evening, he called for efforts to make up for the 
textile exports shortfall in next six months.

While appreciating the on-line service of the association, the EPB 
chairman urged its members to do their utmost to over the current 
short in exports.

He did not accept the general perception that SRO-417, dealing with 
sales tax refund system, was the main factor in fall of exports. 
"As a matter of fact other factors have hurt our exports," he 

He said that even the slow-down in US economy had no impact on 
Pakistan's export as there is a 15 per cent growth in exports of 
the United States during past six months.

Giving some details of past six months exports, he said textiles 
and garments registered five per cent growth only, while other 
goods like surgical, sport goods etc rose by 15 per cent with non-
traditional goods exports made a remarkable increase of 20 per cent 
and miscellaneous goods exports grew by 30 per cent, over the same 
period of last year.

The EPB chief further said that exports to most of the countries 
was well above last year's figures, including to Dubai and Hong 
Kong. But, he said, exports to Germany declined and had become a 
challenge to our exports. Similarly, he said, except 11 products, 
exports to the UK of all other goods declined in past six months.

Strategy for attracting foreign investors

KARACHI, Jan 26: Two top government functionaries have stressed on 
focussing the revival of confidence of domestic investors and the 
multinationals operating in Pakistan, before attempting to reach 
the investors in foreign lands.

Chairman, Board of Investment, Waseem Haqqie and Sindh Finance 
Minister Abdul Hafeez Sheikh made detailed presentations on 
"Investment Prospects in Pakistan" in a seminar organized by the 
Management Association of Pakistan and outlined the strategy for 
attracting investment to maintain economic growth.

The two speakers were unanimous in expressing the view that foreign 
investors would come to Pakistan only after they find the domestic 
investors and the foreign companies in Pakistan are comfortable in 
doing business here.

"No amount of incentives and concessions will work if a foreign 
investor sees domestic investor or a foreign company is in 
distress," the finance minister said in plain words.

Haqqie informed the participants, mostly business professionals and 
corporate executives, that the BoI was being restructured as a 
corporate entity, in which the private sector would be given a 
dominating role and the governors or the chief executives of the 
four provinces would be associated in the policy framing and 

He said the draft of an ordinance was already given to the 
government, which would be promulgated soon. This ordinance would 
replace the existing official notification, issued to create the 

He said the settlement of dispute with the Hubco, the IMF bailout 
package in the form of standby facility and the recent debt 
rescheduling relief given by the Paris Club have sent positive and 
confidence reviving signals to the investors.

The flow of foreign investment, he conceded, had gone down 
considerably in last six months. However, he pointed out that 
rising trend in last two months had created hope as commitments for 
about $1.6 billion were made.

Change in management for sick units' revival
Sabihuddin Ghausi

KARACHI, Jan 24: The sponsors and owners of 105 sick industrial 
units have failed in convincing the private sector-dominated 
committee on revival of sick units to get their loans restructured 
and rescheduled, along with a refusal to any relief.

"Probably, half may get relief in rescheduling, but only after a 
change in the management", Tariq Hameed, Chairman of the Committee 
for Revival of Sick Industrial Units told Dawn on Wednesday, at 
Habib Bank, while presiding the committee's 17th meeting.

He said, the sponsors of sick units - most of which are closed - 
have been refused any rescheduling relief on reports from banks and 
financial institutions, as they were found to be 'chronic 
defaulters', who failed to respond to any relief given to them in 
the past.

All these units are reported to have an outstanding loan liability 
of Rs23 billion, of which Rs16.2 billion has been classified as 
default showing that servicing of these loan instalments have not 
been done for more than a year.

"Quite a good number of these cases are a total loss", a banker 
explained who pointed out that the sponsors of such units have 
failed to service their loans for last three or more years. The 
only chance of recovery from such sponsor is by selling the junk 
available in the factory premises in the name of machinery and the 
real estate value of plot.

Dawood for emphasis on footwear exports: Leather Show opens
Parvaiz Ishfaq Rana

KARACHI, Jan 26: Minister for Commerce Abdul Razzaq Dawood on 
Friday said the government has contributed Rs470 million towards 
quality improvement of leather products and in environment 
protection from the pollution of leather industry.

