------------------------------------------------------------------- DAWN WIRE SERVICE ------------------------------------------------------------------- Week Ending : 16 June 2001 Issue : 07/24 -------------------------------------------------------------------
Contents | National News | Business & Economy | Editorials & Features | Sports
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CONTENTS ===================================================================
NATIONAL NEWS + Debt-exit plan prepared: Musharraf + Musharraf, Vajpayee equally vital in resolving Kashmir dispute + Govt not to hinder ARD campaign + CE pledges real democracy: Meetings with Nasrullah, Fatehyab + Musharraf to consult leaders on summit + Hearing of plea against SC office decision begins + AG hints at invocation of doctrine of necessity: Riba issue + High Court moved Muttahida wants LB polls stayed + Benazir's India visit before summit + Alliance for Restoration of Democracy team meets US, EU envoys + Four bomb blasts in Karachi: ASI killed + Law on way to ban sectarian outfits + CE wants new steps to combat sectarianism + Provinces voice concern at draft police law + Former speaker Gilani indicted + Former minister gets 9-year RI --------------------------------- BUSINESS & ECONOMY + Govt to opt for huge domestic borrowing: 2001-02 fiscal year + NFC to work out fresh arrangement: Resources distribution + Petrol prices up by 14.5%: Deregulation from July 1 + State Bank gets $350 million from World Bank + Riba deadline frozen by a year: SC refuses extension till 2005 + No interest-based transactions from July 1 + Sindh manages to collect 85% of targeted revenue + Ishrat warns against money laundering + Rs 212 million at source deduction by WAPDA irks NWFP + Political economy of Pakistan's foreign debt + Self Assessment Scheme allowed to public companies + World Bank decides to give $60 million for SAP + Exports grew by 7.24% during July-May: FBS + PIBs sale short of target: Fallout of hike in TBs yield --------------------------------------- EDITORIALS & FEATURES + Allah be praised! Ardeshir Cowasjee + Pakistan's Khatimids: eyeless across the waters Ayaz Amir + How about some compassion? Irfan Husain ----------- SPORTS + Australia beat Pakistan by 7 wkts + Hanif expects Germany to be a tougher opponent + PSB rejects POA's plea for review of sports policy + India never ruled out playing in Pakistan + Miandad tells court he was misquoted + Shoaib, Sami ruled out of remaining tri-series ties + Shoaib's injury, contract makes Yawar unhappy + Waqar has revenge, psychology in mind

Debt-exit plan prepared: Musharraf

ISLAMABAD, June 15: Gen Pervez Musharraf, said that the government
had worked out a strategy to get a five-year breathing space to
come out of the debt trap and revive the economy.

The CE said "Our dilemma is that there is no money left in our
budget for the development projects after meeting our essential
expenditures. Taking loan is our pre-requisite otherwise we cannot
progress," said Gen Musharraf.

Gen Musharraf said, the "breathing space" would be available
provided the International Monetary Fund and World Bank would give
Pakistan loans facility for the Poverty Reduction an Growth
Facility. Similarly, the London and Paris Club should reschedule
Pakistan's loans."

Gen Musharraf said Pakistan had just received $350 million from the
World Bank on the zero interest rate as it had to pay only 0.75 per
cent service charges. This facility was for the next 35 years which
was as good as free.

The CE said the country would come out of the debt trap in five
years. Spelling out the government strategy during the breathing
space, he said the country's GDP would be enhanced. Efforts would
be mounted to raise the foreign reserve exchange at least up to the
level of $3 billion, if not $4 billion.

He expressed the confidence that exports would touch the $9.2
billion mark from $7.5 or $7.6 billion during the past two years.
Similarly, he said, the country would generate about $3 billion,
while endeavours were afoot to check the losses of billions of
rupees being suffered by national corporations like PIA, Wapda,
Railways and the KESC.

Gen Musharraf said that during the next five years, the country's
revenue would be raised. The revenue collection from 1993-94 to
1999 went up from Rs 200 to Rs 300 billion, but it was raised from
Rs 100 billion to Rs 400 billion in the last two years. "This has
never happened in the past." -APP

Musharraf, Vajpayee equally vital in resolving Kashmir dispute
By Jawed Naqvi

NEW DELHI, June 15: Gen Pervez Musharraf's comments, stressing
Kashmir's primacy as the core issue during his forthcoming visit to
India, have prompted Prof Abdul Ghani Bhatt to stress that the
Pakistan chief executive was as vital as Indian Prime Minister Atal
Behari Vajpayee in resolving the dispute of his Himalayan homeland.

The chairman of Kashmir's All Parties Hurriyat Conference said "The
man in Islamabad represents will and power. And the man in Delhi
represents ethos and consensus".

He said the Indian administration should not seek to marginalize
the APHC during the forthcoming summit talks with Pakistan.

Govt not to hinder ARD campaign
Staff Reporter

ISLAMABAD, June 15: Veteran politician Nawabzada Nasrullah Khan in
his meeting with Gen Pervez Musharraf was able to secure permission
for ARD to continue its third phase of people's contact campaign
without state intervention.

Though the official handout released by the Army House did not
carry such a promise, Nawabzada Nasrullah claimed at a press
conference that the chief executive had assured him that the
workers' conventions of ARD at Peshawar, Faislabad, Hyderabad, and
a public meeting on August 14 at Liaquat Bagh would not be
interrupted. On the demand to hold immediate elections for the
restoration of democracy the chief executive reiterated his
commitment to implement the Supreme Court's verdict in this
connection before October 2002, Mr Nasrullah said.

The ARD chief also conveyed to the CE the opposition's concern
about the accountability process but the general did not give any
assurance on this count, he said. About Benazir Bhutto's recent
conviction by an accountability court in absentia, the CE said
neither he nor the chairman of the accountability bureau were
"aware" of the case, he said.

To the question, whether he met the chief executive in his personal
capacity or as chief of the opposition's alliance, he replied: "I
went there in my individual capacity as a citizen of the country,"
he said. When the same question was asked by another reporter, he
said, the ARD component parties had not put any restriction on his
meeting the chief executive.

Mr Nasrullah said that the CE assured that he would not demonstrate
any "flexibility" on the Kashmir issue in his proposed talks with
the Indian prime minister. However, the CE did apprise the ARD
chief of his plan to consult political leaders before leaving for
New Delhi.

CE pledges real democracy: Meetings with Nasrullah, Fatehyab
By Faraz Hashmi

ISLAMABAD, June 14: The Chief Executive Gen Pervez Musharraf met
two more opposition leaders, Nawabzada Nasrullah Khan and Fatehyab
Ali Khan, and reiterated intention to "introduce genuine democracy
in the country."

The meeting held at the Army House, Rawalpindi, lasted for more
than two hours and besides proposed Pakistan-India summit a number
of domestic issues including the government's reforms agenda,
devolution of power to the grass roots level and steps initiated to
introduce genuine democracy in the country, were discussed at the
meeting, an official announcement said.

Nawabzada Nasrullah Khan met the Chief Executive with the mandate
of ARD component parties, ARD leaders said. Senior Vice-Chairperson
of Pakistan People's Party Makhdoom Amin Fahim and Vice President
of Pakistan Muslim League (N) Zafar Ali Shah, when contacted,
confirmed that Nawabzada took them into confidence before going to
the Army House.

Syed Zafar Ali Shah said that ARD at its meeting had decided that
in case of a meeting with Gen Musharraf, all the issues including
restoration of 1973 constitution, ban on political activities and
accountability process would be taken up and he would be apprised
of the opposition's point of view on these issues. An official
source said the Chief Executive secretariat has lined up three
meetings between June 22 and June 28 to take people from a cross
section of society into confidence about his upcoming visit to

The first meeting would be held with all the political leaders and
their opinion would be taken on Kashmir and other outstanding
issues with India. Media persons including prominent journalists
and editors and owners of leading newspapers would be invited at
the second meeting and the third meeting would be held with the
religious leaders and scholars.

The religious leaders and scholars would be invited in their
individual capacity and not as heads of different religious parties
or groups.

Musharraf to consult leaders on summit
By Nasir Malick

ISLAMABAD, June 12: Gen Pervez Musharraf will be holding a series
of meetings with political groups, religious leaders and
intellectuals in the third week of June to take them into
confidence over his forthcoming visit to New Delhi, a senior
government source told Dawn. "He will also like to hear their views
on this subject."

The source said that the CE wanted to have full support of the
people before his Delhi trip. He said that Gen Musharraf would be
meeting the political groups as he considers that it was necessary
to achieve a national consensus on the issue before heading for the
talks. Gen Musharraf met PML (LM) president Mian Azhar where this
issue was also discussed.

The political analysts said that Gen Musharraf had met the
officially-supported group of the Muslim League after reports that
the candidates of PML (N) were sweeping the local government
elections in Lahore. Efforts were already under way to unite
different factions of the Muslim League against PML(N).

The source said that the chief executive would start meeting
various political groups and religious parties in the third week of
June. These meetings would be followed by his meeting with the
editors, columnists and other intellectuals. "We have received a
very positive response from the political and religious groups and
we want to maintain this rapport with them," the source added while
referring to the initial contacts being made by the government with
the political groups and religious parties. "It is a national issue
and we hope that political and religious leaders will lend their
full support to the government," he added.

Hearing of plea against SC office decision begins
Staff Reporter

ISLAMABAD, June 11: A four-member bench of the Supreme Court
started hearing Dr Basit's appeal against the Supreme Court office
decision of returning his constitutional petition seeking deletion
of remarks against Justice Abdul Qayyum and Justice Rashid Aziz.

