------------------------------------------------------------------- DAWN WIRE SERVICE ------------------------------------------------------------------- Week Ending : 31 March 2001 Issue : 07/13 -------------------------------------------------------------------
Contents | National News | Business & Economy | Editorials & Features | Sports
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CONTENTS =================================================================== NATIONAL NEWS + India asked to stop boundary firing + After Chashma another N-plant in 7 years: Ishfaq + Kashmiris decline talks without all leaders + Minimum deterrence essential, says CE + Electricity rate raised by 8 paisa more + Musharraf defends hike in gas, power tariff + Senegal calls for Pakistan, India talks + CE links IT promotion to development + Supreme Court to take up tapes issue on Monday + Cabinet agrees to constitutional changes if needed + Military courts to deal with sectarian cases + Chinese PM's letter to CE delivered + Tarbela touches dead level: IRSA + Azhar elected chief of anti-Nawaz group + Govt withdraws cases against Hubco + Govt to sell 25% stake in PTCL for $3 billion --------------------------------- BUSINESS & ECONOMY + Petrol export from next month + Changes in taxation system decided: Shaukat on CBR revamping + IMF approves $133m tranche + Rise in imports to improve revenue + SAP: call to oust corrupt men + Foreigners shy to make big investment + New export finance scheme launched: Facility in foreign currency + Govt not to expand privatization list + Privatization Commission to sell UBL this year + World Bank for faster execution of reform programme + ADB links soft loans to good governance + SBP offers special TBs to banks: End-March NDA target + SBP buys $1.2bn from kerb --------------------------------------- EDITORIALS & FEATURES + I could be a solution' Ardeshir Cowasjee + A question of horses Ayaz Amir + Partisan politics Irfan Husain ----------- SPORTS + Kiwi openers grind Pakistan + Cricket board snaps relations with India + Ex-stars chide India over refusal to play Pakistan
DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS =================================================================== NATIONAL NEWS 20010331 ------------------------------------------------------------------- India asked to stop boundary firing ------------------------------------------------------------------- ISLAMABAD, March 30: Pakistan on Friday called upon India to immediately halt its firing along the Working Boundary, which had jeopardised Islamabad's initiative for dialogue for the settlement of Kashmir dispute. "Indian firing and related military activity along the Working Boundary seriously jeopardise Pakistan's endeavours and initiatives for maximum restraint to promote a dialogue for a settlement of the Kashmir dispute," a Foreign Office statement issued here said. "Indian forces have resorted to unprovoked firing into Pakistan in recent weeks from across the Working Boundary" between the territory of Pakistan and the territory occupied by India in Kashmir, APP news agency quoting the statement said. Pakistan, therefore "calls upon the government of India to immediately put an end to firing and other provocative acts along the Working Boundary," it said. The statement follows a strong Pakistani protest on Thursday against Indian efforts to build a fence along the Working Boundary. Thursday's statement warned that Pakistan "reserves the right to take all measures appropriate and necessary to frustrate Indian designs to change the character of the Working Boundary." India has already built a barbed-wire border on its side of East Punjab. Pakistan's opposition to New Delhi's moves in the past to extend this fence to occupied Jammu region have led to deadly clashes between the two countries. A Pakistan Army source said on Thursday that reports had been received recently that India was once again trying to extend the fence, adds Reuters news agency. DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS 20010330 ------------------------------------------------------------------- After Chashma another N-plant in 7 years: Ishfaq ------------------------------------------------------------------- Khaleeq Kiani CHASHMA, March 29: Pakistan planned to establish another nuclear power plant with 100 per cent indigenous expertize and resources in six to seven years, said Dr Ishfaq Ahmed, Chairman of Pakistan Atomic Energy Commission and adviser-designate to the Chief Executive, on Thursday. He was speaking at the inauguration ceremony of $600 million 325 megawatt Chashma Nuclear Power Plant here. "Pakistan should not wait for another 30 years to have another plant. The government is very keen and we hope we will have a third nuclear plant very soon," Dr Ishfaq said. "We have to see the Chashma Power Project stabilizing power generation, economic turnaround in the country and then we can go for the third plant," he said. Chief Executive Gen Pervez Musharraf, who was scheduled to inaugurate the project, could not reach here due to inclement weather in Islamabad. He will formally unveil the plaque sometime later, Dr Ashfaq told newsmen. Chashnupp became operational in September last year and it has already started supplying electricity to Wapda's national power grid. Dr Ishfaq said that Pakistan established Karachi Nuclear Power Plant (Kanupp), the first nuclear plant in the Islamic world, in 1972 and then it took the country 30 years to complete Chashnupp due to sanctions. He said that after the 1974 nuclear explosion by India, sanctions were imposed on Pakistan and the supply of fuel, spare parts, heavy water and equipment was stopped to Pakistan. However, he said, the Pakistani scientists and engineers took up the challenge and completed the Chashnupp where they had achieved 60 per cent capability of operations, maintenance and technical know-how. He said that Pakistan was committed to peaceful use of nuclear technology. He said that Pakistan's new power policy had encouraged use of hydel and other indigenous resources for power generation and nuclear power was more environment-friendly and reliable. He said hydel and nuclear power had very close relationship and hinted that four more power projects could be developed at Chashma. In his address, Chinese minister for science and technology and national defence Liu Jibin said Chasnupp had received full support from both the governments of Pakistan and China, APP adds. He said the agreement for the project was signed in 1991 and its construction started in 1993. "The 1993 turned a new leaf in the cooperation between Pakistan and China for the peaceful use of nuclear energy based on equality and mutual benefit," the Chinese minister said. DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS 20010330 ------------------------------------------------------------------- Kashmiris decline talks without all leaders ------------------------------------------------------------------- SRINAGAR, March 29: The All Party Hurriyat Conference said on Thursday it would not enter into any dialogue with New Delhi until their leaders were allowed to visit Pakistan. The statement by the APHC was a reaction to a news item that a senior Indian government official was being nominated for talks with the alliance. "The process of negotiations can only start after Hurriyat's tour to Pakistan," the statement said, adding its leaders would then "sincerely try to push forward" a dialogue with the Indian government. The Hurriyat had nominated a five-member team in December last year for a visit to Pakistan in order to hold talks with Kashmiri leaders and government officials.-AFP DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS 20010327 ------------------------------------------------------------------- Minimum deterrence essential, says CE ------------------------------------------------------------------- Shamim-ur-Rahman KARACHI, March 26: The chief executive, Gen Pervez Musharraf, said on Monday that in the prevailing security environment in the region it was imperative for the country to always maintain a "minimum deterrence". He was speaking at the PAF's Sonmiani firing range where he witnessed a spectacular display of air-to-air and ground-to-air missiles and other weapons fired by the frontline fighter aircraft. The display brought to an end PAF's week-long camp 2001 whose objective was to test combat fitness of the aircraft and the personnel. In an apparent reference to disparity in defence forces viz-a-viz India, the CE said: "We are always out-numbered...we maintain a minimum deterrence, which we will always maintain." Spelling out three stages of deterrence, Gen Musharraf emphasized that minimum deterrence, which could be quantified in comparison to the enemy's strength, should be followed by "ability to threaten enemy's such vulnerable targets which go beyond their tolerance threshold". It would also mean "will and resolve of the force to defend and fight by challenging the enemy," said the CE, adding that the PAF had always played an important role in strengthening security. Recalling the PAF's role in 1965 and 1971 wars, Gen Musharraf said that the resolve of the force would put fear of God in the heart of the enemy. Durandal or runway penetration bombs were also dropped to demonstrate the PAF's capability to make the enemy runways inoperative. The outcome of the firing display was regarded as "highly encouraging." Sindh Governor Mohammedmian Soomro, Balochistan Governor Amirul Mulk Mengal, Chief of the Air Staff, Air Chief Marshal Mushif Ali Mir, and Chief of Naval Staff, Admiral Abdul Aziz Mirza, witnessed the demonstration. DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS 20010330 ------------------------------------------------------------------- Electricity rate raised by 8 paisa more ------------------------------------------------------------------- Ahmad Fraz Khan LAHORE, March 29: The National Electric Power Regulatory Authority (Nepra) on Thursday allowed the Water and Power Development Authority (Wapda) to increase power tariff by 8 paisa per unit. The Thursday hike came on top of last Friday's increase of 12 paisa per unit taking the cumulative increase for domestic consumers to 36 paisa per unit (kilowatt hour) during the last six months. Wapda's Acting Member (Finance) Javed Nizam told reporters here that the increase was allowed under the mechanism called automatic adjustment in the consumer-end tariff and came into effect from March 27 with retrospective effect. The decision would affect domestic, industrial and agricultural consumers as well as the KESC. He said that Thursday's step was only of interim nature as Wapda's plea for an increase of 98 paisa per unit was pending with the Nepra and its hearing was expected to start soon. The recent hike in tariff is expected to bring Rs2 billion to Wapda during the remaining three-and-a-half months of the current financial year. Mr Javed said the increase had become inevitable because of sky- rocketing furnace oil prices, devaluation of rupee, increase in gas prices and 6 per cent inflation in the country. The commissioning of new IPPs, he added, had also increased Wapda's financial burden as it had to start paying capacity charges to them also. All these factors have taken Wapda's deficit to Rs 9 billion per annum. Giving the background of the increase, he said that Nepra had asked Wapda to control line-losses and cut development plans by 3 to 4 per cent but the Wapda authorities on their part argued that these steps might increase cash flow but would not improve profitability of the organization unless the gap between cost per unit and price was bridged. "The State Bank also agreed to our argument and recommended to the government increase in tariff." In its original plea seeking increase in tariff, Wapda had only cited fuel prices as the factor for raise in prices and pleaded for automatic fuel prices adjustment charges. But, of late, it has started including a host of other factors like devaluation and inflation. DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS 20010326 ------------------------------------------------------------------- Musharraf defends hike in gas, power tariff ------------------------------------------------------------------- Habib Khan Ghori KARACHI, March 25: The chief executive, Gen Pervez Musharraf, has defended the upward revision of gas and power tariff, adding that the existing tariff is not high enough to attract investors. Speaking at a press conference at the Governor House on Sunday, he said that as long as power theft continued the government would have no alternative but to increase tariff. Admitting that an increase in fuel prices would have an impact on the price of all commodities, the chief executive said the country had burnt out its gas resources because of low domestic rates. He added that all over the world the domestic rates were higher than commercial and industrial rates. When asked if the masses could endure the increase in gas and power tariff, the chief executive said tariff structure adjustment was not a popular decision but it was necessary in the national interest. He said that when the army had been inducted into the Water and Power Development Authority its losses, including 15 per cent transmission and distribution losses, had been 42 per cent. The remaining losses, he said, had been due to power theft. Talking about the Karachi Electric Supply Corporation, Gen Musharraf said that till July its losses had been 44 per cent. He added that the army had brought the losses down to 30 per cent. When asked why the 1991 Water Accord had not been implemented by the Indus River System Authority completely, the chief executive said the government was abiding by the accord strictly and every province was getting its share. He conceded that like Kalabagh Dam the water accord was a contentious issue. "I personally monitor the water distribution system." He agreed with a questioner that there was a difference of opinion among provinces. "It (water) is a contentious issue which is affecting provincial harmony. We need to look at past