Speaking as chief guest at the 21st Pakistan Leather Show 2001, 
jointly organized by Export Promotion Bureau (EPB) and Pakistan 
Tanners Association (PTA), the minister asked the industry to give 
more attention to footwear and leather goods, which are lagging far 
behind in exports.

Praising the contribution of leather industry towards national 
economy and exports, Abdul Razzak Dawood said it contributed five 
per cent to GDP and seven per cent in total exports.

However, he expressed his concern over industry's poor performance 
in footwear and leather goods and said that 50 per cent of the 
world market goes to footwear, whereas our country's share stand at 
five per cent only.

He said that there was a tremendous opportunity in footwear and 
leather goods and what was needed is a little more attention of the 
industry on these products.

The minister appreciated the industry performance during first half 
of current fiscal and said in July-Dec 2000 period there had been 
exports of $344 million as against $261 million of the same period 
last year.

He also urged the exporters to explore other markets as presently 
bulk of leather goods were being exported to European Union and 
North America.

Responding to a point raised by PTA chairman Farrukh Sheikh, in his 
welcome address, the minister said a joint effort of the ministry 
of commerce, ministry of food, agriculture and livestock (Minfal) 
and the PTA was needed to overcome diseases confronting animals, 
which resulted in poor quality of hide and skins.

He said a similar issue was being confronted by textile industry, 
where contaminated cotton was resulting in annual loss to a tune of 
$350 million to the country as our cotton fetches less price in the 
world market.

The minister stressed upon the industry to give its due attention 
towards social responsibility and said that very soon foreign 
buyers would be putting conditions over such issues. He said it was 
only because the WTO's Seattle meeting remained inconclusive, the 
countries like ours got some time.

He assured full support of the ministry, EPB and CBR in promoting 
the industry and its exports and said that so far the leather 
industry had made big contribution towards the economy of the 
country and its exports.

Later, Abdul Razzak Dawood inaugurated the three-day leather show 
2001, at EPB Expo Centre, which will remain open for general public 
for next two days.

Hearing against NAB Ordinance on Feb 12
Bureau Report

ISLAMABAD, Jan 24: A meeting was held in the National 
Accountability Bureau on Wednesday to make preparation for 
successfully defending the NAB ordinance in apex court next month.

A three-member bench of the Supreme Court, headed by Chief Justice 
Irshad Hasan Khan, will start hearing of 15 constitutional 
petitions challenging the NAB ordinance, from Feb 12.

The meeting, besides legal experts, was attended by the sitting 
chairman NAB Lt General Khalid Maqbool and its former chairman 
General Amjad.

One of the participant told Dawn that the meeting was held to 
prepare the case and all 23 points which were noted by the Supreme 
Court in its admission notice, were discussed threadbare.

The preparation is not yet complete and another meeting will be 
held in Islamabad on Feb 1.

It was decided that Abid Hasan Minto will represent the NAB, 
Maqbool Ellahi Malik, Advocate General Punjab, will represent 
Federation. Attorney General Aziz A. Munshi is under notice from 
the Supreme Court.

The meeting was attended by Attorney General Aziz A. Munshi, Abid 
Hasan Minto, Maqool Ellahi Malik, former prosecutor general Farooq 
Adam, and Deputy Attorney General Tanvir Bashir Ansari.

The meeting which started at 11.30am continued up to 4pm.

US Court rejects Pakistan request over bank accounts

ISLAMABAD, Jan 24: A US district court in Colombia has rejected 
Pakistan's request for reviewing its earlier verdict of freezing 
the bank accounts of Pakistan's agriculture ministry in the 
Washington branch of National Bank of Pakistan.

The US District Court judge has also allowed the plaintiff - Ned 
Chartering - to locate the defendant's (agriculture ministry) 
assets in the United States to enforce its December 4 judgment in 
which Pakistan was asked to pay US$268,000 to the plaintiff on 
account of wheat shipment charges from Turkey in the early 1990s.

The agriculture ministry had sought dismissal of plaintiff's case 
on the grounds of immunity of its accounts under US's Foreign 
Sovereign Immunity Act (FSIA).

But the court did not entertain Pakistan government's request. It 
not only denied Islamabad's appeal but ordered that the writs of 
attachment shall remain in effect pending asset acquisition by the 
plaintiff company.