Dr Basit had challenged SC Deputy Registrar's decision of returning
his constitutional petition, seeking deletion of remarks against
Justice Qayyum and Justice Rashid Aziz by the SC bench in SGS case.
He has approached the Supreme Court for expunction of the remarks.

The counsel stated that SC official had wrongly interpreted a
Supreme Court judgment and added that the SC official had committed
contempt of court. He said that SC remarks had made difficult for
the two judges to perform their functions and his fundamental right
guaranteed under Article 18 of the Constitution had been affected.
He said that judges could not be removed by any other method except
mechanism provided under Article 209 of the Constitution.

He stated that, assuming for the sake of argument, that the
recorded conversation of Justice Qayyum with Saifur Rehman was
correct, the judges of the supreme court should have realized that
judges were being pressurized. He said that telephone of sitting
judges were still being taped and who knows that those would not be
used against them at an appropriate time. He said earlier attempts
to undermine the independence of judiciary failed because those
attempts were made from outside, but this time judicial institution
was stabbed by the members themselves.

Three paragraphs, he said, were inserted in the judgment which had
made difficult for the judges to continue their judicial functions.
When he asked the court to decide whether his appeal against the
order of Deputy Registrar was accepted, he was told to start his
argument on the merits and both the issues would be decided

AG hints at invocation of doctrine of necessity: Riba issue
Staff Reporter

ISLAMABAD, June 11: The attorney-general stated before the Shariat
Appellate Bench of the Supreme Court that if the judgment declaring
interest-based banking un-Islamic was not suspended, there might
arise the need for invocation of the doctrine of state necessity.

The three-judge bench, however, did not hear the case. It observed
that the Shariat Bench was not properly constituted and therefore,
it would not hear the UBL application seeking stay of the Supreme
Court judgment on the Riba issue. Aziz A. Munshi, the AG, requested
the court that the operation of the judgment be suspended as it
would create grave complications on June 30.

The AG stated that the budget was likely to be announced soon and
if the laws which the Supreme Court had found to be repugnant to
Islamic injunctions, ceased to exist on July 1, a "grave situation"
would arise in which millions of citizens might be affected. He
said in that situation the doctrine of necessity might have to be

The moment three-judge Shariat Appellate Bench took up the
application of the UBL seeking suspension of the Riba judgment,
Ismail Qureshi, an advocate from Lahore, raised objections on the
constitution of the bench. Justice Sheikh Riaz Ahmed, head of the
bench, asked the counsel to take his seat and the court was not
going to hear the UBL application as the bench was not complete.
Raja Akram, the UBL counsel, asked the court to fix the next date
of hearing as the matter was of "urgent nature and of utmost"
importance. He said the deadline of June 30, 2001, fixed by the SC
bench, was approaching fast and it would create a situation in
which a large number of laws would cease to exist.

The court, however, observed that the present bench was
"incomplete" and it was the government's duty to fill the vacant
post of a judge from among Ulema. The SC's Shariat Appellant Bench
which had heard appeals against the Federal Shariat Court
judgement, had consisted of five judges. They were Justice Khalilur
Rehman Khan, Justice Munir A. Sheikh, Justice Wajihuddin Ahmed,
Justice Maulana Taqi Usmani, and Justice Dr Mehmood Ghazi. Out of
these, only two are available in the SC, as Justice Khalilur Rehman
and Justice Wajihuddin Ahmed had ceased to exist as judge when they
refused to take fresh oath under the PCO. Dr Mehmood Ghazi had left
the Supreme Court to occupy the cabinet slot.

Under the Constitution, two posts for Ulema judges exist, but at
present there is only Justice Maulana Taqi Usmani. Justice Munir A.
Sheikh observed that if the government wanted extension in the time
of the deadline, it should file separate application in this
regard. The SC bench consisted of Justice Sheikh Riaz Ahmad,
Justice Munir A. Sheikh and Justice Maulana Taqi Usmani.

High Court moved Muttahida wants LB polls stayed
Staff Reporter

KARACHI, June 11: The Muttahida Qaumi Movement has filed a petition
in the Sindh High Court challenging the regime's city government
plan and has prayed for staying elections to all election-oriented
political and administrative bodies until new delimitations are
held on the basis of a fresh population census.

The petition in which the federation, the chief election
commissioner, the chief census commissioner, Islamabad, the Sindh
government, provincial Election Commissioner and National
Reconstruction Bureau (NRB) have been made respondents, would come
up on June 14 before a division bench.

The constitutional petition of the MQM has been filed by its deputy
convener Aftab Shaikh through counsel K. M. Nadeem, signed by
attorney Nawab Mirza. The Muttahida has prayed for directing the
respondents to hold a fresh population census in a just, fair and
transparent manner. It has also prayed for directing the federation
to comply with the mandate of the constitution enshrined in Article
2-A and 51(3) of the constitution, by making statutory provisions
for compulsorily holding population census after every 10 years or
within a reasonable time, thereafter in a fair and transparent
manner and publicise its results.

It also prayed for issuing a writ of prohibition, restraining the
respondents from holding elections/electoral exercise to all or any
election-oriented political/administrative bodies without first
holding a fresh population census and without delimitation of

The MQM also wants the delimitation of constituencies/ voting units
on the basis of such published results of the population census
before holding new elections. The MQM also wants re-allocation of
seats in the national and provincial assemblies and for the
proposed district governments on the basis of such published
results of the population census by ensuring "electoral equality"
and equal weightage of vote in the constituencies so delimited.

Benazir's India visit before summit
Monitoring desk

ISLAMABAD, June 10: Former prime minister Benazir Bhutto is likely
to visit India much before the forthcoming summit between Gen
Pervez Musharraf and Prime Minister Atal Behari Vajpayee.

"Bhutto would continue her efforts to go to New Delhi much before
Musharraf's proposed summit," sources in PPP said here on Sunday.
"Efforts are on to work out an invitation as well as dates for the
proposed visit at the earliest," they said.

"Despite the sentence, there is no change in her plans to visit
India," PPP media adviser Farhatullah Babar said here. "If anything
else, the sentence has redoubled her will to fight against the
subversion of democracy," he said.

Alliance for Restoration of Democracy team meets US, EU envoys
Staff Reporter

ISLAMABAD, June 13: The US ambassador in Islamabad William B. Milam
held out an assurance that the Bush administration was keen to see
an early return to democracy in Pakistan and would play an
effective role in this regard.

Talking to a delegation of Alliance for Restoration of Democracy
which met him at the US embassy he said every effort would be made
to ensure an early return to democratic order, lifting of curbs
from political activities and protection of fundamental rights.

The ARD team led by Nawabzada Nasrullah Khan included Javed Hashmi
and Saranjam Khan (PML), Makhdoom Amin Faheem (PPP) and Asfandyar
Wali Khan (ANP) also met a delegation of 10 ambassadors of European
Union in Pakistan. The ARD members apprised the US ambassador of
the political and economic situation including internal and
external conditions and urged him to put maximum pressure on the
military regime to hand over power to the elected representatives
after holding elections.

Referring to the recent invitation from Indian premier Atal Behari
Vajpaee the delegation said that only an elected leader could hold
talks from a strong position and hence it was all the more
necessary that such talks were held when the power is transferred
to an elected government.

The ARD expressed its willingness to enter into talks with the
military regime but only on mechanism of an honorable return of
army to barracks, restoration of constitution and establishment of
a democratic government in the country. In its meeting with the ARD
delegation, the European Union diplomats assured on behalf of the
EU that all necessary steps would be taken which led to the revival
of democratic order in the country.

Four bomb blasts in Karachi: ASI killed
Staff Reporter

KARACHI, June 13: A police official was killed and 17 people were
injured in four bomb explosions and firing incidents in the city.
The violence took place on the day of the strike called by the
Muttahida Qaumi Movement and Jiye Sindh Qaumi Mahaz to protest
against the police action on Sunday and against the water shortage
in the province.

Three blasts occurred in the evening in Clifton within the span of
an hour: first in a police mobile, second one at a garbage dump
near the Boating Basin and the third one at an eating house at the
Boating Basin roundabout. Earlier in the morning, a time-bomb
exploded near the Mereweather Tower. The city police chief said it
was premature to state who was behind the explosions.

Law on way to ban sectarian outfits
By Faraz Hashmi

ISLAMABAD, June 9: An ordinance, being drafted to curb sectarianism
in society, is likely to ban all the sectarian organizations, Dawn
reliably learnt. Apart from putting a complete ban on sectarian
organizations, the law would enforce stringent code of conduct for
Pesh Imams and religious leaders, particularly in dispensation of
religious services, an official said.

The law would restrict use of loud speakers only to Azan and Khutba
delivered during Juma and Eid congregations. Though speeches with
sectarian overtones would not be permitted under the law, a
provision would be made mandating submission of an audio recording
of the speeches delivered at mosques and Imambarghas to the local
administration, he said. The law would formulate regulations for
the religious processions as well.

It would also impose a ban on publication of pamphlets and
handbills or sale of cassettes containing material aimed at
whipping up sectarian sentiments, the source added.

CE wants new steps to combat sectarianism

ISLAMABAD, June 13: Chief Executive, directed the ministries of
interior, law & justice and religious affairs to urgently develop a
package of measures to combat sectarian terrorism including
introduction of a comprehensive law to deal with the menace.