decisions," he added. He stressed the need for overcoming ethnic animosity in Sindh. In his opening statement, Gen Musharraf said the government was planning to construct smaller and cost-effective dams in all the provinces. He said these dams included Hingol Dam in Balochistan, Gomal Dam in the NWFP, and Sehwan Dam in Sindh. The government also planned to increase the capacity of Mangla Dam by 3.5 million acre feet (maf). "We have started studies on these smaller dams and will soon start work on them," he remarked. These dams could be completed in about four years against 10 years required on Kalabagh Dam and 14 years on Bhasha Dam, he added. Total expenditure on these projects was estimated at Rs200 billion, which was much lesser than the cost of big dams like Kalabagh and Bhasha Dams, he said. The chief executive said the government was going to deregulate the electronic media and had framed a draft law to set up a Pakistan Electronic Media Regulatory Authority. He said the government had selected four consortiums to privatize PTV-3 channel. "We will privatize PTV-3 purely on merit," he added. DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS 20010326 ------------------------------------------------------------------- Senegal calls for Pakistan, India talks ------------------------------------------------------------------- ISLAMABAD, March 25: President of Senegal Abdoulaye Wade has called for resumption of dialogue between Pakistan and India so that they could find a solution to longstanding Kashmir dispute. He was talking to newsmen at the Chaklala airbase on Sunday before his departure at the end of his three-day official visit to Pakistan. Mr Wade said he was concerned over tension in South Asia because of the Kashmir issue, which could pose a threat to peace in the region. He said his country "is willing to play its role for the solution of Kashmir problem". He said he was ready to ask OIC and African countries to help resolve the 53-year-old dispute, and added that it was the duty of the international community to play its role for the solution of Kashmir issue. . Mr Wade described his visit to Pakistan as very fruitful, saying it would lead to increased cooperation between the two countries in different fields including agriculture, industry and commerce. He said Senegal was willing to purchase cement and sugar plants from Pakistan. He said Senegal would import rice from Pakistan and added that his country imported about 0.4 million tons of rice every year. Mr Wade said his visit to Pakistan had enabled him to see the development in the country's different fields including agriculture. He said: "Thereare bright opportunities for his and other African countries to learn from Pakistan's experience".-NNI DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS 20010325 ------------------------------------------------------------------- CE links IT promotion to development ------------------------------------------------------------------- Habib Khan Ghori KARACHI, March 24: Chief Executive Gen Pervez Musharraf has said government efforts plus the keen interest of the people in the information technology field and dynamism of the private sector will bring about economic revolution in the country. He said: "Our efforts are not limited to promoting the IT industry in isolation but to develop Pakistan as a business-friendly destination for investors. He said this while inaugurating the International Information Technology Exhibition Asia -2001 on Saturday night at the Expo Centre here in which over 30 countries are participating. It was announced on the occasion that the army had provided 25 acres in Karachi to develop an IT park, and land would be provided for an IT university in Abbottabad. He said: "Our vision is a translation of our aspirations for bringing the benefits of digital revolution to our homeland." The CE said this very mega IT event was a clear showcase of how the world had responded to "our initiatives and seriousness of our efforts." Recalling that incentives were being offered to attract local and foreign investment in the IT sector, he said he was glad that the internationally recognized names like IBM, Sun Microsystems, Microsoft, and Motrola had already set foot on Pakistan's soil and numerous others were waiting in the wing to capitalizes on the opportunities. He said he had come to know that during the exhibition 2001 MoUs worth millions of dollars were to be signed. This would be a big achievement. He announced that henceforth all software contracts would be given to local firms which would help in the transfer of technology from abroad. He said that with the development of IT in the country jobs would be provided to educated urban youths which would help to remove the sense of deprivation among them and also help in the poverty alleviation programme of the government. He said the government had increased spending on science technology by 1500 per cent in one year and 50,000 personnel had been trained in one year only. The chief executive officer of Commerce net Singapore Lad, Wang Jew Chain; president of Pakistan Software Houses Association Syed Hamza Main and Sindh Finance Minister and Chairman of Sindh IT Board Dr Abdul Hafeez also spoke on the occasion. Telecommunications Secretary Abu Shamim Arif presented a vote of thanks. After the presentation of shields to the organizers and participants, a skywriting display was carried out. DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS 20010331 ------------------------------------------------------------------- Supreme Court to take up tapes issue on Monday ------------------------------------------------------------------- Rafaqat Ali ISLAMABAD, March 30: Barrister Zahoor, counsel for the Federation, read out a statement of Ahmed Sadiq, Principal Secretary to former Prime Minister Benazir Bhutto, before the Supreme Court bench on Friday, to show that the appellants had wasted time by making irrelevant questions during the cross-examination of the defence witness. He concluded his arguments in less than two hours and read pages after pages of the cross-examination of Ahmad Sadiq. Justice Munir A. Sheikh observed that the counsel were endeavouring to show that the government of Nawaz Sharif was always after the appellants who were his political opponents. The counsel then referred to the documents which were on record of the court to show that Jens Schlegelmilch, and Abdur Rehman Al Asir, had visited Islamabad at that particular time when the negotiations for the award of the contract were continuing and stayed in Islamabad's five star hotel at expense of the government of Pakistan. The counsel said the presence of Jens Schlegelmilch and Abdur Rehman Al Asir in the federal capital at the time of award of the the contract established beyond doubt his connection with the appellants. The counsel stated that they were in fact summoned by the then prime minister. He said that the documentary evidence produced in the court showed that the Prime Minister Secretariat had paid the expenses incurred on their stay. Justice Munir A. Sheikh observed that was there any restriction on the coming of foreigners in Pakistan and every foreigner was necessarily agent of Asif Zardari? The counsel replied that he was presenting circumstantial attempting to show to the court that the presence of Jens Schlegelmilch at the time of the award of the pre- shipment inspection contract was pre-arranged. The counsel said it was correct that Jens Schlegelmilch was a co- accused but not on trial as his trial had been separated. He said the statement of Jens Schlegelmilch might not have much evidentiary value but it was relevant under the Article 23 Q(A) of Qanun-i- Shahadat. When counsel reverted to the statement of Ms Benazir Bhutto under section 342 of CrPC, the counsel for the defendants protested, saying that it was not on the record of the court. Barrister Zahoor said that it was promised by Raja Anwar that he would show to the court that the trial court had disallowed Ms Benazir Bhutto to make her statement under 340(ii) as witness. When Raja Anwar showed it from the record that the Ehtesab Bench had disallowed Babar Awan, counsel for Ms Bhutto, to submit an application along with her statement under section 340(ii), Barrister Zahoor withdrew his argument. The seven-member bench, which started hearing of the appeals on February 26, announced that it would continue hearing the case next week. The court asked the counsel to adjust the time in such a way that the case was concluded next week, which would have three clear working days because of two Muharram holidays. Attorney General Aziz A. Munshi who is on court notice, will start his argument on the law on Monday and conclude within two hours. At the conclusion of AG's arguments, Abdul Hafeez Pirzada, counsel for Asif Ali Zardari, will start arguments. DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS 20010329 ------------------------------------------------------------------- Cabinet agrees to constitutional changes if needed ------------------------------------------------------------------- Ihtashamul Haque ISLAMABAD, March 28: The federal cabinet here on Wednesday decided to protect "all the decisions and actions of the government" by introducing amendments to the constitution, if needed. Informed sources said that eminent constitutional expert and adviser to chief executive, Syed Sharifuddin Pirzada, who was specially invited to the meeting, briefed the participants about various options to indemnify all the decisions and actions of the government in the absence of the National Assembly. The chief executive said that wherever he went, people asked questions from him as to how would the government ensure protection to its decisions which, he added, aimed at strengthening political and democratic institutions in Pakistan. Sources said that Mr Pirzada made an extensive presentation on 8th Amendment and its merit and demerits. He also touched upon 12th and 13th amendments and said different options were available to protect the government's actions after October 2002. Minister for Finance Shaukat Aziz raised the issue by saying that members of the international donor community were "concerned" about the sensitive issues and that how would the government deal with them. "We must find a way after October 2002 to protect our critical reforms," the finance minister was quoted as having said. Later, he thanked the cabinet members for supporting him over the issue of protecting the government's reform agenda. Sources said the chief executive assured the cabinet that structural and political reforms which were being introduced would have to stay and that nobody would be allowed to undo that. According to a government handout, the cabinet discussed and deliberated a wide range of issues and options for strengthening the political institutions of the state and improving the functioning of various state organs. Opening the discussion, Chief Executive Gen Pervez Musharraf, who presided over the meeting, reiterated his government's ultimate objective of ensuring supremacy of national interest over government interest which in Pakistan, he said, has been largely the personal political interest of individuals. He said the country has also suffered in the past from concentration of executive power. There was thus, he said, a need to strike a healthy balance to eliminate opportunities of misuse of power. Definite steps, he said, would also be taken to remove disharmony among the provinces and create an atmosphere of trust and amity. Gen Musharraf solicited the views of the cabinet regarding measures to ensure sustainability and continuity of the polices being implemented now. DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS 20010329 ------------------------------------------------------------------- Military courts to deal with sectarian cases ------------------------------------------------------------------- ISLAMABAD, March 28: The government has decided, in principle, to set up military courts to fight the menace of sectarian terrorism. The ministry of law, justice and human rights has prepared a summary to this effect and will send it to the cabinet division for approval cabinet's approval. Reliable sources told NNI that the government had to take this decision to check the growing incidents of sectarian terrorism and to improve the deteriorating law and order situation. Military courts were likely to be set up immediately after the summary's approval, the sources added. It may be recalled that the cabinet, at its last meeting, had deliberated upon sectarian violence in the country and decided to take a number of steps to combat it.