Ned Chartering, however, told the court that the ministry had 
reportedly transferred $3.0 million from NBP Washington branch, 
after the US court's order, to avoid penalty.

Consequently, only $4,000 were left in agriculture ministry's 
account in NBP, Washington, which were accordingly frozen on court 

Following the freezing of its accounts, the agriculture ministry 
filed a review petition in the court seeking reversal of its 
earlier order and detachment of assets in the United States.

Subsidy on wheat to go by June

ISLAMABAD, Jan 23: The federal government has decided to abolish 
subsidy on wheat and provide the commodity at uniform rates 
throughout the country from next financial year.

This was disclosed at a meeting of a sub-committee of the Economic 
Coordination Committee of the Cabinet and the office-bearers of the 
All Pakistan Flour Mills Association here on Tuesday.

The association's representatives were told that a summary for this 
purpose would soon be submitted to the ECC for taking a final 

The meeting, presided over by planning secretary Mutawakil Qazi, 
was attended by the APFMA vice-chairman Tariq Sadiq and the four 
provincial food secretaries.

Mr Sadiq told Dawn after the meeting that the sub-committee members 
agreed with the association's demand to end the subsidy on the 
wheat and let the market forces work independently.

Sources said that the committee also agreed that there should be no 
ban on inter-provincial movement of wheat to give an opportunity to 
the flour mills so that they could get the commodity easily.

It was also pointed out that at the time of wheat procurement, the 
government must not control the procurement drive and should 
provide a level playing field to all the stackholders.

The committee also questioned about the increase in flour prices in 
Karachi and Hyderabad. The APFMA office-bearers maintained that the 
increase in prices was made because the private sector was 
supplying the best quality flour to the consumers in the two 

Sources added, the meeting also agreed that the government must 
introduce a uniform price policy throughout the country to enable 
the consumers to get wheat at the same rate as the difference in 
flour prices was creating provincial disharmony.

KSE directed to enforce reforms

 ISLAMABAD, Jan 23: The Securities and Exchange Commission of 
Pakistan (SECP) has directed the Karachi Stock Exchange to take 
immediate measures for implementing the reforms for running the 
affairs of the exchange in a manner that the investors' rights are 
not harmed any further.

In a statement on Tuesday, the SECP said recently all the stock 
exchanges were directed to make certain changes in the governance 
structure to ensure accordance with internationally accepted norms 
of management and in the best interest of capital market.

Delay in these reforms would put the country's stock markets in 
risk of not only losing competitiveness viz a viz other markets in 
the region, but would also cause the genuine local investors to shy 
away from investing in Pakistani markets.

The Karachi Stock Market (KSE) endorsed the amendments made by the 
SECP, but did not approve, through majority vote, at the general 
body level, in view of which the position is reiterated that the 
amendments had become effective by application of section 34(5) of 
the SECP Ordinance-1969.

Highlighting the reforms and their induction in the Pakistani stock 
exchanges, the SECP pointed out that previously, the KSE's 16 out 
of 18 directors of the board were directly or indirectly appointed 
by the members.

Such a board could only serve the interest of members, and not the 
investors. The degree to which the board could take decisions in 
the public interest is a key governance issue relevant to the 
running of KSE.

Back to the top
Ardeshir Cowasjee

A FEW years ago I asked a question: How do we shame the shameless? 
The feedback overwhelmingly indicated that I was considered to be 
naive, and I was the butt of much laughter.

Yesterday I received by courrier three bound files of papers with a 
covering letter purportedly from 'WAPDA Officers (For good 
management)'. The writers conveyed to me their salaams and told me 
that they had never imagined that I could be so naive as to imagine 
that General Pervez Musharraf and his men know nothing about the 
present high level corruption, which I maintained was drastically 
reduced. They also put it down to the ageing process, or to the 
desire to believe in someone, that I was under the impression that 
corruption at the lower levels had been somewhat reduced. They were 
sending me three volumes of documents 'painstakingly put together' 
which they suggested I study as the contents may change my opinion. 
This also would be material for one of my columns. The closing 
exhortation : "May you live long to see Jinnah's Pakistan once 

Now, as would have said my late lamented old counsel, Dingomal 
Ramchandani, who, when the true history of Pakistan is written, may 
warrant more than just a footnote : Lo and behold! The honest 
officers of WAPDA have not signed their letter, or identified 
themselves. Shame?