The proposed measures including the draft law will be drawn in
consultation with the provincial governments and will be presented
for consideration of the federal cabinet in its next meeting, said
an official statement. The chief executive reiterated that no
individual or group would be allowed to fan hatred in the name of
sect or creed.-APP

Provinces voice concern at draft police law
By M. Arshad Sharif

ISLAMABAD, June 9: The provincial governments have expressed
reservations about certain provisions of the draft Police Ordinance
2001, which they say are likely to impinge upon independence of the
judiciary and provincial autonomy, sources told Dawn.

Earlier this month, the National Reconstruction Bureau sent the
draft of the proposed Police Ordinance 2001 to the provincial
governments, seeking their comments. The draft was sent to the
provincial governments after the federal law ministry raised
objections that the provinces should not be ignored on the law and
order matter, designated as a provincial subject by the

The sources said that concern had been expressed in regard to
sections 33(1)(a), section 45(2)(a) and section 69(1)(a) of the
draft ordinance, which proposed giving powers to the chief justice
of the Supreme Court and chief justices of the high courts to
appoint certain members of the planned national and the provincial
public safety commissions.

There was no need to involve chief justices in selection of
officers who were supposed to exercise executive authority, the
officials said, adding, that the element of separation of judiciary
from the executive had been ignored by the framers of the draft

Former speaker Gilani indicted
Staff Reporter

ISLAMABAD, June 11: The Accountability Court No III indicted former
speaker of the National Assembly, Yousaf Raza Gilani, for
corruption and misuse of powers and causing a huge loss to the
national exchequer.

The charge sheet stated that Mr Gilani had set up camp offices at
Lahore and Multan and had purchased 10 luxury cars worth Rs15.2
million for his personal use, burdening the national exchequer. The
court also summoned the prosecution witnesses for Wednesday after
Yousaf Raza Gilani denied the charges. The NAB had arrested the
former speaker on February 10, 2001 from Lahore. The charge sheet
said that despite the fact that the former speaker enjoyed the
facility of a hostel in Islamabad, still he ordered for furnishing
two rooms at the Ghazi Ilamdin Shaheed hostel which costed the
nation Rs172,000. Similarly, he set up another hostel at Multan,
the furnishing of which costed Rs110,000.

The bills of seven telephones he used amounted to over Rs3.6
million which were paid by the National Assembly secretariat. Of
these seven telephones, four were on his personal use while three
were official. The charge sheet also stated that a Toyota Corona
bearing registration number IDG3605, which was purchased at a cost
of Rs649,000 got damaged when it fell in a nullah by one of his
friends. Similarly, another Pajero vehicle (IDG6541) was reportedly

Former minister gets 9-year RI
Staff Correspondent

QUETTA, June 11: The Accountability Court No. I, Quetta, convicted
and awarded a total of nine years rigorous imprisonment and a fine
of over Rs23 million in two references to Haji Behram Khan
Achakzai, former minister for irrigation and power in two

According to the judgment announced by the judge of the
accountability court, Mohammad Anwar Kasi, in the first reference
pertaining to the misuse of government mechanical equipment,
including bulldozers and rigs as provincial minister, the court
found him guilty and awarded him seven years rigorous imprisonment
and a fine of Rs22,472,409.

The court ordered that the fine money should be recovered by
forfeiting the convict's movable and immovable properties, and in
case of default in the payment of fine money he would undergo an
additional two-year rigorous imprisonment. In the second reference,
Haji Behram Khan Achakzai, belonging to the JUI(F) and former
minister of the Jan Jamali-led coalition government, the court
awarded two years rigorous imprisonment and a fine of Rs1 million.
In case of default in payment of fine money he would further
undergo for eight-months rigorous imprisonment.

The second reference filed by Regional Accountability Bureau (RAB)
pertained to illegal allotment of shops of the Municipal Committee
Chaman. The allegations against him, that as chairman he had
allotted several shops illegally, were proved.

The learned court also disqualified him from holding any public
office and taking part in any election for 10 years. He was also
barred for 10 years from obtaining a loan or financial benefit from
any government bank or financial institution. Special prosecutor M.
S. Rakhshani, advocate, represented the Regional Accountability
Bureau in the court.

Govt to opt for huge domestic borrowing: 2001-02 fiscal year
By Ihtashamul Haque

ISLAMABAD, June 9: The government will resort to massive domestic
bank and non-bank borrowing to generate Rs250 billion for new water
resources and important infrastructural development projects during

The National Economic Council (NEC), was confronted with the
current tough resource position and reached the conclusion that
without opting for both bank and non-bank borrowing, it was
difficult to address serious issues like water shortages and
funding for significant development projects. Official sources said
the NEC was informed that the IMF was not likely to object to huge
domestic borrowing what was termed "crucial funding requirements".
The capping on monetary expansion will significantly be removed
during the next financial year with a view to securing formidable
domestic borrowing.

The sources said that the finance ministry and the Planning
Commission could not satisfactorily identify new resource
mobilization sources that was why it was decided that the
government has no option but to go for unprecedented domestic
borrowing to manage its affairs during the next financial year. It
was decided that the government would acquire funds by issuing
bonds on behalf of various organizations. These bonds, the sources
said, will carry handsome profit.

NEC, approved the idea of big domestic bank borrowing. However, NEC
conceded that by seeking huge bank or non-bank borrowing the
domestic debt was bound to increase.

NFC to work out fresh arrangement: Resources distribution
By Sabihuddin Ghausi

KARACHI, June 13: The federal government is convening the first
meeting of the National Finance Commission (NFC) on July 8 to work
out a fresh arrangement for national resources distribution between
the federation and the provinces and among the provinces for next
five years from 2002-2003 to 2006-2007.

Well placed sources in Sindh government said that the provincial
committee on the NFC is also meeting in Karachi in the first week
of July to prepare a strategy for the NFC deliberations.

This committee, according to the sources, will elicit views of
businessmen, agriculturists and other sections of the population in
the province to articulate Sindh's position on the issue of
national resources distribution in the NFC meetings. "No official
document to spell out Sindh's position on the national resources
has been prepared as yet," well placed and authoritative sources in
Sindh government informed Dawn.

Petrol prices up by 14.5%: Deregulation from July 1
By Khaleeq Kiani

ISLAMABAD, June 13: The government increased petroleum prices by
9.4 per cent to 14.5pc with immediate effect and authorized Oil
Marketing Companies (OMCs) to adjust these prices on a fortnightly
basis from July 1.

Petroleum Secretary M. Abdullah Yousaf said the revision had been
approved by the cabinet and added that it was the last time the
government was announcing the petroleum prices. Referring to the
deregulation of prices, he said it was a "big step" towards
deregulation of the petroleum sector. The cabinet decision involved
four aspects: increase in petroleum prices, authorization of the
OMCs to fix future prices, change in internal freight equalization
margin to link local refinery prices to those fixed by the OMCs,
and replacement of petroleum development surcharge with a petroleum
levy on the product basis.

The secretary said that in addition to the product-wise fluctuation
in international prices, the government had taken into account
3.84pc devaluation of currency during the March-May quarter to fix
the new prices.

The new prices would be applicable to 29 depots in various parts of
the country, and consumers would be charged after adding the
transportation cost (from the depot to the retail outlet) to the
prices, ranging from 6 paisa per litre to Rs1.90 per litre.

State Bank gets $350 million from World Bank
Staff Reporter

ISLAMABAD, June 14: The State Bank of Pakistan received $350
million disbursed by the World Bank as Structural Adjustment Credit
(SAC). "Yes, the amount of $350 million has been disbursed to us by
the World Bank," confirmed the SBP Governor Dr Ishrat Hussain.

Talking to Dawn by telephone from Karachi, he said that the new
World Bank concessional loan will further help improve the
country's foreign exchange reserves. Responding to a question, the
State Bank governor denied that the central bank had asked the
bankers to cap the inter-bank rate at Rs63 viz-a-viz the dollar.
Nevertheless, he said the central bank had warned the bankers not
to indulge in speculation due to which there were problems in the

Riba deadline frozen by a year: SC refuses extension till 2005
By Rafaqat Ali

ISLAMABAD, June 14: The Supreme Court extended for one year the
deadline for the implementation of its judgement which had declared
all forms of interest-based banking un-Islamic.

The deadline, which was to expire on June 30, was extended to June
30, 2002, with another possible extension if the government showed
sincerity in the implementation of the judgement.

No interest-based transactions from July 1
By Shujat Ali Khan

LAHORE, June 12: Besides leaving the government with 17 days to
bring about a radical transformation of the national economy,
Monday's proceedings in the Supreme Court betray a highly
reprehensible carelessness about matters of crucial importance.

As the law stands today, Pakistan is bound to shun all interest-
based transactions from July 1. It cannot negotiate, least of all
accept, any loan carrying interest. A number of laws, including all
enactment�s relating to banks and recovery of loans, the Insurance
Act, the Savings Banks Act, the Civil Procedure Code and SBP Act,
shall have to be extensively amended to replace the existing
financial system with an interest-free economy.

Commercial banks will no longer be able to extend loans on the
basis of mark-up, which has been held un-Islamic. The so-called
profit-and-loss accounts will come to an end. Savings certificates
will not fetch fixed profit and will all become 'units of a mutual
fund'. The prize bonds schemes will cease to exist. The government,
in short, will neither pay nor charge interest on domestic
borrowings in any form. Contractual obligations in respect of
existing foreign loans will be discharged but an effort will be
made to renegotiate them without seeking any interest-bearing loan
after July 1.