-NNI DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS 20010329 ------------------------------------------------------------------- Chinese PM's letter to CE delivered ------------------------------------------------------------------- ISLAMABAD, March 28: Chinese Minister for Science, Technology and Industry Liu Jibin delivered a letter of Prime Minister Zhu Ronji to Chief Executive Gen Pervez Musharraf here on Wednesday. Mr Rongji congratulated Pakistan on the inauguration of the Chashma Nuclear Power Plant and described it as "a symbol of traditional friendly relations between the two countries." Mr Jibin, who is heading a 22-member Chinese delegation, is on an official visit to Pakistan to participate in the inauguration of the power plant on Thursday. Gen Musharraf will inaugurate the power plant built with the help of Chinese assistance near district Mianwali. Chinese leader was quoted to have emphasized China's "resolve to further enhance friendly cooperation," said a foreign ministry statement. -APP DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS 20010327 ------------------------------------------------------------------- Tarbela touches dead level: IRSA ------------------------------------------------------------------- Faraz Hashmi ISLAMABAD, March 26: Main rivers' level remains unchanged and the available water is being released to the provinces for irrigation, an IRSA official said on Monday. In the country's main reservoir, Tarbela, which supplies irrigation water to Sindh, the level remained at its lowest, technically termed dead level (1369 feet), he said. Water could not be released beyond that level as it could pose a serious threat not only to the power plant but also to the dam, he added. The official said that the situation at Mangla was, however, a little better as the water level, recorded by IRSA on Monday, was five feet higher than the dead level-1,040 feet. The inflow at Tarbela was 14,200 cusecs and outflow was 16,000 cusecs. At Mangla, 9,900 cusecs were flowing in the reservoir while 894 cusecs were being discharged. Flow in Kabul river was recorded at 3,900 cusecs, the official said. The discharge at upstream Marala was 6,914 cusecs and downstream 1,015 cusecs. At Kalabagh upstream it was 8,903 cusecs and downstream 8,853 cusecs. The level at Chashma was 637 cusecs with an inflow of 19,290 cusecs and outflow 16,090 cusecs. The water discharge upstream Taunsa was 16,462 cusecs and downstream 15,462 cusecs, the official added. C-J link, T-P link and Muzaffarghar canals remained closed and only 1,000 cusecs were being released from Dera Ghazi Khan canal and that, too, for meeting drinking water requirement of Dera Ghazi Khan area, he said. Upstream Guddu, 11,718 cusecs was the flow, while only 10,098 cusecs were flowing down. At the Sukkur barrage, 11,650 cusecs were reaching, but 2,700 were being released. Kotri was getting 1,745 cusecs and the flow downstream was nil, the official added. DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS 20010326 ------------------------------------------------------------------- Azhar elected chief of anti-Nawaz group ------------------------------------------------------------------- Faraz Hashmi ISLAMABAD, March 25: Mian Mohammad Azhar was elected the president of the Pakistan Muslim League's like-minded group at a general council meeting held at a cricket ground on Sunday. Mr Azhar was elected unopposed at the meeting which was held in defiance of a ban on political activities. Ejazul Haq, who till Saturday night was determined to contest the election, presided over the meeting. After the election, Mr Haq embraced Mr Azhar, gesturing that differences should be forgotten. Mr Azhar's name was proposed by Abdul Majeed Malik and seconded by the PML provincial presidents, secretaries-general and a number of other leaders and general council members. The like-minded group was also supposed to elect a secretary- general, but due to a lack of consensus the party empowered the newly elected president to make a nomination. NWFP PML president Saleem Saifullah Khan told Dawn that there might be some disagreement over the question as to who would be the next secretary-general. Therefore, he added, the party had empowered the new president to make a nomination. The NWFP Muslim League had been supporting Gohar Ayub but there were two or three other candidates, Mr Khan said. Zafarullah Khan Jamali and Illahi Buksh Soomro had also been aspirants to the post of secretary-general, a source said. The supporters of Mr Azhar created disorder when they got on to the stage after his selection. In his speech after the election, Mr Azhar hoped that the elected institutions would be restored. Though somewhat cautiously, he also supported the government's devolution plan. DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS 20010328 ------------------------------------------------------------------- Govt withdraws cases against Hubco ------------------------------------------------------------------- Khaleeq Kiani ISLAMABAD, March 27: The government has withdrawn all civil and criminal cases against Hub Power Company (Hubco) to give legal status to the December 17 Wapda-Hubco settlement agreement, sources close to the finance ministry told Dawn here on Tuesday. The withdrawal of cases came just three days ahead of March 31 deadline set forth under the December 17, 2000 settlement agreement to wind up all outstanding issues that would have otherwise left the agreement null and void. "The chief executive has been pleased to approve the withdrawal of cases against Hubco as per the Settlement Agreement executed between the government of Pakistan, Wapda and Hubco on 17 December, 2000", said these sources quoting a directive from the chief executive office. The Chief Executive General Pervez Musharraf also directed the ministries of water and power and finance to initiate necessary legal action at their end to finally bury over 40-month old hatchet the Hubco-wapda controversy had created. The decision came following a marathon meeting at the ministry of finance where the chairman Wapda Lt Gen Zulfiqar Ali Khan was specially called back in a hurry from UAE in the mid of his week- long official visit. The general was in UAE to muster financial support for the irrigation projects Wapda was planning to take in hand in next 25 years. The meeting presided over by the finance minister Shaukat Aziz was also attended by secretary water and power Dr Akram Sheikh and senior official ofWapda and the two ministries. The decision of the chief executive to withdraw these cases was immediately conveyed to visiting chairman of Hubco Sheikh Mohammed Alireza who soon after chaired the Extraordinary General Meeting (EGM) of the company shareholders. The EGM then formally approved the settlement agreement. Earlier, the Hubco chairman also held a meeting with the finance minister and expressed satisfaction over the latest developments. In this way, almost all the issues have now been resolved that were required to meet the March 31 deadline. Sources close to the finance minister confirmed that all cases have been withdrawn and an approval letter from the CE has been received and conveyed to the Hubco chairman verbally. The officials of water and power, finance, Wapda and law and justice were engaged in hectic consultations till late in the night to work out legal technicalities to withdraw pending cases in various courts in next three days. Even if the legalities go beyond March 31 to finally settle down, these would have no formal ground. There are some 18 cases, Wapda, Hubco and the government of Pakistan have filed against each other in various courts and International Court of Arbitration. A civil case is pre-scheduled for hearing this week in Lahore High Court while a criminal case is coming up for hearing in a Banking Court at Karachi in the first week of April. All other cases are based on these two cases and could be withdrawn on the request of the contesting parties. Meanwhile, the Hubco shareholder's Extraordinary General Meeting (EGM) on Tuesday approved the settlement agreement (SA) concluded between Hubco, the government of Pakistan and Pakistan's Water and Power Development Authority (Wapda) on December 17, 2000, said a Hubco statement. The settlement agreement was ratified, approved and confirmed by Hubco's Board of Directors on February 7, 2001. On March 13, Hubco's lenders accorded their approval. The chief executive and the federal cabinet have already approved the agreement a couple of months ago. With the ratification of the settlement agreement by the shareholders on Tuesday, Hubco has met its obligations under the terms of the agreement, said Hubco statement. The statement said that Hubco chairman was hopeful that the government of Pakistan and Wapda will also meet their obligations under the agreement by the March 31st deadline. He informed the shareholders that relations between Hubco and Wapda have "improved dramatically since the signing of the settlement agreement." Officials from the government of Pakistan, Wapda and Hubco have been meeting for the past week to finalise the outstanding issues on the part of the government of Pakistan that must be resolved by 31st March 2001 deadline imposed on the agreement by the parties. "The outstanding actions that remain on the part of the government and Wapda include: the completion of the investigations of the company and its officers; disposal of the civil and criminal cases against the company and its officers; and confirmation by Wapda of the amount due to Hubco for the payment of arrears", said the statement. The list of 18 cases include four in the Supreme court of Pakistan, three in International Chamber of Commerce Tribunal London, seven in Sindh High Court, two in Special Banking Court Karachi and Senior Civil Judge, Lahore. Following is the list of cases: (i) State vs Khurshid Hussain & Others (offence in banks) before Special Court Karachi (ii) Wapda vs Hubco & others (1/99) before Senior civil Judge Lahore (iii) Wapda vs Hubco & others (CR34399) in Lahore High Court Lahore (iv) Wapda vs Hubco & others (HCA-90/99) before Sindh High Court Karachi (v) Wapda vs Hubco & others (CPLA 1446/99 in CLA 1399.99) before Supreme Court of Pakistan (vi) Wapda vs Hubco & others (CMA 1369/99 in CA 1399/99) before Supreme Court of Pakistan (vii) GOP vs Hubco & Wapda (WP 1304/2000) before Sindh High Court Karachi (viii) Hubco vs Wapda & others (CR 1645/99) before Lahore High Court, Lahore (xiv) Hubco vs Wapda & others (Suit No. 1417/98) before Sindh High Court Karachi (x) Syed Khurshid Hussain vs GOP & others (Const. Petition No 1690/98) before Sindh High Court Karachi (xi) Hubco vs GOP, Wapda and others (No 1691/98) before Sindh High Court Karachi (xii) Hubco vs Wapda & others (HCA 106/99) before Sindh High Court Karachi (xiii) Hubco vs Wapda & others (CPLA 1426/99) before the Supreme Court of Pakistan (xiv) Hubco vs GOP (ministry of power) and others (No. D 997/2000) before Sindh High Court Karachi ad (xv) Hubco vs Wapda & others (review petition against Supreme Court order dated 14.6.2000) before Supreme Court of Pakistan. Three arbitration cases include (a) Hubco & Entergey vs Wapda (10045/)LG) in ICC Tribunal London (b) Hubco vs Wapda (11057/DB) in ICC Tribunal London (c) Hubco vs GOP (11129/ESR) in ICC Tribunal London (ICA). DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS 20010331 ------------------------------------------------------------------- Govt to sell 25% stake in PTCL for $3 billion ------------------------------------------------------------------- By Our Special Correspondent ISLAMABAD, March 30: The government is all set to sell 25 per cent of its stake in the Pakistan Telecommunication Limited (PTCL) along with its management for about three billion dollars by the first week of April, it is learnt. A consortium, headed by a Middle East-based company owned by the Lebanese prime minister, Rafik Hariri, is said to be on the top of the short list of firms of potential buyers. The government reportedly hopes to finalize the deal quickly in order to meet the IMF's performance criteria on privatization under the nine-month $600 million Standby Arrangement signed in Nov, 2000. The company led by the Lebanese prime minister reportedly does not have any experience of telecommunication business. In fact, he himself is said to have made his money in construction business primarily in building royal palaces for oil rich Sheikhs in the Gulf. In its present form, the PTCL controls almost the entire telecommunications industry in the country and owns all telecommunications assets: from local copper lines to the homes and businesses all the way to the international optic fibre and satellite links that join Pakistan with the outside world. There is not a single telephone call or a bit of data in Pakistan that does not pass through PTCL's network in some fashion. With such a control over the market, the PTCL can keep competition at bay even after 2003 when the telecommunication business worldwide would be deregulated under the WTO agreement. If the proposed sale of the PTCL goes through with its management going to one single company then the public monopoly of such a long reach, ostensibly having its foremost interest in public good, would convert itself overnight into a private monopoly which under normal circumstances is driven solely by considerations of maximum profit. The telecommunication sector analysts say that such a method of privatization in other parts of the world had met with disaster for the host country. For example, they said, Mexico sold its telecommunication company Telemex to Carlos Slim, a prominent Mexican businessman of Lebanese descent who had also earned his money in construction trade. Even after a lapse of ten years the privatized Telemex is said to have made not a single improvement in its service or its facilities. These analysts say that in order to avoid such a situation from arising, the government could break up the PTCL into five separate components: 1) The national grid - the sum of the fibre, copper and microwave links that connect the country's exchanges; 2) Local loop/Local service - telephone service within a particular area code (051 for Islamabad); 3) Long Distance service - telephone service between area codes or internationally; 4) Data service - IP connectivity either within the country or internationally to the internet backbone or another IP connectivity provider; and 5) Wireless - cellular service. These analysts maintain that five smaller companies in five different hands would help protect the mutual interest of the organization as well as of the workers, because then each unit will have a limited work force to deal with and, therefore, could come to terms with the unions on mutually beneficial terms. In case of a monopoly sale, there is a fear that as many as 25,000 workers would be declared redundant and shown the door which, it is believed, would create many unforeseen problems no matter how the issue of overstaffing is resolved. At present, the PTCL has 55,000 regular employees and 10,000 wage earners. Also, they say, five small units put on sale would create the room for local businessmen as well to participate in the PTCL privatization process. Of the five smaller units proposed above, the only remaining natural monopoly, they point out, would be that of Local Loop and Local Service provisioning. This situation, it is felt, would allow competition to emerge on all fronts which in turn would give the customers alternatives and economical choices.
