------------------------------------------------------------------- DAWN WIRE SERVICE ------------------------------------------------------------------- Week Ending : 15 August 1998 Issue : 04/32 -------------------------------------------------------------------

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CONTENTS

NATIONAL NEWS + Pakistan celebrates Independence Day + Pakistan not to default on repayment of loans: Pasha + Pakistan-India talks prospects dim, says envoy + Muttahida quits federal cabinet to protest killings + Senate session: Opposition plans bill on more autonomy + Jan Jamali elected leader of the house + Benazir calls for formation of national govt + 6-member body to reform agriculture department + Millat Party: Creation of egalitarian society basic objective + Transporters indefinite strike from Aug 27 --------------------------------- BUSINESS & ECONOMY + Sales tax, duties exemptions likely + Offer to cut power rates + $2.5 billion FCY deposits encashed + Trade deficit shrinks to $118m: Sharp drop in exports, imports + Pakistan Steel's performance improved + CBR faces uphill task in reviving fixed tax + Rupee sheds 60 paisa in kerb + Unpaid bills of WAPDA, KESC swell to Rs53.8bn + Exporters ask govt to take up issue with WTO + Multiple factors deter KSE from extending rally --------------------------------------- EDITORIALS & FEATURES + Feeding the fiction Ardeshir Cowasjee + Wounded at birth Irfan Husain + Should Pakistan sign the CTBT? Akhtar Ali ----------- SPORTS + Hanif declines to inspect Sahara Cup wickets + PCB in the throes of finding a captain

NATIONAL NEWS 980814 ------------------------------------------------------------------- Pakistan celebrates Independence Day ------------------------------------------------------------------- ISLAMABAD, Aug 13: The nation celebrates the 52nd Independence Day on Friday. In keeping with the significance of the day, a number of activities have been planned, beginning with the flag-hoisting ceremonies to exhibition of photographs, rallies, fireworks, scout rallies, sports events and illumination of buildings. The day in the federal capital will dawn with a 31-gun salute, and with a 21-gun salute in the provincial capitals. The faithful will pray for national unity and strength and seek the blessings of Allah Almighty. Following the change of guards ceremony at the mausoleum of Quaid- i-Azam Mohammad Ali Jinnah at Karachi a colourful and impressive ceremony of the day will be the flag-hoisting ceremony in front of the Parliament House by the prime minister. Similar ceremonies will be held at all the provincial capitals by the respective chief ministers. With the sound of siren, the vehicular traffic will come to a standstill allowing the people to join in singing the national anthem.APP DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS 980815 ------------------------------------------------------------------- Pakistan not to default on repayment of loans: Pasha ------------------------------------------------------------------- Bureau Report ISLAMABAD, Aug 14: Expressing hope that the country would not default on repayment of foreign loans, the Prime Minister's adviser on finance, Dr Hafiz Pasha, told Dawn that Pakistan was seeking three types of trade financing from the Islamic Development Bank (IDB) and the members of the Islamic Consortium to improve its balance of payments position. "The IDB board will meet on September 6 while the members of the Islamic Consortium have convened their meeting on September 9 to discuss and finalize the trade financing of about 1.5 billion dollars for Pakistan," he further stated. Talking to this correspondent here on Thursday, the prime minister's adviser on finance expressed firm hope that Pakistan would pull through a very difficult period of its history. "We will not default. We will soon succeed in getting the economy back on the track," he assured. Dr Pasha said Pakistan had sought: (1) trade financing from IDB; (2) import financing via Malaysia; and (3) a soft fund and the roll-over of some loans. He had received positive signals from IDB and other banks and financial institutions that Pakistan would get all of these, he said. To another question, he said trade financing being sought from IDB had no linkage with the IMF. "We are having independent discussions with them," he informed. Responding to a question, he said he would attend the meeting of the Islamic Consortium on Sept 9. Hafiz Pasha chaired on Thursday a meeting of the Industrial Revival Committee which looked into individual sectors to revive them. Cement, sugar besides other sectors came up for discussion in that meeting, he said. "Now the government has to decide how much capital it could pump into these industries to revive them," he said, adding that another meeting was scheduled for Sunday to finalize various issues relating to the sick industrial units. "Without their revival, it would be difficult to achieve the objective of increased production and ultimately achieving self sufficiency in every sector," he said. "We are considering to offer more incentives for enhancing our exports," he said, adding that new incentives would be given in the light of the economic revival package announced on July 31. DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS 980814 ------------------------------------------------------------------- Pakistan-India