The reconstitution of the bench presents no problem but the scope
of review being restricted, the UBL petition is unlikely to result
in any material change. The government may at best seek extension
of time-limit as it repeatedly did in separating the judiciary from
the executive at the magisterial level. However, insofar as the
constitution is concerned, there is no provision even for a review.
As for extension, time frame is of the essence of the SC judgement.

A financial emergency can be proclaimed under the constitution but
not to prevent or delay the enforcement of a court order. The
government may have to fall back upon 'the law of necessity' as
indicated by the attorney- general on Monday.

Sindh manages to collect 85% of targeted revenue
Staff Reporter

KARACHI, June 14: Mainly due to improved collection from stamp
duties and the infrastructure fee in the present fiscal year, Sindh
government has been able to achieve about 85 per cent of Rs 7.25
billion, provincial revenue target.

Persistent drought and water shortage in large parts of the
province, coupled with total confusion about the enforcement of
agricultural income tax are the factors responsible for meager
recovery of tax from farmers this year. The budget projection of
Rs850 million tax from farmers and Rs 800 million Abiana
(irrigation service charges) remain unrealized to a large extend.

The provincial excise and taxation department is given the task of
collecting 12 taxes with a target of Rs 4.14 billion. In last ten
months it has collected Rs 3.61 billion which is about 87 per cent
of the target. Infrastructure fee is fast emerging as one of the
leading provincial revenue earner for Sindh. Officials claim that
the total recovery from this levy in last ten months amounts to Rs
1.27 billion, as against an original target of Rs 1 billion.

Officials are confident that infrastructure fee collection would
touch Rs 1.50 billion by end June and would be one of the leading
revenue earner for the province in the coming years. Indicated
recovery from this source in the current fiscal is about Rs 2.5

"If exploited professionally and honestly, stamp duties with much
lower rates than now, have the potential to generate more than
three times of the current collection", a source said.

Infrastructure fee is an innovative levy enforced and collected
only in Sindh since 1995. This tax was introduced by the Advisor to
PPP Government in Sindh on Finance and Development Syed Asad Ali
Shah. It is recovered at the rate of 0.05 per cent of all the
import invoices.

The budget documents project motor vehicle tax collection at Rs 900
million, out of which the Excise and Taxation Department has
recovered Rs 706.79 million in ten months. Property tax is another
major source which generated Rs 717.85 million as against a target
of Rs 1 billion.

One of the major source of revenue is licensed wine stores in the
province. The area police officers harass the owners of wine
stores, many of whom have closed down their business. The total
recovery of tax from wine stores is Rs 543.56 million as against a
target of Rs 900 million.

The department has also collected 60 to 85 per cent of paddy
development fee, professional tax, cotton fee, hotel tax and bed
tax on hospitals. Tax on marriage halls and license fee on video
shops were abolished two months after the budget.

Ishrat warns against money laundering
Staff Reporter

KARACHI, June 14: State Bank Governor Dr Ishrat Husain warned banks
that they should not become conduit for money laundering. "I would
not pretend that it is not there. I know it has been happening,"
said the governor referring to money laundering in Pakistan.

He said banks must be extremely careful in transacting businesses
making it sure that they do not have an element of money
laundering. He said the State Bank would have to have a full police
force if it had to check money laundering through conventional
methods. So he asked banks to start self-policing not only to check
money laundering but also to ensure that they do not indulge in any
unethical practices. He warned banks that they should not allow
themselves to be used as a conduit for over and under invoicing;
flight of capital and money laundering-even if it means loss of

He also warned heads of banks particularly those of state-run banks
that they should not try to win support of one government or the
other and focus on their professional responsibilities.

Rs 212 million at source deduction by WAPDA irks NWFP
By Intikhab Amir

PESHAWAR, June 9: WAPDA has deducted at source Rs212 million from
the NWFP's electricity duty account, official sources told Dawn on
Saturday. The move has prompted a quick reaction from the
provincial government which, according to sources, in an official
communiqu� to WAPDA has disputed the move.

"WAPDA has deducted the amount without giving any details with
respect to the bills against which the settlement has been made or
the names of provincial government's entities whose dues have been
adjusted," said official sources. Sources said that the province
had asked WAPDA to provide details of the bills against which the
adjustment has been made and the exact position with regards to the
annual collections it has made against the electricity duty on
behalf of NWFP.

Political economy of Pakistan's foreign debt
By Dr. Izzud-Din Pal

It should come as no surprise that serious reservations are being
expressed in the media of Pakistan about the role of the
International Monetary Fund (IMF), the World Bank, and other
organizations associated with the country's economic affairs.

What is important to note is that the critics belong to various
shades of opinion, ranging from social democrats to those who are
on the religious right.

The track record of these institutions in solving financial crises
in the world, be that in South East Asia, Latin America or Africa,
does not allow much comfort concerning their latest tricks in this
country. Whether their objectives are based on "Washington
Consensus" or "Prague Consensus" makes no difference. It is the
same vinegar under different labels.

One cannot blame the mess that Pakistan has inherited on the IFIs,
however. Their involvement in the meantime has become deeper and,
starting in 1993, the country has been locked in a long-term
comprehensive commitment with them. That should have been a wake-up
call but the leaders remained either blinded by hubris or
intoxicated by a "heavy mandate" to realize the gravity of the
situation. This indifference was paralleled often by the efforts of
the bureaucrats to fudge data and to exaggerate projections. The
growing financial crisis turned into a crisis of confidence, from
the donors' point of view.

One cannot of course deny some of the progress made under pressure
from the IFIs such as improvements in efficiency and productivity
in the banking sector, and in manufacturing and agriculture.
Pakistan, however, did not need outside pressure to take necessary
steps in this direction. Several home-based experts were giving
warnings about these and other related issues facing the economy
but they were ignored. Now the country is confronted with a serious
dilemma about the social consequences of adjustment measures. This
is a repetition of the story from many other countries that have
dealt with the IFIs.

The literature on this subject is rich and growing. Dr Shahrukh
Rafi Khan in his book entitled "Do World Bank and IMF Policies
Work?" (Macmillan, 1999) has examined both the questions of the
assistance of the IFIs and their social effects with reference to
Pakistan. I would like to add another perspective to the issue.

The IMF position is quite clear. Pakistan must correct its
macroeconomic situation, and in order to do so, it must maintain
the sustained strong-demand management policies and fully adhere to
the structural reform agenda in order to achieve its growth targets
over the medium term. Behind the jargon, it is a call to adjust the
economy in the direction of achieving external and internal balance
in line with the model. For the former, the country must pursue a
"genuinely flexible exchange rate" along with free capital
mobility, and to achieve the latter, it must remove all barriers in
the working of the market mechanism as defined by the IFIs.

In other words, prices of goods and services must not be disturbed
by the evil influence of subsidies or regulations. All this should
be accomplished under the umbrella of "good governance"-a concept
that carefully defines the role of the state so that it is strictly
confined to establishing effective law and order and protecting
rights of individuals and business contracts.

It is in this context that the recent reports of the two committees
on taxes and debt should be examined. The recommendations for tax
administration have successfully underlined the basic problems:
difficulties concerning assessment and collection of taxes and
diversion of a part from the collected revenues into the pockets of
the intermediaries. How taxes are administered is very important
but the issue goes beyond that. In the advanced societies, there
are no angels among taxpayers and tax collectors, but the leakage's
are usually minor, occasional, not recurring. The tax collector
does his job efficiently and is quite willing to help the people by
advising them about possible exemptions hidden in the maze of
taxation manuals, to minimize their tax burden. And the taxpayer
gives up a part of his income according to his perception about how
and why "his" money is used by the government.

The report on debt management envisages that by the year 2004, the
country can meet its debt obligations mainly through aid flows,
with some income from divestment of government operations. The
recommendations of the committee have been received with a mixed
reaction about its assumptions. I do not wish to repeat these
arguments here. I am, however, puzzled by the emphatic tone of its
advice to the government asking it to pursue the IMF-sponsored
adjustment and structural reform "single-mindedly".

It is not a matter of ignoring resistance from labor unions and the
redundant public employees, as the report suggests. It is a
question of social consequences of the IFIs conditions. If the
government decides to follow the conditions, knowing fully well
that it would be redesigning the economic and social system of the
country, then it would not be done for the first time by a military
regime in the country.

To generalize from my above observations, it is a question of
credibility of the political system and it has been in disarray for
a major part of Pakistan's existence. It is a sad fact that the
military has been involved in the politics of the country since
1953, promoting or demoting political leaders, directly or
indirectly, with long interludes of direct rule by the generals in
co-operation with their senior commanders. On each such occasion,
they were able to find a cause to legitimize their action and
sustain their power.

Ayub Khan was able, for example, to ride over the wave of the
"developmental state" with the trickle-down goodies promised by his
advisors who were men of sincere convictions, and in their efforts
to reconstruct the economy, they followed the methodology that was
in vogue during that period but the results were mixed at best.
General Ziaul Haq was lucky to seize on the Afghan war, reinforcing
his rule through a shrewd blend of his brand of Islamic reform.

About General Musharraf's regime, it is too soon to draw a
meaningful conclusion. The straws in wind point to an uncertain
performance at the present time. The accountability process has not
yet created any major tangible results. The exile and pardon of
Nawaz Sharif has weakened the original claim for the coup. The
other leader under the shadow continues a comfortable life in self-
exile, pontificating on the national issues. The recovery of loan
defaults has been quite inconclusive. About all, the devolution
plan does not seem to have aroused any widespread enthusiasm in the
country, perhaps because of a mood of deja vous with reference to
Ayub Khan's basic democracies.