BUSINESS & ECONOMY 20010331 ------------------------------------------------------------------- Petrol export from next month ------------------------------------------------------------------- Aamir Shafaat Khan KARACHI, March 30: Pakistan is likely to commence export of petrol from April as the Pak-Arab Refinery (PARCO) is giving final touches to the list of intending importers. Sources in the PARCO told Dawn on Friday that the company had received over 10 bids for the oil export in response of the international tender, floated three weeks ago. This has now been almost short listed to four or five bids. While the identity of the short listed bidders is expected to be disclosed after official approval by next week, oil business sources say that possible marketing destinations are in Europe, where countries are hard hit by the recent Opec decision to cut down on petrol production. Oil marketing sources expect a price range of $200-220 per ton on the deal, which is considered to be sound, when matched with the prevailing refineries rates in the region. A senior official in PARCO said: "We are evaluating the bids and most probably it will be finalized some time next week so that the first shipment of 10,000-15,000 tons of petrol could be sent." With a refining capacity of 100,000 barrels a day, PARCO earlier negotiated with Iran for surplus petrol export. But, the lower prices, offered by Iran, became the barrier in finalizing the deal. The names of the participating countries in the bids could not be known, but the official said Germany and the United Kingdom also floated their offers. "These countries are offering much higher as compared to Iran," the refinery official said, without quoting the actual prices. Oil experts say Pakistan's export earnings may range between $100- 110 million per annum, if 500,000 tons of petrol is exported at the rate of $200-220 per ton (Middle East prices). Around 500,000 tons of petrol has become surplus since the start of the new refinery as the country's annual requirement is one million tons against the production of 1.5 million tons. Sources in PARCO said the refinery, set up at a cost of $886 million at Mehmoodkot near Muzaffarabad, is actively trying to export surplus petrol ranging between 300,000-400,000 tons per annum and if the bids are finalized, Pakistan will become motor gasoline exporting countries of the world. Due to lack of storage facilities, PARCO, as per government instructions, has cut its throughput to 70 per cent, bringing it to 1,000 tons per day from 1,500 tons per day. The PARCO official said the company had made arrangements for storage facility and started maintaining the surplus petrol at Keamari oil terminals of Pakistan State Oil (PSO). Besides, talks with other oil marketing companies (OMCs) for storing the surplus petrol are already underway. With the commissioning of PARCO refinery, the supply of petroleum products like liquefied petroleum gas (LPG), diesel, fuel oil and petrol has increased and the country's requirement is being met through indigenous production. However, the demand of petrol is gradually on the decline due to consumers' rising preference to compressed natural gas (CNG) in their vehicles. The PARCO is also looking the possibilities for exporting LPG, which the refinery is producing a surplus of 100-150 tons per day as against actual production of 450 tons, while the rest is being consumed in the country. According to a World Bank report, presented last year to the government, overall consumption of petroleum products had grown by about four to five per cent in the recent years. However, this average marks wide variations in the consumption pattern for different fuels. Consumption of fuel oil (largely for thermal power generation) expanded rapidly by almost eight per cent during 1995- 1999, mainly in 1997-99 due to commissioning of about 3,000 MW of generating capacity through fuel based IPPs. Consumption of diesel and petrol was fairly robust (3.5 per cent and 2.5 per cent per annum), though petrol demand declined in 1999- 2000. DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS 20010331 ------------------------------------------------------------------- Changes in taxation system decided: Shaukat on CBR revamping ------------------------------------------------------------------- Ihtashamul Haque ISLAMABAD, March 30: The government has decided to drastically curtail the discretionary powers of tax officials and streamline the whole process of the Central Board of Revenue (CBR), to enhance revenues and plug the leakages. "Decision has also been taken to promote Self-Assessment Scheme, along with computerized assessment", said the minister of finance, Shaukat Aziz. Talking to Dawn on Friday he said, a decision has been taken to minimize the emphasis on audit and the frequency of visits of tax authorities to their assesses. "We have further decided to strictly deal with the corrupt element and at the same time to promote automation", he said. The finance minister said, a new system is being introduced in the CBR in the light of Task Force on Tax Administration's recommendation. "Top level corruption in the department has already been eliminated during the last few months", he claimed adding "efforts are now being made to discourage the menace at other levels, too. "Various policies are being changed and at the same time salaries of tax department officials are also being increased so that nobody indulges in corrupt practices," the finance minister said. During the next 10 days, he pointed out, the report of the Task Force on Tax Administration will be circulated to government agencies. "We are bringing fundamental changes in tax system", he said adding, "the major tax laws will be improved." "Tax to GDP ratio has been lowest during the last 10 years and now we have decided to increase our revenues by overhauling the entire tax machinery", he said adding, "a number of changes have already been made which have resulted in unprecedented 15 per cent increase in revenues last year and during the first 8 months of 2000-2001. Responding to a question the finance minister said latest estimates propose, there will be a production of 10.8 million cotton bales this year. Similarly, he said there will be over 18 million tons of wheat production despite water shortage. "Moreover, there is going to be an all-time high 7 per cent industrial production this year, which will help us to create more jobs", Shaukat Aziz added. He said Agricultural Development Bank of Pakistan (ADBP) has been directed to extend 20 per cent additional loans to farmers. In reply to a question, he said, social sectors received25 per cent more funds in 2000-2001 which are further being increased in the next budget. "I cannot give you the exact increase because it is a budget secret but I can tell you, education will get a fairly good allocation in social sectors in the budget for 2001-2002", he said. Asked about the role of the donors in the revival of the economy, the finance minister said the most important thing is the revival of confidence of international lending agencies and multilateral creditors. He referred to his meeting with the visiting vice president and senior World Bank Economist Nicholas Stern on Friday and said, he acknowledged that the government was implementing structural reform agenda to revive the economy. "Stern admits everything went wrong in Pakistan during 1990 decade for which international donors are also responsible as they never cared to know what was happening in this part of the world", Aziz disclosed. Nevertheless the finance minister quoted the senior vice president of the World Bank as having said, "Pakistan now needs to stay at course and the sustainability of reforms is very important to have long term positive changes in the economy. He said, donors are saying that implementation was a key to bring changes. "We are hopeful to get $6 billion exceptional assistance from the donors which also includes rescheduling of loans by the Paris Club", the finance minister said. DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS 20010331 ------------------------------------------------------------------- IMF approves $133m tranche ------------------------------------------------------------------- Tahir Mirza WASHINGTON, March 30: The board of directors of the International Monetary Fund on Friday approved a second tranche of $133 million for Pakistan. The release is part of the overall standby facility agreed with Pakistan last year. The first tranche under the standby facility was made by the IMF in November last year, totalling $192 million. News of the second tranche's approval came on Friday afternoon at the conclusion of the IMF's board meeting. After the IMF board's approval, Mr Eduardo Aninat, Deputy Managing Director and Acting Chairman, issued the following statement: "Pakistan's achievements to date under the programme supported by the Stand-By Arrangement have been encouraging. Inflation, the balance of payments, and the budget balance have been better than expected, and the build-up of official reserves has been brought in line with programme assumptions. Economic activity was lower than expected, however, because of adverse weather conditions. The implementation of important structural reforms has been on track, including those on fiscal transparency and the rationalization of energy prices. "To consolidate these achievements and build a solid foundation for sustained high growth over the medium-term, the authorities will need to pursue further macroeconomic adjustment and implement the structural reform programme. A key challenge will be to achieve the targets for foreign exchange reserves, which will require a tightening of monetary policy and coordination of monetary and exchange rate policies. The authorities' commitment to make further progress toward a genuinely market-based exchange rate policy will also help. "Another challenge will be to boost revenue collections, a key pre- condition for containing the fiscal deficit while increasing social and pro-poor spending. This will require resolute action to broaden the tax base and strengthen tax administration. The extension of the sales tax coverage, and steadfast implementation by the Central Board of Revenue of the recently adopted short-term action plan to improve tax administration, will be critical. "Other reform priorities are to further improve governance in the management of public resources, develop a transparent and business- friendly economic and regulatory environment, continue the restructuring of public enterprises, accelerate privatization, and strengthen financial soundness and efficiency." DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS 20010330 ------------------------------------------------------------------- Rise in imports to improve revenue ------------------------------------------------------------------- Ihtashamul Haq ISLAMABAD, March 29: Pakistan's imports increased by 10 per cent in February and the first half of March, making the job of the Central Board of Revenue (CBR) relatively easy to achieve its revised Rs 417 billion revenue collection target at the end of the current financial year. "The latest is that our imports have increased by 10 per cent against four per cent upto January, which will certainly help us to achieve the revised annual target of Rs417 billion," Wakeel said. Talking to Dawn on Thursday, he said imports target of 12.7 per cent was likely to be achieved soon as the business activities were picking up. Also, he said in terms of new inter-bank dollar rate, imports were also on the increase. Wakeel pointed out that 40 per cent direct and indirect taxes were linked with imports. "If the imports are not picking up, the job of the CBR is becoming difficult to achieve its revenue collection target." Responding to a question, he said CBR had not decided to further slash its revenue target from Rs417 billion to Rs386 billion. "In fact the Finance Division has not asked us officially to reduce the target to Rs417 billion and we are still working on the basis of Rs430 billion annual target," the Member Tax Policy said. Giving the latest details about revenues upto February, he pointed out that the CBR had recovered Rs76.2 billion in direct taxes against the target of Rs78.8 billion. Similarly, Rs96.7 billion were collected in sales tax against the target of Rs106 billion. In central excise, the CBR collected Rs31.6 billion against the target of Rs30.1 billion, and Rs39.2 billion were recovered in customs against the target of Rs39.8 billion. "As I have told you that we are still working on the basis of our Rs430 billion target which shows that we have achieved 56.7 per cent target during the first eight months of 2000-01", he said. He regretted that people did not realize that revenue collection targets were set on the basis of certain assumptions and that whenever there were changes in those assumptions, revenue targets were also readjusted. "If your GDP target is reduced it automatically hurts other sectors. Therefore, the CBR should not be called as being irresponsible or negligent." Talking about 2/3rd revenue leakages, he said with the computerization of system at Karachi Custom House, these leakages were greatly being plugged. "Under-invoicing and mis- declarations are being checked very thoroughly, which is helping us to increase our revenues," he added. 