talks prospects dim, says envoy ------------------------------------------------------------------- Shaheen Sehbai WASHINGTON, Aug 13: The prospects of bilateral talks between India and Pakistan are "very very dim", Pakistan Ambassador to Washington, Riaz Khokhar said on Wednesday. Speaking at a conference jointly organised by the Indiana University of Illinois and Pakistani American Congress on the Capitol Hill, the Ambassador said every dispute between the two countries had been resolved in the past through third party mediation and Kashmir issue could not be resolved without the international community joining in. His comments were interpreted by observers as an indication of pessimism in the forthcoming talks between Pakistani and Indian prime ministers in Durban, South Africa where they will gather for the NAM summit. The two leaders will also meet at New York for the UN General Assembly session and are likely to see President Clinton as well, provided he survived the present troubles connected with the Monica Lewinsky affair. The conference was also addressed by famous writer and scholar Stanley Wolport who flew in from California and several other Pakistani and Indian scholars, including one representing the Kashmiri Hindu pundits. The conference was telecast live throughout the USA by C-Span, a public service channel paid for by all cable channel networks. C- Span normally carries live the proceedings of the US Senate and House of Representatives. Dr. Nisar Choudhry of the Pakistan American Congress organised the conference on the Hill and announced that similar conferences would be held at Islamabad and New Delhi in future as well. Mr Khokhar traced the history of Pakistan-India relations, as he was until recently the Pakistani envoy to New Delhi, and said there was lack of will in New Delhi to resolve the issue, although the foreign secretaries of the two countries had last year laid a sound basis to proceed through the working groups. Prof Stanley Wolport, who recently returned from Indian occupied Kashmir, said the Kashmiri people had no trust in the Indian army and the Indian government. He narrated the story of his visit and said from his hotel to the airport, he was stopped five times by Indian army check points. When he asked his Indian hosts why there was so much insecurity, he was told that the Indian army units did not trust each other and every unit had to make its own security checks. "When the Indian army does not trust its own fellow soldiers, how can the Kashmiri people trust the army," Prof Wolport asked, stressing that the issue had to be resolved through international involvement and pressure because it threatened the entire world. DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS 980815 ------------------------------------------------------------------- Muttahida quits federal cabinet to protest killings ------------------------------------------------------------------- Reporter KARACHI, Aug 14: The Muttahida Qaumi Movement quit the federal government on Friday in protest against on-going killings in the city. The MQM informed the visiting minister for provincial coordination, Chaudhry Nisar Ali Khan, during more than two hours of talks at the Nine Zero, that its sole member in the federal cabinet, Dr Khalid Maqbool Siddiqui, minister for industries and production, had tendered his resignation in protest against "unabated killing of MQM workers", the North Nazimabad tragedy, helplessness of the government to stop MQM workers'murder, remaining of the killers at large and PML's failure to implement agreements and assurances. The decision to quit the federal cabinet was taken by the Coordination Committee at its emergency meeting held at the Nine Zero soon after the brutal killing of 10 MQM workers on Wednesday night in North Nazimabad by" government agencies and terrorists on their pay rolls." In the light of this decision, Dr Siddiqui resigned from the cabinet on Friday and this was communicated to Chaudhry Nisar when the latter visited Nine Zero along with Chief Minister Liaquat Ali Jatoi on Friday. Dr Siddiqui, who is in London these days after an official visit to the US, informed Chaudhry Nisar by phone at the Nine Zero :" I am talking to you as a former federal minister. Please inform Prime Minister Nawaz Sharif about my decision to resign and that I will formally submit my resignation to him on returning home." Dr Siddiqui's withdrawal from the federal cabinet could be a prelude to quitting of the coalition in the province by the MQM. Sources said the MQM had given 48 hours to the government to honour its commitments, failing which it might quit the provincial government as well. DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS 980810 ------------------------------------------------------------------- Senate session: Opposition plans bill on more autonomy ------------------------------------------------------------------- By M.Ziauddin ISLAMABAD, Aug 9: All opposition parties in the senate have agreed to jointly table a private bill in the next regular session of the upper house to amend the constitution so as to enhance the quantum of provincial autonomy. As many as 52 members are said to have promised to vote for the bill, which would leave the government with only 35 to oppose the proposed amendment in a house of 