The Shariat Appellate Bench has presented the General with a
"landmark" verdict on riba even though the parliamentary system
remains in abeyance. But then Ziaul Haq successfully practiced the
art of bringing Islamic reform through fiat. It is also reported
that the busy-body minister of religious affairs in the Musharraf
government is preparing draft legislation to introduce Pakistani
brand of Saudi moral inspectors. How would that jibe with the
Chicago model where rational behavior in economic activity is
determined only by the market forces?

The government is working under a deadline, however. Its exit
strategy will have an impact on the economy. The pros and cons of
presidential versus parliamentary rule is a controversial issue; it
may not have as serious an implication for the economy as that
concerning the rumored establishment of the national security
council. Unless there is a strong political representation, a forum
such as the council would be a partnership of unequals. It is
understandable that the military wants to preserve and protect its
interests, economic and strategic, but there is a need for
transparency and fairness in the distribution of privileges,
economic and political. Can Pakistan produce new and strong
political elite? This question cannot be answered unless the nation
is given an opportunity, followed by more opportunities, to hold
free and fair national elections.

What people need are a perception and a sense of participation in
the affairs of the state. It is the sine qua non of what, for the
lack of a proper term, is called economic growth. The latest trend
in the theoretical discussions on the subject is to admit how
little we know about this phenomenon. It is because the economist,
in my view, has used blinkers of assumptions and stylized facts to
draw conclusions about the "crucial" factors responsible for
accelerating development. The process is much larger than the
canvass of the economist, trained in the narrowness of the field,
can accommodate.

The general model breaks down when we notice variations around it.
China is a complex case, worthy of a very careful study. The East
Asian "tigers" grew in the framework of the US foreign policy,
accompanied by centrifugal technology which allowed production
process to spread out from the home base. The colonial Hong Kong
responded to a different challenge, and the city-state of Singapore
under a patronizing Lee Kuan Yew became a technical powerhouse.
Closer to home, several states in India seem to present interesting
examples of successful growth-promoting strategies. Kerala, for
example, decided decades ago that the well-informed and well-
educated citizen is the only permanent asset in the society. There
is no reason for Pakistan not to be able to accomplish its goals,
if it would observe the path that was planned at the time of its

I would conclude with the following points, touching upon some
sacred cows of the Chicago model, and hope that they would receive
serious consideration as part of the agenda for the exit strategy
of the military rule:-

1. Foreign capital: Pakistan cannot afford the luxury of
unregulated movement of short-term (speculative) capital under the
present circumstances.

2. Exchange rate: The rupee has gone through many pressures,
including the changes in currencies in the Asian region. It seems
that further creeping devaluation's would become self-defeating.
Export prices have a tendency to adjust to the new (expected)
parity, neutralizing the advantage in the external value of the
currency. The studies done on the export performance seem to
support this contention. Also, those who do empirical work on world
trade would recognize that sometimes export performance can only be
explained by what may be called the comparative political
advantage. Concerning imports, I do not see any reason why some
obvious non-essential imports cannot be banned in order to conserve
the hard-earned foreign exchange.

3. Agriculture: It is not too late to bring about a meaningful
reform in the agricultural sector of the country. It would be a
mistake to minimize the importance of agriculture for the future of
Pakistan. The so-called high-tech advanced economies jealously
guard their agricultural sector and aggressively protect it in
their foreign economic policies.

4. Education: The country needs to provide its citizens with modern
education, not only in natural sciences but in social sciences and
humanities as well. The present system of madaris cannot accomplish
that goal, even with some introduction of modern curriculum. The
need is to develop an attitude of mind that promotes inductive
approach to problems of life. That will be possible only if the
curriculum is liberated from the thick shadows of Imam Ghazali. In
the universities, it is important to set higher standards for
research and publications, a goal that cannot be achieved without
giving a real sense of dignity and freedom to the scholars. At
present, there are only pockets of solid scholarship, oases of
intellectual activity against enormous obstacles.

5. Poverty: The only effective means to alleviate poverty is to
increase economic growth that is equitable and pro-poor. The
Chicago model would permit giving entitlement and property rights
to the under-privileged. That may or may not be an important factor
in promoting development. China has managed a remarkable economic
progress without conventional property rights. However, China was
not able to reduce inequalities through economic growth in its
sophisticated cities. That impetus came from rural development in
the 1980s, which cut the poverty rates. One could still argue that
in the informal sectors, introduction of insurance, limited
liability, and marketing that accompany property rights would
produce appropriate results in a country such as Pakistan. One
needs not cast doubts on the property rights, in order to emphasize
that the state has the responsibility to correct market
imperfections and to implement social programs. Health, education,
basic needs and shelter cannot be left to the market forces.

Self Assessment Scheme allowed to public companies
By Khaleeq Kiani

ISLAMABAD, June 10: The government has decided to extend "Self-
Assessment Scheme" to all the public limited listed companies,
banks, financial institutions, leasing and modaraba companies in
the fiscal year 2001-02.

The legislative and administrative measures to strengthen Self-
Assessment Scheme (SAS) would be introduced through the Finance
Ordinance 2001 that would give legal cover to the budget 2001-02,
documents made available to Dawn reveal.

Central Board of Revenue Chairman Riaz Hussain Naqvi has claimed
that International Monetary Fund, the finance minister, the
Committee to Revise Income Tax Ordinance (CRITO) and the CBR itself
have approved these new measures which would be released as part of
the budget document.

In view of the revenue risk and limitations of section 59 of the
Income Tax Ordinance, the scheme would be applicable to all persons
and cases except public companies and companies engaged in the
business of banking, leasing and modaraba in the assessment year
2001-02 and the law would be amended to provide for all embracing
permanent self-assessment for the assessment year 2002-03.

The CBR would provide elaborate disclosure requirements for banks,
leasing companies and modarabas to ensure that they provide correct
statements and do not hide facts because they were the largest
revenue spinners, claimed the CBR chairman.

For the audit of these companies separate enabling provisions will
also be made whereby the income tax commissioners would be
empowered to select, for any reason, any of these companies or
banks for audit. Their audit will not form part of general random
and parametric selection for other ordinary business.

The CBR will also prescribe, for revenue consideration, a minimum
of 10 per cent increase over the last assessed or declared income,
whichever is higher, for the assessment year 2001-02.

However, public limited companies, banks, financial institutions
would not be subjected to parametric selection for audit. For main
revenue spinners or the largest tax dodgers like textiles, the
commissioners would be empowered to select any company for audit,
for any reason. It would be specifically incorporated in the scheme
that selection for total audit should be made through computer
ballot on random or parametric basis and the formula for selection
of cases should be confidential as per universal international

The IMF, the tax reforms committee and the CBR have also agreed
that self-assessment would be available only to those who
maintained minimum prescribed accounts. The announcement to this
effect would be made in the Finance Ordinance 2001 so that tax
payers get notice in advance.

The requirement of accounts on the pattern of accounts prescribed
for sales tax with emphasis on filing stock inventory has been
incorporated in the scheme.

The accounts to be prescribed for each category would be notified
before June 30, 2002.

World Bank decides to give $60 million for SAP
By Ihtashamul Haque

ISLAMABAD, June 11: The World Bank has decided to extend 60 million
dollars to Pakistan for the Social Action Program (SAP-II). We will
immediately process disbursements for the withdrawal applications
that have been submitted to us", says Abid Hasan, Acting Country
Director of the World Bank for Pakistan and Afghanistan. "I wish to
record our appreciation for all the federal and provincial
governments' staff who have made this happen", he added.

In a letter, dated June 7, to the Secretary-General, Ministry of
Finance, Moeen Afzal, Mr Hasan said that the withdrawal
applications currently with the Bank, amounted to approximately 60
million dollars and would be disbursed from the EC Trust and the
IDA credit.

The government was informed that the World Bank was ready to
discuss any detailed questions regarding the status of individual
sub-program disbursements.

Exports grew by 7.24% during July-May: FBS

KARACHI, June 12: Country's exports grew by 7.24% during July-May,
2000-2001 to $8.249 billion against $7.693 billion during the same
period of last year. According to provisional data released by the
Federal Bureau of Statistics (FBS) on Tuesday, exports from
Pakistan during 11 months of this fiscal stood at Rs 478.715bn
compared to Rs 398.084 billion during the same period of 1999-2000,
showing an increase of 20.25%.

Exports during May 2001 increased by 7.83% to $793.146 million over
April, 2001 when recorded at $735.579 million and by 4.36% compared
to May, 2000 $760.011 million. In rupee terms, export amounted to
Rs 49.040 billion in May 2001 compared to Rs 44.920 billion in
April, 2001 and Rs 39.367bn during May, 2000 showing an increase of
9.17% over April, 2001 and 24.57% over May, 2000, respectively.

Similarly, imports during July-May, 200-2001 totaled at $9.798bn as
against $9.296bn during the corresponding period of last year,
showing an increase of 5.39%.In terms of rupees, imports valued at
Rs 567.967 billion in 11 months as against Rs 481.065bn during the
corresponding period of last year showing an increase of
18.06%.Imports into Pakistan during May, 2001 amounted to Rs 58.017
billion compared to Rs 50.008bn in April 2001 and Rs 49.354bn
during May, 2000 showing an increase of 16.02% over April 2001 and
17.55% over May 2000.