'Under-reporting,' he said, 'is one of the major issues now being taken up, as the Central Board of Revenue had received back 1.6 million tax survey forms against the circulated 1.9 million forms.' All the information was now being fed into the computers and those who had misdeclared their assets would soon be asked to pay their taxes according to their income and assets. "But there is no plan to fix any penalty against under reporting of tax," he clarified. In reply to a question, Wakeel said within next 15 days, profiles of 100,000 under-declarers would be sent to the five regional commissioners (RCs) for actions. "These RCs will only ask the under-declarers to pay their due taxes and will not penalize them for concealing facts in their tax survey forms or tax returns," he added. DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS 20010326 ------------------------------------------------------------------- SAP: Call to oust corrupt men ------------------------------------------------------------------- Ihtashamul Haque ISLAMABAD, March 25: The Debt Reduction Management Committee (DRMC) has identified a number of Social Action Programme (SAP-I) projects whose "choice was poor". A report prepared by the DRMC says the government should remove corrupt elements from the SAP projects so as to ensure that the international donors continue to provide funds. The report stresses the importance of borrowing judiciously and using borrowed funds with utmost efficiency and effectiveness. "When this principle is not adhered to, there is an increase in debt with meagre economic outcomes in terms of growth, exports and revenues and in this way the debt burden increases," it says. As for the SAP-I projects whose choice was poor, the report says: "The SAP-I represents another kind of failure: failure of implementation." Despite the fact that the annual average growth rate of the economy hovered around six per cent over the decade 1980-1990, the fruits of growth did not trickle down sufficiently, the report notes. It was against this background that SAP-I was conceived and launched by the government in 1992-93, initially with its own resources and subsequently with support from donors in 1993-94. An outlay of Rs127 billion for three years was provided by the World Bank, the Asian Development Bank, the Netherlands and the UK, with the government and donors shares at 75 per cent and 25 per cent respectively. The programme addressed four important sectors: primary education, basic health care, population welfare and rural water supply and sanitation. The report points out two flaws in the SAP-1. Firstly, local communities, NGOs and the private sector were not involved in the SAP-1 in a meaningful manner. Secondly, bureaucratic procedures and delays hampered donor financing. The government launched a five-and-a-half-year SAP-II in Jan 1997 at a cost of Rs499 billion out of which Rs101 billion was to come from the international community. DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS 20010325 ------------------------------------------------------------------- Foreigners shy to make big investment ------------------------------------------------------------------- Jawaid Bokhari KARACHI, March 24: The government has succeeded in improving its credibility at international level with financial institutions, credit rating agencies and bilateral creditors. But, a major factor which is lacking is the business confidence. Foreigners do not find the future very encouraging and are shy to make any big investment. The International Monetary Fund (IMF) is on board. The first tranche of the stand-by arrangement (SBA) has been disbursed and the second is likely in April. The SBA conditionalites have been relaxed. Paris Club has rescheduled debts. Hubco dispute has been settled and sovereign guarantees have been renewed. The profits of the multinationals have improved. The profit/dividend payments by multinational corporations and higher interest payments on account of the special dollar bond spearheaded the larger capital outflows in second quarter of current fiscal. MNCs, like Shell and Levers, have improved their performance. The number of listed companies paying dividends has increased. But the over all growth in the large scale manufacturing sector in the first half of current fiscal declined to 3.1 per cent from 7.8 per cent during the corresponding period last year. Financial analysts at a foreign brokerage house say the foreign investors are impressed by the performance of some of the big corporates, listed on the Karachi Stock Exchange. It is the macro- economic policies that is stalling decisions at micro-level. Direct foreign investment fell to $143 million in first half of current fiscal from $307million in corresponding period last year. Portfolio investment is stagnant. Analysts say the portfolio investment has declined because there is no depth in the markets. There is no opportunity for the level of investment that foreigners are looking for. It is difficult to get shares of good companies and often difficult to sell stakes in the market. The short-term nature and the size of the SBA - $692 million (with the daunting conditionalities attached to it) have not removed the investors' concerns. Bankers say that foreign investors do not see the future encouraging. Domestic private sector is ploughing back corporate savings into small investments but no big investment is taking place. These investment are in textiles and cotton-based industry. The textile industry is modernizing to face stiff competition in the days ahead. Exports of software are often over-invoiced, say some bankers, by some business groups to convert black money into white. The remittance is managed through purchase of foreign exchange in kerb and the cost of conversion works out to 10 per cent. There is no tax on incomes of software exports. Some of these funds are ploughed back into investment. And investments are not taking place as much in listed companies as firms outside the stock markets, whether it be private limited company or non-listed public limited companies. According to the Annual Report-2000 of the Securities and Exchange Commission of Pakistan (SECP), 37 public limited and 1,541 private companies, limited by shares, were registered under the Companies Ordinance 1984. But these public limited companies preferred not to go for listing. There were only three initial public offerings. The SECP efforts to induce payments of dividends did not encourage those, who want to build reserves for industrial expansion and modernization of their plants, says an industrialist. He says there is a need for corporate savings to be channelized into investment. Big corporates are also shy of making full disclosures as required in case of listed companies. On the other hand, foreign investors are reluctant to invest. Presenting a rosy picture of Pakistan's economy to lure in foreign investment before a British banker, the head of a local bank concluded his presentation with an optimistic note. He said: "Our agriculture has been hit by drought and water shortage. We now see the clouds. They will bring rains." The foreigner retorted: "I come from London and know better. These clouds will bring no rains." This is how the local banker summed up the viewpoint of foreign investor. His views were confirmed by a financial analyst, working at a foreign security house. He told Dawn that when invited to invest, another foreign banker bluntly told his Pakistani hosts that the country should not expect any significant investment till such time that the democracy is restored. Investors do acknowledge that the government is sending positive signals on a number of issues. These include its efforts to boldly control sectarian strife, its distancing from Afghanistan on destruction of statues and the retirement of Dr Abdul Qadeer Khan, indicating its softening attitude on nuclear issue under global pressure. Political instability is also haunting foreign investors. National elections are about 18 months away. They say the game of politics in this country is unpredictable. The political future is uncertain. They also complain that policies and decisions of one government are reversed by another. Often ministers with economic portfolios are unable to honour their commitments. Officials complain that the domestic private sector, which depended on government patronage, foreign credit lines and prospered on bank defaults, tax evasion and non-payment of utility bills, has not adjusted itself to the new environment. Defaulters are being made to pay. Accountability has become an ongoing process. Foreign credits have dried up. Prudential lending by financial institutions makes borrowing difficult. DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS 20010329 ------------------------------------------------------------------- New export finance scheme launched: Facility in foreign currency ------------------------------------------------------------------- Reporter KARACHI, March 28: Exporters can get export finance in dollars from April 2 under a foreign currency export finance facility created out of an Asian Development Bank loan. The State Bank on Wednesday launched the facility that would help domestic manufacturers buy foreign inputs for exportable goods and give small and medium size exporters access to export financing. SBP said in a circular to all banks that effective from April 2 the facility would be available to the exporters either for purchase of inputs domestically or for financing their imports of inputs and raw materials against import letter of credit. The circular says the facility will be a dollar-based window and self-liquidating and will be available for pre and post shipment. The term self-liquidating means exporters can sell the dollars borrowed under this facility in the inter-bank market to secure rupee funds to meet their requirements. Under the scheme, market based export finance will be available to small and medium size direct exporters and their suppliers i.e. indirect exporters for inputs linked to an export order. The circular says the facility will run parallel to existing export finance scheme. Bankers say the launch of foreign currency export finance facility is prelude to elimination of subsidy on export finance scheme. They say the central bank may soon link the mark-up on export finance to treasury bills yields as per the demand of the IMF. The circular says financing of inputs under foreign currency export finance facility would be available for a maximum period of 180 days for both direct and indirect exporters. It says that any export order, export letter of credit or any other customary export document which evidence a firm export order will not be eligible for grant of any other facility including normal export finance to the extent of foreign currency export finance exposure. Following items are not eligible to be financed under foreign currency export finance scheme: (i) arms and ammunition and other military material (ii) radioactive and associated material (iii) nuclear reactors or parts thereof, fuel (cartridges), non irradiated nuclear reactors (iv) luxury items (v) consumer goods and (vi) such other goods and materials as may be specified from time to time. DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS 20010327 ------------------------------------------------------------------- Govt not to expand privatization list ------------------------------------------------------------------- Khaleeq Kiani ISLAMABAD, March 26: The government is targeting to complete at least nine major privatization transactions, before the end of current calender year, said Minister for Privatization Altaf M. Saleem. These include mega transactions like Pakistan Telecommunication Company (PTCL), Pakistan State Oil (PSO), United Bank (UBL), Allied Bank (ABL), National Investment Trust (NIT), government's working interests in nine oil and gas fields, fertilizer companies, Oil and Gas Development Company (OGDCL) and gas meter factory. In an interview with Dawn on Monday, the privatization minister said the commission had not brought new units on the auction block, though ultimately everything, which could be termed as business would be transferred to the private sector provided it did not involve national security or strategic importance. "But we don't want to expand the list just for the sake of expansion and put public sector units in an uncertain position, which is neither here nor there." The initial list of 49 units has the only increase of Pakistan International Airlines (PIA). He said the intention of the government is to maximize sale proceeds in the shortest possible time, so as to address the debt problem. He said that J P Morgan, one of the top 10 financial institutions of the world, have been appointed financial advisors for the sale of Pakistan State Oil (PSO). "Our first target is to complete privatization of PSO by the end of this year as one entity to maximize its proceeds," said the minister. He said financial advisors would start soft marketing of the PSO by mid of this year. He said that some financial advisors of Privatization Commission have reported strong interest from world energy firms in Pakistan, when compared with situation around four months ago and they were expecting good prices for oil and gas units. On the directives of the chief executive, he said, the Privatization Commission restructured 10 to 12 units to control public sector haemorrhage through rightsizing, liquidation and other cost cutting measures. The real result of these measures would be estimated after six months, when accounts are analyzed in June and then in December. Losses of Heavy Mechanical Complex (HMC), he said, have been controlled through downsizing while small units have been liquidated, the minister said. Saleem said government has decided to divest 58 per cent government shares in National Investment Trust (NIT) in one go, but the Privatization Commission will have to look for a bankable and trust worthy management to run it in the private sector. The reason, he said, was that NIT money belonged mostly to thewidows, retired government servants and small investors and its credibility factor was more than banks. The Privatization Commission Board, which will meet on March 31, will consider this issue to initiate valuation of NIT's assets and shares, he added. He said the government had already declared Pakistan Industrial Credit and Investment Corporation (PICIC) as a private sector entity and has allowed public sector shareholders like State Life Corporation, NIT and others to decide about their shareholding at their own. He said the commission was ready to take PTCL transaction anytime to the market and its sale process would hopefully be completed before the end of this fiscal year. Talking about privatization of Karachi Electric Supply Corporation (KESC), Saleem revealed that the whole process was in fact being done by the Asian Development Bank (ADB), which has acquired around five per cent shares in the power utility. The ADB has recently released $250 million for the KESC and half of the financial advisor's fee would be shared by it. He said the selection of the financial advisor will also be made by the ADB by April 5, this year. He said a final decision could be made only after the financial advisors completed their job, but two options could be considered to privatize the KESC. One option would be to divide the utility into a distribution and a generation company and sell them separately and the other option is to sell it in a consolidated form of one entity. DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS 20010327 ------------------------------------------------------------------- Privatization Commission to sell UBL this year ------------------------------------------------------------------- Jawaid Bokhari KARACHI, March 26: The Privatization Commission (PC) is in a hurry to sell the United Bank. It does not want to wait for the bank's restructuring to fetch a better price. The PC chairman, Altaf Saleem, has been quoted as saying that the date has been forwarded by almost a year, keeping in view the appetite of the market. Expression of Interest (EOI) for selling 26 per cent of the shares in the UBL will be invited this month. On the eve of EOI, the PC chairman chose to reveal that the government has rejected the UBL's request for injection of Rs22 billion. He also added that the bank was given Rs21 billion in 1997. His statement indicates that UBL is in financial distress and a distress