87. However, the opposition still needs to muster the support of another six members to get the bill passed in the upper house. Meanwhile, informed sources said Mr Hasil Bizenjo, a BNP (rebel group) MNA from Balochistan, has been promised the federal cabinet slot of railways, recently vacated by Mr Yaqub Nasir. Sources said Bizenjo would, however, get the slot only after a new government was installed in Balochistan, perhaps as a reward for helping the Muslim League regain a foothold in the province. One of the three BNP MNAs, three of the five senators and seven of the 10 MPAs are reported to have formed a dissident group, led by Senator Sanaullah Khan Zehri and MNA Hasil Bizenjo. This leaves the leader of the party, Sardar Ataullah Khan Mengal, with two MNAs, two senators and three MPAs. The rebel group has a total of 11 parliamentarians, while the group belonging to Sardar Mengal has seven. Since it is still not very clear which of the two groups can expel the other group, the formation of a stable and strong government in Balochistan continues to appear uncertain. DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS 980814 ------------------------------------------------------------------- Jan Jamali elected leader of the house ------------------------------------------------------------------- Sabihuddin Ghausi and Saleem Shahid QUETTA, Aug 13: Mir Jan Mohammad Khan Jamali of Pakistan Muslim League was on Thursday elected the leader of the house in Balochistan Assembly and chief minister of the province. He secured 29 votes in a house of 41 members. His only rival, Prince Musa Jan of Balochistan National Party (headed by Sardar Ataullah Mengal) got only four votes. Musa had filed nomination at the last moment on Thursday. Nawab Akbar Bugti's Jamhoori Watan Party (JWP) abstained from voting. None of its seven members turned up in the afternoon session when balloting was held in the assembly. Independent member Hair Byar Marri was present in the house but did not cast his vote. Mir Jan Jamali got 11 votes of his own party (the PML), 6 votes of the breakaway BNP group, 7 votes of Jamiat Ulema-i-Islam, two votes of Pakhtunkhwa Milli Awami Party, two votes of Balochistan National Movement and the only vote of the Pakistan People's Party member. The PPP member, Bismillah Khan Kakar, was also one of the four proposers who signed Jan Jamali's nomination paper. Others who proposed Jan Jamali's name for the leader of the house were Malik Sarwar Khan Kakar of PML, Maulana Amir Zaman of JUI and Sardar Bahadur Khan Bungalzai of the BNP breakaway group. In the morning session, the Speaker of the Balochistan Assembly Mir Abdul Jabbar informed the members of the rules of the election and invited nomination papers till 1:30pm. The polling began at 3:00pm and was over by 3:40pm. Soon afterwards, the speaker announced the result and declared Mir Jan Jamali elected as the leader of the House. In his opening remarks after being declared elected, the new leader of the House said he would present his agenda in the assembly on Saturday when he would seek vote of confidence from the members. He regretted that in the previous era Balochistan's social fabric was torn apart and centuries old tribal and traditional relationships broken down. Mir Jan Jamali said he wanted to give the province a new working system that should keep functioning even after he was not there in the office of chief minister. To bring about these changes in the province, the chief minister sought assistance of his own party, the coalition partners, all the members of the Balochistan Assembly and the people of the province. The outgoing chief minister, Akhtar Mengal, offered all cooperation to the new chief minister, Jan Jamali, in the interest of the province and said the future would be the best judge of the performance of his as well as Jan Jamali's government. He said he would offer his comments after Jan Jamali spelled out his government's programme on Saturday. Abdul Rahim Mandokhel of Pakhtunkhwa Milli Awami Party (PMAP) urged the newly elected chief minister to resolve the issue of the rights of the Pakhtun and the Baloch in the province. He complained that the Pakhtun members in the PML or JUI were not given major responsibilities. He hoped that the new government would give due importance to the province-federation relationship. Maulana Amir Zaman, whose party JUI decided late on Wednesday night to support Jan Jamali, said the party decision was based on principles. He said the JUI wanted the new government to strive for restoring Islamic provisions given in the framework of the constitution. Others who spoke in the session were Bismillah Khan Kakar of PPP, Bahadur Khan Bungalzai of the BNP breakaway group, Abdul Karim Nausherwani of BNM and Jaffer Khan Mandokhel of PML. DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS 980814 ------------------------------------------------------------------- Benazir calls for formation of national govt ------------------------------------------------------------------- Correspondent MUZAFFARABAD, Aug 13: Former prime minister and Leader of the Opposition in the National Assembly Ms Benazir Bhutto said here on Thursday that it was very important for Pakistan to have a national government, made up of all major political parties and their allies in view of the current situation in the region. "This