Based on the above provisional figures of imports and exports the
balance of trade in May, 2001 was (-) 8,977 million in terms of
rupees and (-) 145.204 million in dollars. The balance of trade
figures cumulative from July , 2000 to May 2001 were (-) 89.252
billion in terms of rupees and (-) 1.548bn in dollars.-APP

PIBs sale short of target: Fallout of hike in TBs yield
By Mohiuddin Aazim

KARACHI, June 15: Institutional investors showed little interest in
10-year Pakistan Investment Bonds apparently due to recent hiking
of short-term treasury bills yield that has made the bonds less
attractive for them.

The State Bank could sell only Rs 4.3 billion worth of bonds
against the target of Rs 12 billion. SBP had received Rs 4.6
billion bids of which it accepted bids worth Rs 3.4 billion and
scrapped the rest. As usual SBP advanced no reason for rejecting
the bids but as all the rejected bids were far below par value most
bankers say the rejection indicated that SBP was not ready to sell
the bonds at extremely low prices.

Despite that it was for the first time since the launching of the
bonds in December 2000 that the central bank sold them not only at
par or on premium but also at discounted value. Bankers said the
State Bank sold Rs 3.8 billion bonds at par and Rs 500 million
bonds at slightly discounted price i.e. for Rs 99.80 per Rs 100.

This means that SBP raised the yield on Rs 500 million bonds from a
fixed 14 per cent to 14.03 per cent. Bankers say this otherwise
negligible rise in the yield has a symbolic value. Bankers say SBP
should not desist from hiking up long-term interest rates if it
continues to defend the rupee by enhancing discount rate and T-
bills rate.

Back to the top
Allah be praised!
By Ardeshir Cowasjee

HELD in Bangladesh, at Dhaka, on June 1 and 2 was the South Asian
Conference on Fundamentalism & Communalism: Role of Civil Society.
Two participants from Pakistan were Air Marshal Asghar Khan and
Educationist Hamza Alavi, both of whom delivered strongly worded
papers on how this malaise affects Pakistan.

The Air Marshal's theme was universalism and the inability of the
Muslim countries to come to grips with the modern world, adapt to
it, and learn to live in and with it. The ideas of human liberty,
equality and fraternity, the democratic belief that all men are
equal in rights and obligations, and the promotion of rationalism
and scientific thinking do not sit easily with adherents to the
Muslim faith.

As said Asghar: "The simple idea of human liberty and settling
issues by rational means, employing scientific modes of thinking
has escaped Muslims. Unless this deficiency is removed there can be
no hope for their progress." As is so amply illustrated by the
examples of Pakistan and its unfortunate creation, the Taliban:
"Orthodox ulema preach against rationalism and liberalism. They
represent today forces and tendencies that have kept Muslims weak,
divided and backward. They actually operate as a priestly class
that demands special privileges."

He touched upon the modern phenomenon of the establishment of
Islamic states, a concept that came into existence in the 20th
century, brought on by some form of insecurity. For in earlier
years, Islamic scholars of all sects were at ease with the various
political systems and rulers of their countries. Islam was not
proclaimed to be in conflict with kings, presidents, dictators,
heads of government. It existed in tranquillity, at peace with the

The Khomeini revolution and the Taliban have established the rule
of the clergy, a concept foreign to the basic tenets of pure Islam.
Religion has evolved into a weapon in the hands of unscrupulous
corrupt men hungry for absolute power. As said the Air Marshal:
"Unless Muslims learn the simple principle of not allowing
individuals, whether mullahs or generals, to use religion for their
own benefit, troubles will continue". This, we here in Pakistan,
have learnt to our cost.

The strife between the Muslim world and the rest of the world is a
no-win situation. The Air Marshal's final summation: "There is a
lot of learned discussion of what are western values and what are
eastern norms. Europe and the West have no proprietary rights over
ideas such as equality, liberty and fraternity or social justice.
They belong to the whole world and underpin modern civilization...
they belong to all of us. Human values and rights are universal. An
idea is not a geographical entity. No matter where it was born, it
belongs to all mankind."

Hamza Alavi's concentration in his paper, The rise of
fundamentalism in Pakistan, was on how this bogey has overtaken
Pakistan's society and politics, slowly and surely. Uneducated
bigots in the form of mullahs and maulanas, who wave a gun in one
hand and the Quran in the other, have been pandered to by our
unscrupulous politicians who have used these fanatics to promote
their own aims and intents.

Ziaul Haq is of course the bete noire who really knew how to
manipulate religion and its dangerous unstable leaders. He was the
one who brought them to the fore, into prominence, and gave them an
importance which has so damaged this country, its economy, its law
and order and its image.

However, Alavi dates the misuse, abuse and exploitation of religion
for political ends back to the days of the country's first prime

When Liaquat Ali Khan moved his Objectives Resolution in the
Constituent Assembly in 1949, nowhere in it was contained the word
'Sharia', nor did it advocate the imposition of an Islamic rule. It
merely stated "Muslims shall be enabled to order their lives, in
the individual and collective spheres, in accord with the teachings
and requirements of Islam...". It also provided for non-Muslims to
"freely profess and practice their religions". Liaquat maintained
the traditional secularism of the Muslim League, and of its true
leader, sadly by then dead, Mohammad Ali Jinnah.

But he shortly afterwards changed his position, putting away the
traditional secular stance as his political base became threatened
by splits in the Punjab League, the true base of power. Daultana
and Mamdot were in conflict; Mamdot quit the League and formed his
own party. Liaquat panicked. He further panicked at the situations
in East Bengal, Sindh and Balochistan, where powerful movements had
arisen against what was felt to be Punjabi domination. Regional
autonomy and fairer shares were demanded. Unrest was rampant.

So, according to Alavi, he grabbed at the straw of Islamic rhetoric
; he was the first to wave the banner 'Islam in danger', a banner
that has been waved down the years whenever one of our tinpot
despots in or out of uniform have wished to consolidate themselves
or attempt to hang on to waning power.

Liaquat abandoned Jinnah's stand, and his own former stand, against
any form of pandering to the religious right. He laid the path. In
a way he institutionalised the abhorrent practice. He gave the
mullahs "a visible public role, but without any real share in
power". He established a Board of Talimaat-i-Islam to provide jobs
for the senior ranking mullahs, the ulema. "But the Board was to be
no more than a facade for the new found religious rhetoric of
politicians". Thus it came about over 50 years ago, and has been
with us ever since.

The next manifestation of the cynical exploitation of religion
through its blind zealots was the anti-Ahmadi riots in Punjab,
engineered by Chief Minister Mumtaz Daultana for reasons which
Alavi declared were too complicated and far too lengthy to be
related at the conference.

Then we come to General Yahya Khan's years, when surprisingly
religiosity and religious rhetoric again reared its ugly head.
"General Sher Ali redefined 'Pakistan ideology' as 'Islamic
ideology'", the Yahya government's primary concern being to
delegitimize the growing, threatening Bengali nationalism. We all
know where that led.

Along came Zulfikar Ali Bhutto, who "misguidedly decided to exploit
religious ideology" and whose "foolish populist rhetoric" stirred
the mullahs into action. As said Alavi, therein lay the seeds of
his own self-destruction and the coming to power of Ziaul Haq, the
subsequent 'Islamization', "the crude and cruel distortions of
Islamic teachings", Shariat courts (the equivalent of which exist
in no other Muslim country), and many other perversions.

Zia, of course, claimed to have a direct line to the Almighty by
whom he declared he had been appointed. He was helped along by the
Afghanistan situation and the consequent proliferation of militant
mind-numbing deeni madaris, wherein lay the seeds of the Taliban
menace which now hangs over us like the legendary sword of
Damocles. Pakistan was totally transformed, openly in thrall to the
mad mullahs.

Alavi dwelt on the matter of the most damaging decision so far
taken by the Shariat courts, "manned by persons who hold rigid
religious views" - the abolition of interest in all its forms to be
achieved by the end of this month. "No enemy of Pakistan could have
devised a more potent weapon to destroy the country," he said, with
reason. Now, on Thursday, UBL filed an application in the Supreme
Court seeking a stay on the Shariat Court order and all we can hope
is that law, justice and, above all, sanity will prevail.

Hopefully, General Pervez Musharraf having spoken as he spoke at
the Seerat conference on June 5, Alavi's statement that "the
present government seems paralysed in the face of the diehard
religious lobby" no longer holds true.

It may be that at last the generals, in their combined wisdom, have
realised that the Republic of Pakistan and its people can no longer
be held hostage, as Musharraf put it, by a minority of
obscurantists intent on dragging them backwards into the dark
ages.Musharraf has declared his willingness to meet the Indian
premier, Atal Behari Vajpayee, at any time, at any place. Wise
Vajpayee has extended a hand of friendship which Musharraf has
gracefully accepted. Much cannot be expected from the first meeting
but even if it ends with each saying to the other, 'Glad to have
met you and hope we meet again soon', it will be an achievement.
The general should not take with him any of those misguided beings
with fixed, set, unbendable minds.

And as for his foreign minister, what can one say about him other
than to quote from a news item of June 9? Reportedly, on June 8,
Abdul Sattar, foreign affairs expert, sent a congratulatory message
to Robin Cook, the former British foreign secretary: " ... I look
forward to working with you for improvement of our bilateral ties
in all fields."

Jack Straw was appointed British Foreign Secretary on June 8.

Pakistan's Khatimids: eyeless across the waters
By Ayaz Amir

Twice with huge majorities have the people of Iran elected Muhammad
Khatami as their president in the hope that he would roll back the
influence of the Iranian clergy and usher in an era of reform and

To his supporters his first stint in office was a disappointment
because he lacked the power to implement his policies or put flesh
on his good intentions. It is still too early to say how his second
term as president shapes up. But the signs are not auspicious, for
he remains a hobbled president, his popularity not underpinned with
real power. The army and the judiciary continue to be in the grip
of the conservative elements who look to Iran's spiritual leader,
Ali Khamenei, for guidance.