sale will follow. UBL would be sold cheap. Perhaps, it is a positive signal for prospective buyer or buyers. The PC's sudden move to reverse its own decision and to sell the bank before restructuring has however created suspicion in the market that the transaction may be designed to suit the appetite of a strategic investor and the deal may have political fallout. Transparency would be needed to assure the market. Addressing a seminar in Islamabad Mr Saleem said that the time had come to leave the restructuring process to the new management. There is also a proposal that the government should take over the unsold bad assets to clean the balance-sheet of the banks and financial institutions intended to be privatized. The buyers would be handed over long-term bonds in lieu of non-performing assets. But UBL would not be the first case in which PC has reversed its decision. There is a similar situation in case of ABL. The PC first decided that the 49 per cent of the ABL shares would be offered for public subscription.It retraced its steps. Now it intends to invite EOI for sale of 49 per cent of ABL shares to a strategic investor.The investor would be required to buy the entire block of 49 per cent shares. In ABL's case, acquisition of 5-10 per cent shares would enable any purchaser to join hands with the Employees Group and its associates, unacceptable to the State Bank, to manage the bank. PC has, however, explored the market and perhaps identified the prospective buyer/buyers who can become strategic investors. UBL sources said the bank had asked the government for Rs21 billion provisioning requirement for non-performing government-related foreign loans and taxes over-charged by CBR and Azad Kashmir government. While not conceding to the UBL request, they added that the government has given commitment at the highest level to enable the bank recover stuck-up funds on these counts. The bank sources were confident that given the commitment at the highest level, positive results would ensue before the UBL is privatized. The UBL president, Amar Zafar Khan, refused to comment on the PC chairman's disclosure that the bank's request for Rs22 billion has been turned down. He, however, added that the bank was doing restructuring on its own and a lot of positive changes would be demonstrated in the annual accounts for fiscal 2000. Asked to elaborate, he made the following points: UBL is reporting record level of operating profit, double the previous year's level, despite the earning drag of a non-performing portfolio, that proportionate to its total assets, is larger than any other bank. UBL's revenue to expense ratios and intermediation cost is better than all other large network banks, including those that are already privatized and show better productivity. The bank has the highest growth in deposits in 2000 in comparison to all larger network banks as stated by State Bank governor in a press interview. UBL has a record loan growth of Rs.14billion and an increase of Rs10billion in trade volumes in fiscal 2000, with nominal credit losses.This indicates that the UBL is succeeding in identifying the right borrowers, is improving its credit monitoring and this has enhanced the earning base of the bank. DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS 20010327 ------------------------------------------------------------------- World Bank for faster execution of reform programme ------------------------------------------------------------------- Ihtashamul Haque ISLAMABAD, March 26: A high-powered group of World Bank's Executive Directors (EDs) on Monday called upon the government to speed up implementation of its structural reform programme. "We appreciate the government's structural reform programme which we believe needs faster implementation," group head Franco Passacantando told a news conference. "The executive directors feel comfortable with the discussions the Bank's management is having with the government to support their programme," he said. He, however, pointed out that the EDs had stressed the need for faster implementation and called for building internal as well as external support for reforms through more thorough and sustained communication both at home and abroad. Asked whether the EDs had discussed with the government political issues such as taking political parties into confidence for obtaining support for the reform programme or the CTBT, Mr Passacantando said: "This is not our agenda to discuss political issues...we concentrated only on economic matters." Nevertheless, WB country director for Pakistan and Afghanistan John Wall said the Bank planned to discuss various issues with political leaders and other people from the private sector to ensure continuation of the reform programme. Mr Passacantando said the group was "very concerned" at the ongoing drought situation in the country and added that they would make a positive report to the Bank's board. During their five-day stay, he said, they had visited projects, including the on far water management programme and the Ghaza Barotha dam, besides meeting the chief executive, the finance minister, the State Bank governor and chairmen of the Central Board of Revenue, the National Reconstruction Bureau and the National Accountability Bureau. The main subject of discussions was poverty reduction and issues relating to governance and civil service reform, said the group leader, adding that tax and financial sector reforms, water management, privatization programme, anti-corruption campaign and devolution programme had also received importance during meetings. DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS 20010328 ------------------------------------------------------------------- ADB links soft loans to good governance ------------------------------------------------------------------- Ihtashamul Haque ISLAMABAD, March 27: The Asian Development Bank has linked the disbursement of highly concessional loans to good governance in Pakistan and consistency in its policies. "The ADB can consider offering of only soft loans on zero interest to Pakistan but then you have to achieve the objectives of good governance as we are concerned about poor project implementation in the country," ADB's new resident representative in Islamabad, Marshuk Ali Shah, told a news conference on Tuesday. However, he said his bank had decided to offer $450 million during 2001, and the purpose was to help Pakistan build up its foreign exchange reserves and improve balance-of-payment position. "Within next two to three weeks, the ADB would disburse $160 million for four projects," Mr Shah stated. Elaborating, he said the ADB would disburse $50 million for the energy sector, $30 million for trade enhancement, $50 million for trade and export promotion, and $30 million for the macro-credit bank. The ADB representative pointed out that his bank was also considering certain assistance for mitigating the severe effects of continued drought conditions in Pakistan. "We want to strike a new ADB role in Pakistan," he said, adding that poverty reduction was one of the major problems for which the bank could extend additional funding. Mr Shah told a reporter that currently the ADB was offering 60 per cent soft loans and 40pc programme loans, which carried an interest rate of 6.5pc. There were only 1.5pc service charges for soft loans, he clarified. He said the ADB would consider the government's request for emergency assistance for human resource development and building of reserves, "but then the government will have to take some painful decisions like making timely decisions about projects while ensuring adequate and correct use of funds." Pakistan could have increased Direct Foreign Investment provided it was ready to fully and timely implement its reform agenda, he said. He cited the examples of Barani area development project and women project which could not take off due to the government's inability to appointing project directors and accounts officers for them. "Decision making process is worst in Pakistan," the ADB representative observed. He regretted that the government had slashed the Public Sector Development Programme from Rs120 billion to Rs110 billion. He advised the government to narrow its budget deficit by increasing resources and restricting its spending. In reply to a question, he said Pakistan repaid roughly $350 million every year to the ADB. "Everybody is watching Pakistan and if the government produces desired results to impalement its reform agenda then something could be done by multilateral agencies," he said. DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS 20010328 ------------------------------------------------------------------- SBP offers special TBs to banks: End-March NDA target ------------------------------------------------------------------- By Mohiuddin Aazim KARACHI, March 27: The State Bank has asked banks to buy special treasury bills out of the rupee equivalent of their rolled-over foreign currency swap deposits. Bankers say SBP has offered the T bills not at the normal rates but at a higher rate of interest that it is paying on the rupee equivalent of swap deposits. Sources close to SBP told Dawn the central bank has done this to mop up excess liquidity from inter-bank market to meet the IMF target of keeping its net domestic assets at Rs8 billion at the end of March. Bankers say the letter written to them on this topic does not specify the tenure of the treasury bills, the State Bank wants them to buy. But it is very much understood that they have to buy T bills of at least one week maturity so that SBP can meet its end- March target of NDA. Bankers say since SBP is to pay them a special interest rate - much higher than the normal yield on treasury bills - on the bills purchased out of the rupee funds of rolled-over foreign currency swap deposits, most banks would invest the funds into treasury bills at least for one week to help SBP contain its NDA. Under the $596 million IMF standby credit, the State Bank was initially supposed to keep its NDA at minus Rs39.6 billion but later on the target was revised to plus Rs8 billion to save the banking sector from plunging into a severe liquidity crisis. Bankers say the SBP officials hope to offload T bills of at least Rs25 billion onto inter-bank market if most banks do not show any reluctance in buying special bills out of the rupee funds of the foreign currency swap deposits. They say the total amount of the rupee equivalent of foreign currency swap deposits is about Rs25-30 billion. No official word is available on how much excess liquidity, SBP needs to mop up from the market to keep its NDA at Rs8 billion at end of March but bankers close to SBP say it could be anything more than Rs30 billion. If that is the case SBP may also have to suck in at least Rs5 billion from the inter-bank market at its open market operation due next Thursday. Some bankers say this should not be a problem for SBP, because the market is currently surplus by more than Rs5 billion. Both local as well as foreign banks used to mobilize foreign currency swap deposits from abroad before Pakistan went nuclear in May 1998 that created a serious foreign exchange crisis here and forced the country to ask banks to rollover bulk of these deposits. DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS 20010325 ------------------------------------------------------------------- State Bank buys $1.2bn from kerb ------------------------------------------------------------------- Mohiuddin Aazim KARACHI, March 24: The State Bank has bought about $1.2 billion from the open currency market in less than nine months of this fiscal year. Bankers close to SBP say the central bank may end up buying at least $1.5 billion at the close of the fiscal year in June. They say SBP stepped up dollar buying from kerb in this quarter that enhanced volume of its outright purchases from $755 million up to December 31, 2000 to about $1.2 billion up to March 22, 2001. Bankers close to SBP say the State Bank made aggressive buying from kerb this month in the wake of rising demand for dollars at the quarter-end. Normally SBP spends large amounts of foreign exchange at every quarter-end in official and corporate debt servicing as well as in footing oil import bills. What made SBP spend still more in this quarter was payment of about $100 million to people travelling for Hajj and more than $200 million to banks against those foreign currency swap deposits that they had not rolled over. Banks rolled over 75 per cent of over $1 billion swap deposits for two years starting mid-December and as such SBP had to return to them more than $250 million between December 2000 and March 2001. Leading currency dealers say SBP dollar buying is one of the reasons behind the ongoing fall of the rupee in the open market. The rupee has lost about six per cent to a US dollar in kerb and 5% in inter-bank market so far during this quarter. "SBP continues to buy dollars and that is one of the factors weakening the rupee in kerb," said a leading money changer in Karachi who declined to be identified. Senior bankers close to SBP also said the central bank was making small purchases from kerb almost on daily basis. They said SBP buying from kerb might further go up in the remaining days of this month as quarter-end payments would mount. They said the central bank might end up buying at least $1.5 billion at the end of the fiscal year in June. In last fiscal year SBP had bought $1.6 billion from the open market that had initially invited criticism from the IMF. But later on the Fund had realized that in the absence of financial support from international financial institutions the country had no option but to buy dollars from kerb. That was why the Fund made little objection on SBP plans for buying dollars also in the current fiscal year when Pakistan started negotiating a $596 million standby credit. There is no official word on whether IMF has put any quantitative restriction on such buying for this fiscal year but bankers close to SBP say IMF understands that SBP may have to buy at least $1.5 billion. They say SBP's outright buying from kerb is in addition to its long-term buying of greenbacks in dollar-rupee swap both from banks as well as from money changers. The total amount of such swaps is not known but bankers close to SBP say SBP has bought $65 million from banks in more than one-year swap in the past few weeks. Despite SBP's outright buying of about $450 million from kerb in less than past three months net liquid foreign exchange reserves have fallen during this quarter. Net reserves fell to less than $675 million in mid-March from $1 billion at the end of December 2000.Back to the top