national government must adopt a national agenda," she said while speaking at a press conference. She said Mian (Nawaz Sharif) Sahib should tender his resignation for the national government because the country was more dear than him. "If he (Nawaz Sharif) can submit resignation for the sake of a former president (Ghulam Ishaque Khan) then why not this time," she said asserting that Nawaz Sharif had shattered the unity of the nation, which was created after the nuclear blasts. "He cannot unite the nation now," she asserted. Benazir Bhutto said the country was facing an internal threat more than an external threat and was in dire need of internal unity. Asked to elaborate the format of the national government, Ms Bhutto said she would state it in Pakistan and would talk about Kashmir today. Ms Bhutto said she did not believe that the present leadership of Pakistan had understanding of the dimensions of the challenges the subcontinent was facing today while replying to another question. "I don't believe that the present leadership understands the dimensions of the challenges that today face the subcontinent," she said. AJK Prime Minister Sultan Mahmood Choudhry, senior minister Ishaque Zafar, PPAK's secretary general and forests minister, Choudhry Latif Akbar, former federal minister, Syed Iftikhar Gilani, Ms Naheed Khan and some other AJK ministers were also present on the occasion. Ms Bhutto was here on a brief visit to meet the Kashmiris, displaced by Indian firing in Neelam Valley. DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS 980815 ------------------------------------------------------------------- 6-member body to reform agriculture department ------------------------------------------------------------------- Ahmad Hassan PESHAWAR, Aug 14: The NWFP chief minister, Sardar Mahtab Ahmed Khan, on Thursday formed a 6-member committee to chalk out proposals for restructuring the agriculture department. The committee to be headed by a former chief secretary Azam Khan has been asked to submit its report within two months. Speaking at a meeting on Thursday, Mahtab said, he was keen to launch a campaign to help farmers from the next Rabi season and the restructuring of the department must be completed before that time. Keeping in view the mismanagement in the department, he said the job description must be re-defined for its each official, he emphasised. The committee will comprise provincial secretaries of Finance and Planning and development departments, an ex-M.D. of fruit and vegetable board Manzar Elahi Raja, G.M.Khan, an ex-vice chancellor, Agriculture University and researcher Qazi Mohammad Hanif. The chief minister regretted that although agriculture was the mainstay of 60 to 70% of population', they do not get any support from the government agencies. The meeting was informed that three different expert committees were working in this connection and their reports are expected shortly. The steps taken for giving autonomous and self sustainable status to research, specially the seed production have shown positive results within a short span of time. Presently, the Agriculture department has a vast network including research, extension, engineering, livestock, water management, veterinary, fruits and vegetable, information and marketing which need total restructuring for improving its efficiency, the meeting was told. DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS 980815 ------------------------------------------------------------------- Millat Party: Creation of egalitarian society basic objective ------------------------------------------------------------------- Mahmood Zaman LAHORE, Aug 14: Ex-president Sardar Farooq Ahmad Khan Leghari formally launched his Millat Party at a founding convention here on Friday declaring the creation of an egalitarian society based on universal human rights and Islamic principles as its basic objective. "We are not disappointed even at this critical state of national affairs," Mr Leghari declared at the convention held at a five-star hotel, because, he said, his party believed that empowerment of the people, a genuine federal structure and a comprehensive package of micro and macro-economic policies finalized by his party would solve most of the country's socio-economic problems. Speakers at the convention, which was attended by over 2,000 invited delegates from all over the country, asserted that there was a political vacuum after major parties like the PPP and the PML had failed to perform. The people were frustrated and wanted a change but had no alternative. The speakers said they believed that the Millat Party was qualified to be the third party in the country. Mr Leghari, who will be the president of the new party, said a change was in the offing as the federation was in danger, the country was on the brink of an economic disaster and successive rulers had distorted the system to a degree that any further delay to salvage Pakistan would be fatal. "We have to bring about a basic change in the system and retrieve all the ill-gotten money from abroad, no matter if we have to publicly punish rulers and their corrupt allies," he said amidst applause from the gathering. The Millat Party at present consists mostly of PPP old guard who had gone into political isolation. Also included are some former legislators and those who were associated with the