How different the situation in Pakistan. The glory and reality of
power unite in General Musharraf's person. Notwithstanding his
insatiable appetite for official briefings, he is his own spiritual
guide and philosopher and his own implementer of policy. The only
college of cardinals he has occasionally to defer to is the corps
commanders conference but with the hierarchical principle embedded
firmly in the Pakistan army's psyche, this deferment is often more
nominal than real. What the Chief, in closet confabulation with his
closest colleagues, proposes is what becomes official doctrine and

With major-generals, brigadiers and colonels virtually swarming out
of the woodwork and spreading over different layers of the
administration, the bureaucracy is cowed down and demoralized. What
remains of its spirit is gradually ebbing away at the prospect of
the administrative changes likely to be wrought in the name of
devolution. Every military dictatorship in Pakistan hitherto was a
partnership between the army and the bureaucracy. By putting army
officers everywhere and pushing the bureaucracy into a subordinate
position General Musharraf's dispensation is breaking new ground in
this regard.

The political parties are lost, the Sharifs in darkest limbo, Ms
Bhutto in desperate straits, the Alliance for the Restoration of
Democracy more a collection of comic characters than a coalition to
be taken seriously. The plight of the politicians is not the stuff
of legend or resistance but a study in despair. All previous
military dictators had to contend with vibrant opposition parties.
Musharraf was handed their irrelevance on a platter. Nor did he
have to do anything to earn this advantage. When he arrived on the
scene such was the performance of the political parties during the
previous ten years that they had already played themselves out of
the reckoning.

Judge of the military government's strength by some other
yardsticks. No political government could have put Dr A. Q. Khan,
Pakistan's self-promoting Oppenheimer, out to pasture. No political
leader could have bearded the maulanas in their den the way General
Musharraf did on the occasion of the Prophet's birthday when he
asked the assembled doctors of the faith to heed the lessons of
realism. No political government could have so faithfully followed
the IMF's prescriptions of economic belt-tightening as the
Musharraf government has done.

In contrast to Khatami's powerlessness, so much power then at
Musharraf's disposal. But to what uses has this power been put? Mao
extolled the virtues of a clean sheet of paper because on it the
most exquisite drawings could be sketched. On the relatively clean
slate Musharraf got what has he been able to draw?

Certainly, the army faces handicaps, not least in the shape of the
economic crisis the country faces. With Pakistan crushed under
debt, there is no money to go around, no money to spend on welfare
projects. But this precisely is the test of leadership: to make the
best of scarce resources. Other countries have faced severer
hardships than anything experienced by Pakistan. But they have met
them with fortitude: made hard choices, cut down on flab and
concentrated on essentials.

The effects of the US trade embargo are visible in Cuba. What would
be shiny elsewhere in Cuba gives a rundown appearance. But
revolutionary Cuba made its choices long ago. While no one there
starves, the standard of living for ordinary Cubans is not high.
There is certainly little of the tacky consumerism that passes for
prosperity in most other countries. But then Cuba's health and
education sectors are amongst the best in the world.

Of our economic circumstances we keep on whining but what painful
waste-cutting surgery have we undertaken to meet this challenge? As
the burden on the poor and the not-so-rich steadily increases,
there is no let-up in the extravagance which is the hallmark of
Pakistani governance. Indeed, from the way things are run in
Islamabad, and from the fleets of cars whizzing the good and great
(including the military brass) from place to place, no outsider
would guess Pakistan was in deep financial trouble.

In any event, the effectiveness of government is not solely to be
judged on the basis of money. Even if there is no money to spread
around, what about the quality of administration or the delivery of
services? Every authoritarian government claims that it has made
the trains run on time. What metaphorical trains run on time in
General Musharraf's dispensation? Law and order: not even the most
sanguine of observers would say it has improved in the last year
and a half. The same holds true for the quality of justice, the
attitude of the police, the education available in state schools,
the health care on offer in state hospitals. The same corruption,
extortion and delays everywhere. Far from improving, the normal
operations of government, already down and out, have been battered
further. The government's whiz-kids say they are stabilizing the
economy. The World Bank and the IMF certainly seem impressed by
their efforts which is why aid money has started flowing in
Pakistan's direction again. But a thought might have been spared
for stabilizing the administration too. Instead of which a Great
Leap Forward is being contemplated in the name of devolution. Even
if there are good things in the devolution plan, the question to
ask is whether even a brilliant theory is worth anything in the
hands of bumbling experts.

Or take a look at Karachi. One of the undeniable achievements of
Benazir Bhutto's second administration was to break the back of the
MQM's near-insurgency in the summer of 1995. The army (let us not
forget) had earlier failed to bring peace to Karachi. With the help
of the police and the Intelligence Bureau, Maj-Gen Naseerullah
Babar broke the back of the MQM's armed resistance and put its
cadres to flight. Smarting from that experience the MQM lay low for
a long time. Now, as its strike calls attest, it is rearing its
head once more. With sectarian killings and a resurgent MQM, the
situation in Karachi today, when a military government is in power,
is more uncertain than at any time during the last five years.

Every now and then Lt-Gen Moinuddin Haider, the interior minister,
blows hot and cold over sectarianism. But what exactly has he or
his government done to stamp out this menace? Shahbaz Sharif took a
tougher line against sectarianism than any general. Musharraf has
only called Qazi Hussain Ahmed an "unbalanced" character. Shahbaz
Sharif actually took on the Jamaat-i-Islami and as a response to
the violent scenes the Jamaat created on the occasion of Mr
Vajpayee's bus trip to Lahore gave its activists a lesson they are
not likely to forget in a hurry.

That the Musharraf government is in power and there is no one to
challenge its authority is an undisputed fact. That there are good
aspects to this government - tolerance of dissenting views, General
Musharraf's relaxed and easy personality - is also not in dispute.
But that stability at the top is accompanied by sloppy and
ineffective administration below is equally true.

Sure, in the little over a year and a half that it has been in
power, the Musharraf government has improved its standing in the
eyes of the world. But it has not improved its standing with the
Pakistani people whose stoical attitude mirrors these words of
Odysseus: "Be patient now, my soul; thou hast endured still worse
than this."

How about some compassion?
By Irfan Husain

Year in and year out, the Human Rights Commission of Pakistan
documents the horrors inflicted by the government and society on
the weak and the disadvantaged.

Minorities, women and prisoners of every stripe are humiliated,
tortured and oppressed in an institutionalized fashion. Foreign
human rights organizations point out these excesses regularly as
well. But rather than taking steps to halt these horrors,
successive governments, some journalists and the elite prefer to
dismiss these reports as exaggerated, uninformed and an
"interference in Pakistan's internal affairs."

The police and sundry intelligence agencies use torture as a
routine investigative tool; in fact, it is their only investigative
tool. Even fingerprinting, a 150-year-old technology, is not widely
used as our cops prefer to thrash suspects to within an inch of
their lives. But we are all comfortable with this state of affairs.
All discussions of the endlessly debated police reforms revolve
around the structure of the proposed set-up and not the method of
investigating crime.

However, lest we feel we are alone in this socially accepted and
sanctioned brutality, let me introduce those readers unfamiliar
with his unbiased and honest reporting to Robert Fisk. Writing for
The Independent, Fisk recently filed this despairing article:

"Why, I ask myself, am I spending more time than ever in 25 years
covering the Middle East, cataloguing the barbarity, torture,
hangings, head-chopping and human rights abuses of the region? No,
I'm not talking about Israel's death squads, its vile torture
apparatus at the Russian compound in Jerusalem and its shoot-to-
kill army, some units of which are turning into an undisciplined
rabble. I'm talking about the blind, cruel, vindictive Muslim
regimes of the Middle East. Because I'm beginning to ask myself if
there isn't something uniquely terrible about the way they treat
their people, the way they kill their people, the way they abuse
them and flog them and string them up..."

It is perhaps revealing that Saddam Hussein, despite the hundreds
of thousands of deaths he is responsible for, continues to be a
hero to millions of Muslims across the Islamic world. I know the
following passage will not make any converts, but let me quote from
the preface to Samir Al-Khalil's book (published in 1989) "Republic
of Fear": Since I finished writing Republic of Fear, the chamber of
horrors that is Saddam hussein's Iraq has mushroomed into something
not even the most morbid imagination could have foreseen. The war
with Iran ended in the summer of 1988 on favorable terms for Iraq.
But did the violence stop, or even abate? On the contrary, it
turned in on itself...

"The day after the cease-fire came into effect, Iraqi warplanes
went into action with chemical weapons against Kurdish villages.
Between August 25 and 27, several thousand helpless civilians died.
The attacks continued on a systematic basis through September. It
had of course been done before, in the town of Halabja in March
1988 where around 6,000 perished... How many died in these attacks?
We may never know. Tens of thousands of army deserters had
collected since 1980 in the marshes region of southern Iraq. They
were given an ultimatum. What happened to those who handed
themselves in? We know only what happened to those who didn't; they
were gassed."

Al-Khalil goes on to lament the silence that greets such
viciousness outside Iraq: "Western governments looking toward
lucrative markets... are not doing enough. They turn a blind eye to
the worst excesses when these do not involve them directly. More
ominous is the active support Saddam Hussein's regime receives from
the Arab world - from regimes in particular but also from public
opinion... Not a word of condemnation of the indiscriminate use of
poison gas to eliminate a civilian population has appeared in the
Arab press..." Nor in the press here, one might add.