Why and how is it that we have leaders who have no concept of 
apology or atonement for their conduct ? Take Jungle ke Badshah 
Bill Clinton, who, two days before he relinquished the most 
powerful office in the world, made the following statement: "I 
tried to walk a fine line in between acting lawfully and testifying 
falsely, but I now recognize that I did not fully accomplish this 
goal and that certain of my responses to questions about Ms 
Lewinsky were false. I have apologized for my conduct and I have 
done my best to atone for it with my family, my administration, and 
the American people."

Our tin-pot Napoleons who have lied through their rotten teeth, 
robbed like rabbits on a spree, fleeced the nation and left it on 
its knees, are incapable of bringing themselves to make similar 
statements, to hide their heads in shame, and quietly disappear for 
ever from the national scene, rather than getting themselves 
arrested, jailed, pardoned, exiled, or having been convicted of 
corruption, allowed to tramp the free world making speeches 
unfavourable to their country to whatever forum beckons them? This 
might allow the country to make some progress.One of the 
multifarious tragedies of Pakistan is that it is a nation bereft of 
men or institutions to whom and to which the people can look up 
with any modicum of trust or respect. Let us start with former 
president of the republic, the obstinate, uncompromising, grim 
Ghulam Ishaq Khan, who, one could take a risk and say, was not 
personally financially corrupt. But one cannot say with full 
certainty that he was not as, whilst in office, he allowed an open 
field to his two sons-in-law, Anwar Saifullah and Irfan Marwat, to 
abuse the national wealth and the people.

Ghulam Ishaq did right by dismissing Benazir Bhutto in 1990 on 
completion of her first round, together with her highly corrupt 
government. But then to ensure his own survival as head of state he 
imposed on Sindh as its caretaker chief minister no less a man than 
Jam Sadiq Ali, knowing fully well who and what he was and exactly 
what were his capabilities.

His mission in 1990 was to bring in Nawaz Sharif as prime minister, 
which he successfully did. His mission in 1993 was to dismiss Nawaz 
and his highly corrupt government. Having done that, he demeaned 
himself by collaborating with the same Benazir whom he had thrown 
out and for whom on many an occasion he had expressed his utter and 
absolute contempt. His mission was then to bring her back and 
whilst he was doing so he further demeaned himself by agreeing to 
include in his caretaker cabinet her disgraced and famously corrupt 
husband, Asif Zardari. Thereafter things went awry. A malleable 
Supreme Court brought Nawaz back and then a firm chief of army 
staff threw out both Ishaq and Nawaz.

Ghulam Ishaq is back in the news once more. Our world famous gold-
medal bedecked nuclear scientist, Abdul Qadeer Khan, has collected 
money from the people or collected from other monies to which he 
has acess, to build within the grounds of the GIK University a 
mausoleum in which GIK will be put to rest when his time on earth 
runs out. Over Rs.5 million has been spent on this university 
project. Not believing what I had heard, I asked my friend, 
suspended speaker Ilahi Bakhsh Soomro, a great supporter of GIK and 
now rector of the GIK U, whether there was any truth in it. He 
admitted that there was; the mausoleum stands on a hilltop for all 
to see and admire. I suggested to Ilahi Bakhsh that he advise GIK 
not to make a fool of himself and not allow himself to be so 
degraded. Whether Ilahi Bakhsh can bring himself to do this is 
questionable. My friend is flip-flopping, hoping finally to be the 
prime minister of Pakistan - and he may turn out to be a good one.

Back in time to Zulfikar Ali Bhutto. Aspiring politicians all over 
the world, even in sanctimonious Great Britain, wield flattery as a 
powerful weapon with which to worm their way upwards. For instance, 
as Richard Crossman, Labour MP and a Wykhemist to boot, used to 
say, "The way to become a minister is either to lick the arses of 
the leadership or kick them in the political goolies." (This was 
quoted by Dalyell's biography of Crossman.) Few can be more adept 
at the art of flattery than was ZAB.

Rising young star ZAB in 1958 wrote a letter to President Iskander 
Mirza, by whom he had been sent as chairman of a delegation to the 
UN Conference on the Law of the Sea held at Geneva: "I would like 
to take this opportunity to reassure you of my imperishable and 
devoted loyalty to you. Exactly four months before the death of my 
late father, he had advised me to remain steadfastly loyal to you, 
as you were not an individual but an institution'.