caretaker government between November 1996 and February 1997. Though participants came from all the four provinces, Azad Kashmir, FATA and Northern Areas, a big majority of them hails from the southern parts of the Punjab, Mr Leghari's own feudal and political base. Some PPP(SB) leaders who decided on Thursday to part ways with Ms Ghinwa Bhutto did not attend the convention in what was seen as a "strategic move", but are expected to join up later. Many delegates representing the minority communities were also invited to the convention. A large number of women also attended. Some of the important participants included former Punjab ministers Malik Abdul Qayyum, former legislators Riaz Husain Pirzada, Arif Zaman Qureshi, Husain Jahanian Gardezi, Tahira Khan, Malik Shah Muhammad Mohsin, Pervez Saleh, MPA Rafiq Leghari, Syed Vilayat Husain Gardezi, publisher Agha Amir Husain and the sons of Malik Meraj Khalid and Muhammad Haneef Ramay. The convention adopted the party's constitution which promises election at all tiers of the organization. A 300-member national council will be responsible for the party's constitutional affairs and a 50-member national executive council will be its policy- making body. The constitution, presented by former PPP federal minister Qayyum Nizami, envisages setting up primary units to promote membership at the lowest tier of the organization. According to the constitution, the first election at all tiers will be held in about 15 months. The party's membership drive, which was kicked off by Mr Leghari by filling the first form at the convention, will last for one year and elections will be held within three months after that. In the meantime, the party president will nominate members to various bodies. After the constitution was adopted, Sakhe Qabool Muhammad Siddiqui, Sajjada Nashin of Dargah Hazrat Sachal Sarmast in Sindh, proposed the name of Mr Farooq Leghari for the office of the president which was unanimously approved by the convention. The Millat Party leader said the time was near when everything would be demolished. The rulers had run out of time, and even the assemblies seemed to have completed their "logical" term as their members had been made deaf and dumb after the 14th amendment. The rulers had run the federation like a personal fiefs as a result of which the federal system was under major threat. DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS 980811 ------------------------------------------------------------------- Transporters indefinite strike from Aug 27 ------------------------------------------------------------------- Staff Reporter KARACHI, Aug 10: Transporters have called an indefinite wheel-jam strike from Aug 27, while criticising the indifferent attitude of the government towards issues being faced by the transport sector. Different transport bodies in separate statements issued here on Monday said that they were aware of the hardships that the people had to face owing to the strikes, but there was no other way to get the government's attention so that the problems could be solved. The transporters have also urged the owners of motor cars, scooters, motor cycles and other petrol run vehicles to join hands with them and observe the strike, as they were also the sufferers of the enhancement in petrol prices. They criticised the Sindh government's attitude and said that after the transporters in Punjab gave a strike call for Aug 8, Punjab Chief Minister Shahbaz Sharif called them for a meeting and solved their problems, but here the government remained unmoved. They also criticised the recent decision taken about handing over of the bus terminals to the NGOs. Claiming it a conspiracy against the transporters, they said no such procedure prevailed in any other city. Pointing out that the students were not being given any concession on the recently inaugurated route (4-B), they said if the facility was not extended to the students, all other buses, plying on North Naziamabad route, would also withdraw such facility. They also criticised the establishment of the Karachi Public Transport Society and alleged that it would harm the transport sector. The transporters have also offered the government that if their problems could not be solved, their buses and other vehicles be purchased by the government. The demands of the transports are: withdrawal of 25 per cent enhancement in petrol prices; immediate payment of compensation of the vehicles burnt owing to law and order situation; withdrawal of enhancement in various taxes and duties, withdrawal of enhancement in spare parts; extortion by police; etc. The Karachi Transport Federation chief, Saleem Khan Bangish, while talking to Dawn, said the provincial government had offered the transporters to revise the fares, but the transporters did not agree as they do not want that further victimise the poor people. He said that federal Commerce Minister Ishaq Dar and Prime Minister's adviser Najam-us-Saqib had called and informed them that the government would solve their problems, but the transporters refused to accept the verbal assurances and demanded that their demands be accepted first. The minister had assured him of a meeting in Karachi in a few days. He said that it was surprising that the petrol prices in the international markets were going down, while here the government was increasing the prices.