It is not the widespread use of systematic violence in our part of
the world that is as disturbing as its easy acceptance at every
level of society. Defenders of the system point to the blood on the
hands of other civilizations at different points in history. But
actions are judged in the context of their times: just because
other societies destroyed statues in earlier times is no
justification for the Taliban to blast the magnificent giant Buddha
carvings in Bamiyan. Similarly, Halaku Khan's trail of terror does
not give his successors the license to kill.

Nevertheless, the blood-letting does not stop: in Algeria, tens of
thousands of innocents have been slaughtered, many by having their
throats slit, in an unending civil war. Thousands of Kurds have
been killed in Iraq, Turkey and Iran over the years. We Pakistanis
have the blood of an unknown number of Bengalis on our hands.
Iranians and Iraqis bled each other white for a decade. And
everywhere in the Muslim world, torturers and hangmen go about
their grisly task every day.

Back to Fisk: "Down in Saudi Arabia, where public execution is a
fine art, they're well on their way to meeting last year's rich
crop of 113 beheadings... Our friends the Saudis are second only to
the merciless Saddam when it comes to butchering their people in
public... Then there's the other refinement of Saudi sadism: "cross
amputation" (the chopping off of right hand and left foot for
supposed crimes)..."

Apologists for these regimes seek refuge behind concepts like
"Muslim traditions" and "deterrent punishment" as if the world had
not moved forward from the days when cruelty was built into
statecraft. But now fundamental human rights are at the heart of
constitutions around the world. For a modern state to indulge in
such barbarism on a daily basis is to deny the progress humanity
has made over the centuries.

For believers, here are some words from Fisk's article to ponder
over: "What does it represent, this behavior by the states of the
Middle East? Yes, I know the Americans are poisoning, frying or
shooting their condemned at a ferocious rate. And of course I know
about 'sharia' law. I've heard more than I want to about its
severity. But what about the mercy and compassion that are among
the first words of the Quran? In Arab and Iranian homes, Muslim
families exhibit infinitely more compassion and love than
westerners. They don't send their elderly and incurably sick to die
in nursing institutions. The old and the fatally ill spend their
last days in their family homes, cared for to the end by relatives.
Shame on us. But how come the same men and women can stand on a
rooftop to scream at a woman strangling on a rope?"

Australia beat Pakistan by 7 wkts

CARDIFF, June 9: Australia beat Pakistan by seven wickets in their
triangular series One-day International, Shane Warne paving the way
with three wickets and Ricky Ponting hitting a high-speed 70.

Pakistan, opting to bat, recovered from a bad start to reach 257
before they were dismissed on the penultimate ball of their 50
overs. Australia, however, never looked in trouble despite losing
Adam Gilchrist early to pace bowler Shoaib Akhtar. Ponting, looking
in brilliant form, made 70 off 68 balls including 12 boundaries,
and Mark Waugh made 47 as the two put on 92 from 88 balls for the
second wicket.

Captain Steve Waugh (54 not out) and Michael Bevan (56 not out) put
on an unbroken fourth-wicket stand of 116 as Australia reached the
target in the 46th over.-Reuters

Hanif expects Germany to be a tougher opponent
By Shazad Ali

KARACHI, June 11: Hanif Khan, rated Germany the most challenging
outfit his side will be facing in the four-nation tournament during
the back-breaking tour to Europe.

"The Germans are to give Pakistan a testing time during the four-
nation in Hamburg, the major event of the tour," Hanif told Dawn.
Pakistan begin their tour with matches on June 15 and 17 against
Spain. They then travel to Hamburg to play a match against hosts
Germany on June 20 followed by quadrangular tournament from June
22-24 involving world and Olympic champions The Netherlands, South
Korea and Germany. According to a slight change in the program,
Pakistan will be facing Belgium on June 26 in Brussels on their way
to Amstelveen to play three Tests against The Netherlands on June
28, 30 and July 1.

Hanif said the reason to consider Germany a potentially dangerous
side was they had been fielding a settled team for the last two
years. He said the Germans were under the wings of coach Paul
Lissek when they appeared in Azlan Shah tournament in Kuala Lumpur
last year and Sydney Olympics in September. "I have watched them in
both the events and they were quite impressive. I must say they
will dominate the game in the time to come," he said.

He said Germany, had mostly youngsters in their ranks with 18 to
22-year-old players, while Pakistan an average age of 25. "The
Germans will also be having home crowd and ground advantage in
Hamburg." "The Koreans, the Olympic silver medallists, will be the
second challenge for us due to their fast pace and short passing
game which is quite difficult to handle," he added.

PSB rejects POA's plea for review of sports policy
Sports Reporter

ISLAMABAD, June 11: Pakistan Sports Board (PSB) out rightly
rejected request by the Pakistan Olympic Association to have the
national sports policy reviewed.

"There is going to be no review of the policy," Brig Saulat Abbas,
Director General (PBS) declared Monday following reports in the
press that the POA had requested the ministry of sports to
reconsider its decision of restricting the tenures of federation
officials to two terms of four years each.

The decision will be a killer blow to all long-serving officials of
the federations including the POA, which has so far used the
Olympic charter that reportedly forbids government interference in
sports federations, as a means to blackmail the government. But PSB
chief dismissed this impression and said that nowhere does the
Olympic charter say that the government cannot put a limit on the
tenures of office-bearers running the national federations.

India never ruled out playing in Pakistan
Monitoring Desk

SHARJAH, June 13: The International Cricket Council (ICC) chief
Malcolm Gray has said that the Indian Sports Minister Uma Bharti
never ruled out India playing in Pakistan but had only slammed the
BCCI officials for jumping the gun regarding the government

"The minister never said India would not play in Pakistan. She only
hit out at the Indian board for making the announcement before
getting the approval from the country's foreign affairs ministry,"
Gray said. "Now that we have a Test championship in place, what we
can do is to deduct the points if a particular country refused to
play with the other for political reason," he said. As for tackling
the issue of non-regular venues (as Bharti described some), he said
programming of the cricket schedule on a more global basis by the
ICC could help solve the problem.

Miandad tells court he was misquoted

LAHORE, June 12: Lahore High Court was informed by former coach and
captain Javed Miandad that he didn't accuse the senior players of
being involved in match-fixing during this year's tour to New

Miandad claimed that the situation was created due to mis-
reporting. Asghar Haider, the counsel for Miandad, also produced a
written reply on behalf of Miandad. The court also granted
permission to the petitioner's counsel to make party to a reporter
of a foreign news agency and reporter of a national Urdu daily who
had allegedly misquoted Miandad's statement. The counselor Aftab
Bajawa had requested the court to summon the reporters to clarify
the situation. The court also admitted the request of Javed Miandad
for exemption from appearance to the court.-APP

Shoaib, Sami ruled out of remaining tri-series ties

LONDON, June 12: Pakistan pace bowler Shoaib Akhtar's England tour
ended in disappointment on Tuesday after he was ruled out of the
rest of the triangular One-day International series. Assistant team
manager Mohammad Ahmed said: "He's not feeling well and is unfit
for international cricket."

The 25-year-old bowler, who is now set to play for an English
village team, fell ill with a mystery stomach problem at the start
of the month after playing in the first of two Tests against
England. He spent a night in hospital but blood tests and a stomach
scan proved negative.

He returned for the one-day defeat against Australia at Cardiff on
Saturday but left the field halfway through his spell, clutching
his stomach. He later reportedly vomited and coughed up blood.
Shoaib is now expected to play for an English village team in Kent,
Lashings, which has recruited a series of West Indian
internationals this season including Brian Lara. -Reuters/AFP

Shoaib's injury, contract makes Yawar unhappy
Monitoring Desk

KARACHI, June 14: The steam is out of the 'Rawalpindi Express'
Shoaib Akhtar or so it seems with his unceremonious exit midway
through the England tour and a stern warning by the management to
"either find a bowling guru or risk going right off the rails".

Akhtar missed the triangular one-day match against England due to
poor fitness. It had been reported the paceman had vomited blood
during a game at Cardiff, and Wales. The bowler has now signed to
make big money from the Kent village-cum-celebrity side Lashings.

His first game could be as soon as this Friday, against an East
Kent League Representative XI at Sutton Valence. But the team
management were apparently not pleased with either the injury or
his new assignment as the paceman had already cost nearly Rs 10
million on his medical treatments, hiring of a bowling coach
exclusively for him and his boarding and lodging expenses over
almost one year.

Waqar has revenge, psychology in mind

CHESTER-LE-STREET, June 15: Pakistan captain Waqar Younis has
revenge and psychology in mind as his team prepare to take on world
champions Australia in the triangular one-day series at The
Riverside on Saturday.

Although the game is academic with both sides already through to
the Lord's final on June 23, Waqar said it was vital for Pakistan's
confidence to win at least one of their last two round-robin
matches against the so-far unbeaten Australians. "Tomorrow�s game
is important for us. I'm not sure if it's that important for the
Australians but it is very important for us to give a good show
before the final," the fast bowler told Reuters.

"We need to win at least once against them, at Riverside or at
Trent Bridge, so we can have a little psychological effect on them
for the final." Steve Waugh's Australia, the 1999 World Cup
champions, have won their first three triangular tournament outings
while Pakistan, who lost to the Aussies by seven wickets in
Cardiff, have won twice in three matches.-Reuters

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