"For the greater good of my country, I feel that your services to 
Pakistan are indispensable. When the history of our country is 
written by objective historians your name will be placed before 
that of even Mr Jinnah. Sir, I say this because I mean it and not 
because you are the president of my country."

It worked. When Iskander and Ayub took over on October 7, 1958, 
Zulfikar was sworn in as a full-fledged minister in the first 
martial law cabinet.

Being a thoroughbred political animal, flip-floppy and of little 
character, he realized where power lay and, despite the fact that 
it was Iskander who was responsible for his rise, stayed on with 
Ayub Khan after Iskander was deposed and sent into exile. He 
ingratiated himself to such an extent that Ayub fondly referred to 
him as his fifth son.

In 1976, in the fifth year of his rule over what was left of 
Pakistan, in a note to the chief of army staff on the subject of 
'the elevation of General Ayub to the rank of Field Marshal', he 
claimed full credit for the master-stroke. In 1959, Ayub was 
apparently worried about the intrigues and ambitions of certain of 
his generals. It was ZAB who then advised, 'rather cynically' he 
said in his note, that since it was essential that Ayub be 'head 
and shoulders above the others' he should elevate his rank to that 
of Field Marshal, which Ayub Khan did soon after. Proudly he wrote 
"I am therefore the hero of Ayub Khan's valorous battles. Of 
course, the object of this note is not to dismantle the man. Some 
of us can still refer to him with respect. I am only setting the 
record straight." Hypocrite?

All of this is rather horrid and disgusting.

Now to business at hand. We are in deep mire and sinking deeper by 
the day. The photographs of our sole allies - blind, hooded, armed, 
hirsute, fierce - carried in the press are enough to frighten even 
those with the strongest of nerves. No one who wishes to live in 
peace and prosperity will consider investing in our country. 
Without keeping our allies well under wraps, or disassociating 
ourselves from them, and then reviving the economy we will get 
nowhere. The main news emanating from and about this country 
concerns Kashmir, terrorists, Shariah laws, interest-free banking, 
karo-kari, blasphemy laws - which is all rather deflating and 
discouraging. Kashmir and all that goes with it should be relegated 
to the back-burner until we can pull ourselves up.

A glimpse of the future
Ayaz Amir

NO need to go to the Malakand Agency or Maulana Samiul Haq's famed 
redoubt in Akora Khattak to look at the future. The future is all 
around us, with poisoned fangs pressing its claims on the decaying 

Parts of Chakwal are turning slowly but surely into Afghan 
localities. The outskirts of the town are pockmarked by Afghan 
tents. The richer Afghans dominate sections of the main bazaar. The 
poorer sort push streetcarts or work as day labourers. It is a 
common sight seeing their children pick rags. Whence (from which of 
Afghanistan's provinces) have these people come? How many are they? 
No one knows, least of all the administration which has not the 
measure of this insidious diaspora.

Nor is Chakwal an exception. A vast Afghan influx is changing the 
colour of the entire north Punjab plain. These Kabuliwallahs are 
not seasonal migrants or Powindahs driving their flocks south for 
the winter and then returning to their upland homes when the 
weather turns warm. They are here to stay, their urge to do so 
strengthened by the memory of the misery they have fled and the 
relative plenty they have found here. Is Pakistan a poor country? 
Few Afghans, or Bangladeshis for that matter, would agree.

Beginning with the great Mahmud, Afghans have come to these parts 
as conquering dynasts. For the first time in history they have 
entered as termites, infiltrating the woodwork and spreading not by 
open conquest but relentless encroachment. And just as tired wood 
is helpless before an onslaught of termites, the weak structure of 
the Pakistani state is helpless before this unheralded invasion. 
The Durand Line is a thing of the past. As before the Sikh empire 
of Maharaja Ranjit Singh, Afghanistan has entered the heartland of 

Is this a call to xenophobia? It could be read like one although it 
is more a despairing cry over the debilitating cancer that has laid 
Pakistan low. Today we are in no position to count our own people 
much less make an accurate count of the Afghans who have pitched 
tent in our towns and villages. There is a Pakistani diaspora in 
the Gulf and much further afield. But it is not running loose 
because the countries wherein it is to be found are better at 
keeping count of foreigners and of enforcing their own laws. 
Pakistan by contrast has become an open sieve which anyone can 
enter and leave at will.