EDITORIALS & FEATURES 20010325 ------------------------------------------------------------------- 'I could be a solution' ------------------------------------------------------------------- By Ardeshir Cowasjee ON March 19 The Helpline Trust of Karachi (an affiliate of which is the Consumers Protection Council) held a question-answer seminar, supposedly our form of Hard Talk, on the subject of 'The Crisis of Leadership in Pakistan'. The founder and maker of this Trust is Hameed Maker who, along with his few member citizens, keeps the platform throbbing, but in fact he is the captain, chief engineer, boatswain, chief cook and bottlewasher. To start off the seminar, Maker made an introductory speech, telling us, inter alia, that "the meaning of leadership is much more than motivating and influencing people to perform. A leader's character must be based on proven character traits, principles, honest values, a code of conduct, and ethics. A leader must also be able to inspire confidence and trust. Unfortunately none of our recent leaders have possessed these leadership qualities. We have tried and seen various forms of democracies and military rules under deceptive leaders, ideologies and different disguises. All have left us more confused and economically and morally poorer." On the mat was none other than Sardar Farooq Ahmad Khan Leghari, a former member of the PPP and a former president of Pakistan, handpicked by Benazir Bhutto. He was sworn in on November 14, 1993, during her second round as prime minister (October 20, 1993, to November 5, 1996) and resigned on December 2, 1997, during Nawaz's second premiership (February 17, 1997 - October 12, 1999). He is now president of his own political party, the Millat Party, which he formed after he climbed down from the top slot. We assume he was elected to lead his party by its loyal members and will remain as its leader until it folds or slides into oblivion. Last Monday Leghari was full of himself, and like all our disgraced politicians made an attempt to convey that he, unlike the rest, was as pure and pristine as driven snow. The taped record of the well attended seminar makes an interesting transcript. When one question was put to him as to whether he considered himself part of the lack of leadership problem or part of the solution, he made no bones about unabashedly admitting that he "could be a solution." Leghari is a seasoned speechifier and can hold forth with the greatest of ease for hours. He is stuck in the time warp of his presidentship, obsessed by his relationships with both Benazir and Nawaz, with Benazir holding the upper hand. Very few questions were asked as Leghari's answers to each was a long speech on his presidential experience which wandered far off and beyond the point. During one of his stories on the subject of how he dealt with the two recalcitrant premiers, he wandered on to the matter of the murder of Benazir's brother as being one of the reasons for his having to dismiss her and her government. One remark he threw at us was that we all knew who was responsible for the murder of Murtaza Bhutto on September 20, 1996. Later, he was questioned on this statement of his and asked to name the murderer. He admitted that he did not 'know' for sure who it was but that he 'suspected' it was Asif, as Benazir had gone to great pains to provide cover for him during the aftermath of the murder when he was openly accused in the press of being its mastermind. At least his assertion was more precise that of the chairman and the two members of the tribunal of inquiry appointed to investigate the circumstances leading up to the murder, Justices Nasir Aslam Zahid, Dr Ghous Mohammad and Aminullah Khan in their report released in May 1997 concluded that there was a plan to the murder and that the plan "must have been cleared by a much higher authority" than the two most senior policemen involved. They failed, naturally, to even hint at the identity of the "much higher authority". Leghari waxed eloquent on how Benazir, Asif, and their party in power had robbed the country dry and rendered it bankrupt, and that one reason for his having to remove her under Article 58(2)(b) of the Constitution was that had he not done so at that particular point in time Pakistan would have defaulted. As we all now know, this constitutional article, good or bad as it may have been, was a much needed safety valve which kept 'democracy' chugging along, albeit to our detriment, but avoided an army takeover. The equally corrupt and irresponsible Nawaz, who was at least capable of estimating his own level of corruption, during his second round felt that it could be used against him once again as it had been in 1993. Having found Leghari to be not too straight a man in his presidential-political dealings, three months after being sworn in once again he produced his 13th Constitutional Amendment, doing away with the offending Article, had it swiftly passed by an acquiescent assembly and Senate, and chased Leghari all the way to Choti to have him put his signature to it. Leghari need not have signed, though bound to do so under the Constitution. He could have resigned at that stage, boosted himself in the eyes of the people and gone down in Pakistan's history as a rare breed of man. His excuse that had he resigned, the acting president, the Muslim League Senate Chairman, in any case, would have signed it with great eagerness, does not absolve him. When talking about the incident of the storming of the Supreme Court which took place on that disastrous morning of November 28, 1997, Leghari rightly admitted that had the army sent four men in commando uniform to merely stand at the gates of the court, the storming would not have taken place. Now, as supreme commander of the armed forces, as he was under the Constitution, could he not have used his persuasive powers with the army chief, who was reluctant to move on his own, and saved the court from the vandalism and humiliation heaped upon it? What we cannot forget as far as Leghari is concerned is his involvement with that known corrupt banker Yunus Habib who was ultimately convicted and jailed. Placed as he was, had he any business to get himself embroiled in shady affairs with shady characters merely for pecuniary gain? We have suffered Benazir twice and Nawaz twice. Each in his/her second round, with Leghari as president of the republic, did far more wrong than in the first. The people surely do not again want or need Farooq Leghari in any future position of power. His friends and 'admirers' should advise him to live off his ancestral properties and whatever assets he has gathered unto himself along the way and renounce politics for his own and our good. He should be satisfied with the fact that he at least occupies a fairly notorious place in the history of Pakistan in the 1990s and is not merely a footnote. >From the past to the present, and I refer to Kunwar Idris's column in this newspaper last Sunday in which he listed the 'retreats' of General Pervez Musharraf during his eighteen months as Chief Executive of the land, as enumerated by suspended Senator Iqbal 'Groovy' Haider: refusing to sign the CTBT, surrendering on the announced procedural changes in the blasphemy laws, continuing the separate electoral system, restoring zakat grants to religious seminaries which impart military training, refusing to apply to the Supreme Court for a review on the interest verdict, failing to appeal against the Shariat Court ruling on family laws, negotiating with extremist groups when they issue their frequent 'threats', encouraging the formation of militant organizations, amending the PCO with respect to the status of Ahmadis, etc, etc. Retreats are at times strategically necessary. As Churchill put it after Dunkirk: the British expeditionary force made a 'glorious retreat'. From his recent remarks and body language it would appear that General Musharraf has regrouped and is attempting to swing along the right path. He is considering signing the CTBT - this is a must. He talks of the difficulty which he is facing having to deal with 1.5 million extremists and their spreading tentacles, the uneducated bigots who can sink any country or empire. One and a half million is a substantial number, and ten of them in Lahore or Karachi, or five in Islamabad, Quetta or Peshawar, could easily disrupt any form of governance, particularly when law and order is not enforced. What the general must remember is that people cannot forgive a military government, with the funds, force and power it has, for refusing to, or being incapable of, imposing on this unruly country some stable, strong form of law and order. Sufficient numbers of rangers are camped in our cities. Surely this force can do what the police are unable to do. The first observation of the founder of this country was that the first duty of any government is to ensure the safety of the lives and property and religious beliefs of its citizens. After 54 years, is it not time that the first 'duty' is finally carried out? DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS 20010330 ------------------------------------------------------------------- A question of horses ------------------------------------------------------------------- By Ayaz Amir FORGET about large corporations. Try running a corner retail store part-time. You'll have a job on your hands balancing the books and running up a profit. Yet is it not a little strange that ordinary rules of prudence which would apply to any business are regularly disregarded when it comes to the running of Pakistan's premier institution: its puissant army? In recent times no professional army of such size and standing has had so many part-time chiefs who have dabbled in politics as much as they have devoted time and attention to their own calling. Those who rode off into the sunset when their time was up are the timorous exceptions in this story; the part-time generalissimos who commanded the army, ruled the country and presided over some of its more epic disasters the dispiriting norm. Now with General Musharraf saying that come October when his term as army chief expires he will not be retiring, thus confirming what has been suspected for some time, the norm once again is set to take precedence over the exceptions. Of the two roads before him Musharraf has chosen the one taken not by Karamat, Kakar and Tikka Khan - the on-time retirees and in Karamat's case the premature retiree - but by his more illustrious predecessors: Ayub, Yahya and Zia. Maybe it is necessity (another name for the Fates) which is determining his course. After all he finds himself in power much as the afore-mentioned caesars did. And the retention and preservation of power puts a premium on sound insurance policies. While elected leaders look to their approval ratings, un-elected leaders have other priorities. Turning the Christian doctrine of reciprocity on its head, they try to ensure that what they have done unto others happens not to them. In other words, that they are not hoisted on their own fire-engines. That is why in a setting such as Pakistan's they try to provide for themselves by riding two horses at the same time: that of the army and political power. But a pressing question arises. If in this one particular General Musharraf is taking out the insurance policy of his predecessors, what makes him so sure he will remain immune to their example or fate (take your pick) in other particulars? Ayub and Yahya came to sticky ends. So in a manner of speaking did Zia. Eventually, all the insurance policies in the world could not save them. Why? Because the very fact that they rode two horses, and no Roman slave was around to whisper into their ears that they were mortal, befuddled their vision and undermined their horsemanship. As Plato instructs in the Republic, don't mix professions. Stick to what you know best. As any barman will tell you, don't mix your drinks. As president, Ayub had a nominal C-in-C in the loyal Musa Khan (there being no running away from Khans in Pakistan). But Ayub in everything was very much his own master and it was he not Musa who took the fateful steps which led to the futility of the 1965 war. Yahya of course was architect to Pakistan's greatest humiliation. Zia's baleful legacy continues to haunt the nation. What will Musharraf's contribution be to the sum of national achievement? If only the army was clear about its priorities. We have the examples of Thailand, Burma and Indonesia where the army is a domestic player, keen on politics and corporate business and not driven by extra-territorial aims. In Pakistan it is altogether different: domestic and external ambitions impinge upon each other. The army's star status at home encourages it to adopt brave postures abroad. Hence the involvement in Afghanistan and Kashmir. Hence also the confusion surrounding our nuclear doctrine. It is a case of one fallacy leading to another. In Afghanistan all the strategic gains went to the US. We only acquired a set of problems - guns, drugs, refugees - which continue to bedevil us till today. In Kashmir tactical engagement has become an end in itself with no strategic purpose, at least none readily identifiable or consistent with reality. As for our nuclear toys, the fallacies they helped breed led directly to Kargil. This is not to say we should not have acquired a nuclear capability. India perhaps left us with no choice in the matter. But what ill wind drove us to ape India's example and test our nuclear devices? Over-extended reach, over-extended lances, that's our predicament: the tilting at windmills in the distance when more pressing problems nearer home call for attention. Taxes the state cannot collect, law and order it cannot maintain, or at least not adequately. But it must be prey to grandiose if not farcical ambitions. Of course Pakistan is better off than many countries. Of course its people, or most of them, have enough to eat. But that is not the point. Why is its potential lying unfulfilled? Why is the machinery of state stricken by paralysis? Why can't simple things be done? We are not a nation without talent. We don't deserve to be at the bottom of the league. Why then are our affairs so mismanaged? Musharraf is doing the familiar thing, anointing himself pope (wait for Tarar's exit), emperor and warlord. It is as if we have learned nothing from the past. If after all our travails the only solution to hand is the Ayub Khan, Yahya Khan or Zia-ul Haq way of doing things it does not say much for our political ingenuity. Never reinforce failure is a military maxim. What about not following bad examples? At present too much is being taken for granted. Agreed that Nawaz Sharif pushed the army command into taking precipitate action. In trying to remove Musharraf in a manner that can only be called cavalier he no doubt over-reached himself. But then the army's response should have fitted the provocation, not exceeded it. Maybe General Musharraf had to become Chief Executive: a compulsion of the situation he was in. But what is the compulsion in playing Napoleon (who crowned himself emperor with his own hands) in October? If he achieves nothing in two years what does he hope to achieve thereafter? In the wake of such a decision come