Worse, it's also become open territory for anyone to settle in. 
Iran kept its Afghan refugees under control. General Zia, the 
source of so many of our sorrows, let them have the freedom of the 
country. The consequences are now upon us in the form of an Afghan 
invasion more permanent than any before it. It is also an on-going 
invasion with Afghanistan's on-going troubles sweeping fresh waves 
of refugees into Pakistan.

The Afghan and Mughal kings who led their armies into India sought 
local allies to facilitate their plans of conquest. The Afghan 
invasion whose ravages we are witnessing rests on an unspoken 
alliance with the clerical forces of Pakistan. How this equation 
benefits the Afghans is obvious: it provides them with a congenial 
and friendly environment. But it also benefits the holy fathers of 
Pakistani fundamentalism who get a ready-made constituency for 
their cause. Let's hope the barricades never rise in Pakistan. If 
they do, be not surprised if the holy fathers and the Afghans who 
have made Pakistan their home make common cause. Nor is this all. 
The bedrock of this alliance is formed by elements within the 
Pakistani establishment which espouse the Taliban cause in 
Afghanistan and that of jihad in Kashmir.

If only what was at stake was the future of Afghanistan or Kashmir. 
It is not. At stake is the future of Pakistan itself. And the 
question is: can Pakistan get over the hangover induced by the 
Afghan jihad and begin concentrating on essentials? The 
administrative form of the state is in ruins. The state can neither 
maintain law and order nor collect adequate revenue. It also is 
unable to reverse the Afghan tide.

In 1919, after defeat in the first world war, Turkey's problem was 
not to revive the Khilafat but secure its national borders. Mustafa 
Kemal's greatness lay in recognizing this. All the archaic claptrap 
of empire he discarded ruthlessly without regard to nostalgia or 
false sentiment. But on the question of securing Turkey's national 
frontiers he did not hesitate to go to war with Greece even though 
it enjoyed the full backing of the victorious Allies. For the 
return of Alexandretta on the border with Syria (then a French 
protectorate) he looked the French in the eye. In his mind he was 
clear about what was essential for Turkey and what was not.

Incidentally, secularism was a byproduct of the Kemalist 
Revolution, not its central guiding principle. Much in the same way 
that Lincoln fought the Civil War to preserve the Union and not to 
end slavery, the end of slavery being one of the consequences of 
that epic struggle.

The ability to distinguish between the essential and non-essential 
seems beyond us. Which is why for the sake of secondary or even 
chimerical goals we are imperilling our national well-being. We 
fought the Afghan war as a US lackey. The consequence of that is 
upon us in the form of the Afghan invasion entrenched on our soil. 
What will be the consequence of the jihadi line in Kashmir? It has 
already led to the growing voice of the religious parties within 
the country. With what credibility then can the interior minister, 
Lt Gen Haider, talk of asking the religious parties to remain 
within the law when their jihadi pursuits endow them with a 
mythical status which no sheriff of the law dare touch? 
Unregistered human beings the state is unable to count or control. 
How can the state get hold of unregistered weapons?

Pakistan's problem is not democracy vs dictatorship. It is to 
restore the state's vitality. The state should be able to count its 
citizens. It should be able to get rid of illegal foreigners, flush 
out illegal weapons, maintain order, check electricity theft 
without having to call in the army for the purpose and carry out a 
drive to document the economy without provoking a general revolt. 
Only when the state's moorings are thus secured can it tackle the 
problems of health, education and development. How will democracy, 
of the kind we have had, aid this endeavour? The problems of 
Pakistan have gone beyond democracy, beyond Benazir Bhutto or the 
return of Nawaz Sharif. The country is in deep crisis and the times 
call for stern action. It is here that the army's deepest failure 

Its advent was welcomed on the grounds that the toughness demanded 
by the times could come only from the army. That this belief rested 
on false assumptions, and that in expecting radical steps from the 
army the dismal record of military interventions past was 
forgotten, is beside the point. On the army's shoulders lay once 
more the burden of popular expectations. How completely those hopes 
have been belied needs no comment because it is clear to all. Even 
so, the requirement of taking a sharp knife to Pakistan's problems 
remains as fresh as ever. Pakistan is being assaulted from within 
by a process more dangerous than any overt aggression. Half-
measures will not do. 

Democracy? The very word makes the stomach queasy. No Pakistani 
variant of democracy can meet the challenge of the Afghan suburbs 
which spread before me as I go for my evening walks along the 
Thaneel road. But strongman rule? All we seem to get are tinpot 
variations of it. Which makes it uncertain how we'll tackle the 
future whose loud knocking at the gate has already shattered the 
calm within.

Defying the popular will 
Irfan Husain

THE January issue of The Herald carried two important interviews, 
one with Benazir Bhutto, and the other with retired General Hameed 
Gul, ex-head of the Inter-Services Intelligence (ISI) and now a 
hard-line proponent for jihad in Afghanistan and Kashmir.

Although Ms Bhutto has been somewhat disingenuous about allegations 
against her and her husband, the incarcerated Asif Zardari, she 
makes some very valid observations about the relations between the 
army and intelligence agencies on the one hand, and an elected 
prime minister and civil society on the other. Basically, the ex-PM 
is of the view that given the incessant attempts by various spy 
outfits to destabilize elected governments, it is not possible for 
politicians in office to function effectively. To support her 
contention, she has given numerous examples of the Byzantine 
intrigues she endured before she was removed on two occasions.

We remember all too well the infamous "Operation Midnight Jackal" 
in which intelligence operatives were videotaped trying to bribe 
members of the National Assembly to vote against their leader in a 
no-confidence vote. This is only one of many instances of 
interference by intelligence agencies in domestic politics. 
According to Benazir Bhutto, there are now as many as seven 
agencies playing politics "down to the tehsil level".

Perhaps the most blatant bid to thwart the popular will was the 
hijacking of the 1990 election: General Aslam Beg, then Chief of 
Army Staff, has publicly admitted to receiving 140 million rupees 
from the (understandably) defunct Mehran Bank to distribute among 
anti-Bhutto politicians. To date, the general has not rendered a 
full accounting of this sum, at least not publicly. General Asad 
Durrani, then head of the ISI, has submitted a list of Muslim 
League luminaries who were recipients of this largesse. None of 
these defenders of democracy has denied getting this cash. Durrani 
is currently our ambassador to Saudi Arabia; Benazir Bhutto had 
earlier appointed him to represent Pakistan in Germany.

Another ex-director-general of the ISI has also been interviewed in 
the January issue of The Herald, and his views are chilling in 
their implications for the future of democracy in Pakistan. When 
asked: "...Does the will of the people, as reflected by the results 
of an electoral exercise, not give an indication of the nation's 
vision?", Gul replied: "It does not, Because if the politicians 
want to change the agenda, why do they not tell the truth in their 
election campaigns?" The inference here is that the nation's 
security agenda is immutable, and only the military is capable of 
determining it. In no functioning democracy are politicians 
required to spell out precisely what steps they will take to ensure 
national security during their tenure.

When asked about the 1988 elections in which Gul cobbled together 
the IJI, an anti-PPP alliance, and whether those elections had been 
rigged, the ex-head of the ISI responded: "The elections were not 
rigged. Only conditions were created that were favourable to 
certain results. One must not be puritanical about this...." And 
when asked if these activities were undertaken by agencies acting 
on their own, he categorically replied: "It is not the intelligence 
agencies. They are not maverick bodies. They are very much part of 
the inner thinking of the defence establishment".

More recently, Javed Hashmi, appointed acting head of the Muslim 
League by Nawaz Sharif, has complained that the ISI has been trying 
to break up his party. This would not take very much as the League 
is largely composed of opportunists who have come together for 
their own interests when they catch a whiff of power. But it is 
significant that parties like the Muslim League and the MQM, both 
of which have enjoyed the blessings and largesse of the defence 
establishment in the past, should now squeal about the activities 
of government agencies.

There is a real contradiction here, and one that will have to be 
resolved if this country is to move forward and develop lasting 
political institutions. On the one hand, we have a defence 
establishment that has set its own security agenda and is 
answerable to nobody; and on the other, we have the compulsions of 
elected politicians who have to balance security considerations 
with development needs, and who are accountable to parliament and 
the people. Whenever an elected leader shows any inclination of 
lowering tensions in the region, the military perceives this as a 
threat and launches a campaign of disinformation and 
destabilization. And yet the sober truth is that without 
normalizing ties with India, distancing ourselves from the Taliban 
and reducing our defence budget, there will be no fresh investments 
and no meaningful economic development.