a hundred other compromises. Because Zia kept extending his term as army chief he had to humour his fellow generals. Thus in his time we had a surfeit of four-star luminaries: Iqbal Khan, Sawar Khan, Rahimuddin, Akhtar Abdur Rehman, K. M. Arif. Grand admirals without ships, air chief marshals without adequate aircraft, full generals more adept at politics than the requirements of command. Riding double horses is dangerous for you can fall in between. A political leader who has the army as his real constituency loses suppleness: knowing he can count on the army's support he acts rigidly when he should be flexible. On the other hand, an army chief who is also political satrap compromises his professionalism. It was not boozing or womanising which did us in in 1971 but a sclerotic high command whose exposure to wealth and power had left it unfit for war. But is wailing or breast-beating going to make the slightest difference? It never has in the past and will not do so now. We are set on a course and must gather its fruits before we can move on to anything else. DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS 20010331 ------------------------------------------------------------------- Partisan politics ------------------------------------------------------------------- Irfan Husain SO the velvet glove is off, and the authoritarian fist of military rule is out in the open. However, the display of strength by the government on March 23 was as hamhanded as it was unnecessary. By using brute force to abort the planned rally of the ramshackle Alliance for the Restoration of Democracy (ARD), the regime showed simultaneously that the alliance was a genuine threat, and revealed its own sense of insecurity. While there may be considerable reason for the latter perception, the fear of the ARD is surely misplaced. Pakistan's political history is littered with alliances made and broken (and the only thing most of them have had in common is the leadership of the indefatigable Nawabzada Nasrullah), but few of them have been as diverse and ineffective as the current power- hungry grouping. The opposition rally was supposed to be held at Lahore's historic Mochi Gate on Pakistan Day, but the area was completely sealed off by thousands of cops. Earlier, a series of pre-emptive arrests had scooped up scores of political leaders. The impression given was that the event had to be thwarted at any cost. So virtually the entire Punjab administration concentrated its considerable resources on preventing what would have been at best a fairly minor political gathering. Poor old Nawabzada Nasrullah was surrounded by a phalanx of Punjab's finest, and when Asma Jehangir and a few of her colleagues from the Human Rights Commission tried to call on him, they were physically stopped and manhandled. When they finally managed to break the siege, they found the 80-year old Nawabzada to be in good spirits, but scarcely a threat to the foundations of the state. A few days later, Shakil Sheikh, the chief reporter of The News in Islamabad, was kidnapped, driven to a remote place, and mercilessly beaten up. His assailants repeatedly told him that "he wrote too much" while kicking him with their boots and hitting him with rifle butts. Although their identity has not been established, the operation has the fingerprints of some spook outfit all over it. Over five decades of independence have done nothing to alter the mindset of our police and security agencies. Under British rule, their primary function was to protect the interests of the Crown; after 1947 this priority shifted to protecting the Pakistani state. The protection of the citizen was a remote concept that was only invoked when the status of an individual was high enough to command the attention of the administration. The rest of us have always been on our own and hence the proliferation of private security agencies. Indeed, most Pakistanis see the police as a threat to life, limb and property rather than as a shield against the lawless. However, instead of reforming the police to bring it in line with today's requirements, successive governments - both elected and unelected - have used it unabashedly as an instrument of oppression against their opponents. While there has been desultory talk of reforms, all the laws, rules and regulations governing the police are from the colonial era. Underpaid, ill-trained, semi-literate and overworked cops are supposed to take on armed criminals and terrorists when all they are really capable of is to beat confessions out of helpless suspects, break up opposition rallies and stand by the roadside for hours when some VIP is expected to drive past. While it is understandable (although deplorable) for ambitious, insecure politicians to resort to strong-arm methods to bully and hound their rivals, for an unassailable military government to do so is incomprehensible. Given the current climate of political apathy, there is absolutely no prospect of any kind of popular movement developing momentum against the government. Indeed, by resorting to mindless violence in a predictable knee-jerk reaction against the ARD, our military rulers have demonstrated that their use and abuse of the levers of power is no different from the politicians they love to revile. By contrast to the treatment received by the ARD, the tame elements of the Muslim League - known by the ridiculous sobriquet of the "like-minded group" - saw the benign face of the military government when it staged its public meeting in Islamabad two days later. United by its determination to pick up whatever crumbs the government dropped from its high table, the breakaway faction of the PML (estimated to be the fifteenth faction to split away from the long-dead mother party) consists of the usual power-hungry professional politicians ready and willing to cut any deal with anybody for a slice of the cake. The government's open favouritism seems to confirm that it is seriously considering the formation of a king's party, the resurrection of assemblies, the election of a pliable prime minister and the elevation of General Pervez Musharraf to the Presidency. While there seems to be very little the opposition can do to prevent this scenario from becoming a reality, the real problems will arise when the next general election falls due next year. In Pakistan, three years in power are enough to tarnish the cleanest and most efficient government in the public view. The scale and magnitude of the problems we face are such that no amount of rhetoric and wishing will even begin to address them. Unemployment, disease, inflation and illiteracy will all be worse next year than they were when General Musharraf seized power in 1999. And whatever facade this government acquires in the meanwhile, anybody associated with it will be punished at the polls. Granted that a sitting government has vast powers to get the electoral verdict of its choice, the amount of rigging it can get away with will be limited. The likely presence of several international monitoring groups during the elections can contribute to minimize the degree of official interference in the process. The rapidly developing situation is reminiscent of the many efforts made by past military regimes to shape events to their liking. Unfortunately, real life politics seldom conforms to parade ground commands. Time and again, General Musharraf's predecessors misread the situation and placed their trust in Quislings who just could not deliver. There is no reason to think he will fare any better. And yet he can pause and reconsider his options: by remaining above the political fray instead of becoming partisan, he can oversee the orderly and quick return to democracy. While our mainstream parties and politicians have been united in distorting and discrediting democracy, the fact remains that there is no alternative available, so we will have to restore it in the hope that politicians will have learned a lesson from this interlude and will do a better job next time. A forlorn hope, perhaps, but it's all we have to think about.
SPORTS 20010330 ------------------------------------------------------------------- Kiwi openers grind Pakistan ------------------------------------------------------------------- HAMILTON (New Zealand), March 29: Matthew Bell and Mark Richardson became just the third New Zealand opening pair to score a century apiece to leave Pakistan struggling in the third Test on Thursday. Both reached three figures for the first time in a Test as New Zealand ended a rain-shortened third day on 260 for two, a lead of 156 over Pakistan's meagre first innings total of 104. Bell scored 105 and Richardson was unbeaten on 106 at the close alongside promoted No 4 Craig McMillan on seven. Just 43.1 overs were possible after rain and bad light interrupted the day, with New Zealand adding 100 runs for the loss of two wickets to their overnight score. Bell and Richardson put on 181 for the first wicket, the fifth- highest opening partnership in New Zealand Test history. Bell was playing his 11th Test and Richardson his ninth as they partnered each other for just the fifth time. Their previous partnerships had been one, 91, 102 and 69. The only other opening pairs to score centuries in the same innings were Glenn Turner and Terry Jarvis against the West Indies in Georgetown, Guyana, in 1971-72 and Stu Dempster and Jack Mills against England in Wellington in 1929-30. Bell and Richardson had to wait an anxious four hours before they got back on the field after the entire second day was washed out. Bell, resuming 45 hours after going to stumps unbeaten on 89 on Monday, took 31 balls to reach his milestone. He achieved it with a thick-edged single off spinner Saqlain Mushtaq in the day's ninth over after 258 minutes and 153 balls, including 16 fours. His parents Gary and Sheryl arrived at the ground just 30 minutes before and were among the crowd of 1000 who gave Bell a standing ovation. "I was pretty nervous and I wanted to get it out of the way as soon as possible," Bell said. "It was a special moment ... it was quite hard to fight back the tears." Richardson hadn't added to his overnight score of 64 when Bell brought up the mark under gloomy, threatening skies. Bell celebrated reaching the milestone by pulling Waqar Younis through square-leg for four but Waqar then trapped him leg-before- wicket for 105 with a swinging yorker. It was his sixth first-class century of the domestic season and left him with 1092 first-class runs for the New Zealand summer. Richardson then had a lucky escape when he top edged a hook shot on 65 and it just cleared Fazle Akbar at fine leg. With Mathew Sinclair, he ground away against some accurate Pakistan bowling, particularly from Saqlain.AFP/Reuters DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS 20010326 ------------------------------------------------------------------- Cricket board snaps relations with India ------------------------------------------------------------------- Imran Naeem Ahmad ISLAMABAD, March 25: The Pakistan Cricket Board (PCB) on Sunday said it has broken all cricketing relations with India after the traditional rival pulled out of next month's Sharjah Cup where Pakistan was one of the three contestants. The chairman of the PCB, Lt. Gen Tauqir Zia added that Pakistan will not cross borders if the game's governing body allocated the International Cricket Council (ICC) knockout tournament to India. "We have had enough and we are not going to have a rethink. Our cricket relations with India are over," an angry Tauqir said when asked to comment on India's recent decision. Tauqir's stern reaction came hours after director of the PCB, Brig Munawwar Rana, said Pakistan would still play India in India if the knockout tournament was held there. "We would not like to play cricket with India any more," Tauqir said but clarified that Pakistan would still send its team to Sharjah (April 8 to 20) tournament that involves Sri Lanka as well. Tauqir slammed India for its double standards and hypocrisy. "If they can play us in field hockey why not cricket," he said referring to the hockey tournament in Dhaka where India and Pakistan contested the final. The general said, he would not chair the April 15 Asian Cricket Council (ACC) meeting in Sharjah in protest. He pointed out that the ACC should seize to exist. "I would not like to chair the meeting because I don't think the ACC can function if India continue refusing to play Pakistan. "If Asia is not together, it is just no point of having the council." DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS 20010329 ------------------------------------------------------------------- Ex-stars chide India over refusal to play Pakistan ------------------------------------------------------------------- KARACHI, March 28: Former Pakistani cricket greats said on Wednesday the future of cricket in Asia is in danger following India's stubborn refusal to play Pakistan due to political differences. Imran Khan, who launched a career in politics following his retirement from Test cricket in the early 1990s, appealed to India to save international cricket on the sub-continent. "Pakistan's sharp reaction was long overdue because of the Indian government's rigidity. Now the ball is in India's court to stop the breakup of Asian cricket," the former Test captain said. Pakistan Cricket Board (PCB) chairman Lt Gen Tauqir Zia said on Sunday that Pakistan would never play India again in response to New Delhi's refusal to send a team to a one-day tournament in Sharjah next month. In addition to the Sharjah pullout, India skipped the Sahara Cup in Toronto last year and cancelled a tour to Pakistan in December. "The Indian board earned millions through Pakistan's tour in 1999 but when it was Pakistan's turn to earn some money they refused to allow their team to come, costing us millions of dollars," Imran said. India and Pakistan are the backbone of cricket in Asia, the fastest growing region for the sport following the granting of Test status to Bangladesh in June last year. Test match attendances in both countries put the rest of the cricket world to shame, especially when they play each other. "When Pakistan and India can play in hockey, squash and other sports why can't they play cricket?" another former Pakistan captain, Zaheer Abbas, asked. Pakistan and India clashed in the final of Bangladesh's President Cup hockey last week and Pakistani players crossed the border to appear in the Asian junior squash championship last month.-AFP ------------------------------------------------------------------- You can subscribe to DWS by sending an email to <subscribe.dws@dawn.com>, with the following text in the BODY of your message: subscribe dws To unsubscribe, send an email to <unsubscribe.dws@dawn.com>, with the following in the BODY of you message: unsubscribe dws ------------------------------------------------------------------- Back to the top.
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