So where do we go from here? At most a year from now, the country 
will begin gearing up for national and provincial elections if the 
Supreme Court's decision is to be implemented. Once more, the two 
main contestants will be the PPP and the PML. The latter, however, 
will be severely handicapped by its popular leader's exile which is 
widely seen as an act of cowardice. There is thus a real 
possibility of the PPP returning to power, even if the agencies 
cobble together another coalition against it. The fundamentalist 
parties will probably not fare any better than they have in past 
elections. How will the defence establishment deal with Benazir 
Bhutto's return to power?

The fact is that as far as the military is concerned, she has three 
major drawbacks: she is a woman, a Sindhi and Zulfikar Ali Bhutto's 
daughter. The latter sin in unforgivable as he is the scapegoat for 
the army's defeat and humiliation at Indian hands in 1971. Even 
Asif Zardari's free and easy ways with the exchequer would have 
been acceptable to the establishment had his spouse not been a 

So, although the army high command realizes it has to organize a 
return to democracy, it feels obliged to fine-tune the result to 
ensure that a weak government and a pliable prime minister are 
voted into power. This has been the elusive Holy Grail for GHQ, and 
one that is simply not achievable because no matter how biddable 
the prime minister is initially, his own political compulsions 
drive him (or her) to distance himself from GHQ's agenda. In Nawaz 
Sharif's case, of course, hubris and a 'heavy mandate' expedited 
his fall from grace.

Given the divergence between the army's perception of security 
needs and the national demand for social and economic development, 
we have reached an impasse. We can only move forward if the defence 
establishment is willing to subordinate its agenda to the popular 


LAHORE, Jan 24: Pakistan hockey got a shot in the arm on Wednesday 
when Gen Pervez Musharraf announced a grant of Rs20 million to help 
it regain lost glory.

"Pakistan has always been a sporting nation and my government has 
top priority for sports," Musharraf said, speaking at a national 
hockey tournament final.

Three-time Olympic and four-time world champions, Pakistan has 
fallen from its top perch in the hockey arena in recent years.

Pakistan lost its Asian title in 1998 to arch rivals India and 
finished last in the elite six-nation champions trophy in 1999.

"We must work together for the revival of our image in 
international hockey," he said.

The government would also provide funds to lay astro-turf at five 
centers in Karachi, Peshawar, Sialkot, Abbotabad and Bahawalpur, he 

Pakistan Hockey Federation secretary Brigadier Musarratullah Khan 
said Musharraf's announcement has "given us a sigh of relief."

Khan said Pakistan was ready to revive matches against India.

"We know that it's beneficial for hockey in Asia that Pakistan and 
India play each other," he said.-AFP

PCB's cash incentives 
By Our Sports Correspondent

 LAHORE, Jan 23: The Pakistan Cricket Board (PCB) has announced 
cash prizes for outstanding performances during the five-match 
series between Pakistan Probables and Pakistan Academy Probables

The winning team of each match will get Rs 50,000 while the losing 
team Rs 25,000. 

 Each team scoring 260 or more runs in an innings will get an 
addition amount of Rs 12,000.

Similarly, the Man-of-the-Match will be awarded a prize of Rs 
5,000.For each individual century and fifty Rs 10,000 and Rs 5,000 
will be given, respectively. The bowler who will pick four or more 
wickets will be paid Rs 10,000. Best fielder of the match will be 
paid Rs 2,000.

There are also incentives for spectators, who will not be charged 
at the gates.A catch in the crowd will be worth Rs 1,000.

Malik appears before panel
By Our Sports Reporter

KARACHI, Jan 20: Former Pakistan captain Salim Malik appeared on 
Saturday before a disciplinary committee of his employers to 
clarify a show-cause from them.

Malik, who plays for Habib Bank, was banned last May from the game 
at all levels by the Pakistan Cricket Board (PCB) wants to play 
again and had already filed an appeal in a civil court.

Habib Bank have not sent Malik's name in list of 25 players to the 
PCB for next month's Patron's Trophy.

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