BUSINESS & ECONOMY 980813 ------------------------------------------------------------------- Sales tax, duties exemptions likely ------------------------------------------------------------------- Ihtashamul Haq ISLAMABAD, Aug 12: A number of new exemptions, related to sales tax and customs duties are currently being planned by the government to substantially increase exports, particularly with a view to counter the effects of the international sanctions against Pakistan. Official sources told Dawn here on Wednesday that the ministry of commerce has finalized a set of proposals to offer new exemptions which will certainly help achieve $10 billion exports target during 1998-99. Sources said the Minister for Commerce, Ishaq Dar had assured the prime minister that new measures would greatly facilitate the exporters to compete with the exporters of China, India and Sri Lanka. "We have tried to remove some of the anomalies which will ensure increased exports to USA, Europe and Middle East", said an official. Responding to a question he said that changes have been proposed in the Sales Tax Act to the satisfaction of the exporters and other traders. Likewise, he said that some of the custom duties will be reduced to achieve the objective of having more exports. Sources said that the government has also decided to issue a number of much awaited SROs contained in the new trade policy. The CBR, sources said, has been advised to urgently issue SROs related to sales tax. "The 50 per cent export proceeds given to the exporters have gone well and initial reports are very encouraging", said an official. Furthermore, the role of the Export Promotion Bureau (EPB) was being made effective to increase exports. Sources said that a decision has been taken that the EPB will monitor the performance of the new commercial counsellors. It will monitor and evaluate the performance of commercial counsellors and those who were not performing satisfactorily, will be recalled. These commercial counsellors were being given a special assignment to ensure more Pakistani exports by finding out new areas in their respective countries where they were serving. They were being asked to cooperate with the Pakistani exporters and in case there were complaints against them, they would be recalled immediately. It was also learnt that the ministry of commerce has decided to induct equal number of commercial counsellors from the private sector. And as a first step two MBAs from the private sector have been appointed as the new commercial counsellors in China and Spain. Another two from the ministry of commerce were being sent to Saudi Arabia and Bangladesh. "A number of commercial counsellors who will complete their tenure at the end of this year will not be given any extension and new people will be appointed in their place", said an official of the ministry of commerce. He said the ministry of commerce wanted to appoint new commercial counsellors at all the important places but it could not do so because of the recommendations of former Secretary Foreign Affairs Shayaryar Yar Khan to curtail the number of counsellors including the commercial counsellors and press counsellors. DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS 980809 ------------------------------------------------------------------- Offer to cut power rates ------------------------------------------------------------------- Faraz Hashmi ISLAMABAD, Aug 8: Habibullah Coastal, an independent power producer (IPP) having a capacity of 123mw has offered to reduce tariffs to 4.8 cent per unit, provided its gas allocation is increased to 30 years and capacity production to 75 per cent, a director of the project told Dawn. Habibullah Coastal is among the six IPPs which had been issued cancellation of letter of intent by the ministry of water and power in June this year. Habibullah Coastal is a joint venture between Habibullah family and an American Company Coastal Energy. The project was identified and sanctioned in the last government of Prime Minister Mian Nawaz Sharif. Federal Minister for Petroleum and Natural Resources Chaudhry Nisar Ali Khan who was holding the same portfolio in the previous government had approved the gas allocation for a period of 20 years for the project. In the power policy of 1994 the project along with other IPPs had been offered a tariff of 6.5 cent at a production capacity of 60 per cent. The company in its reply to the cancellation of letter of intent had denied allegation of corruption or involvement of any kick- backs in the project. "How can they level such allegations when the project was approved by them," said the source on the request of anonymity. He recalled that the project was originally conceived by WAPDA and even the site was selected by the its experts. Later on the World Bank's refusal to extend loan to WAPDA. The bank had asked the government of Pakistan to offer this project to some private investors. The project was then offered to Saeedullah Khan Piracha, who accepted it despite serious drawbacks and some technical constraints, the source said. DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS 980811 ------------------------------------------------------------------- $2.5 billion FCY deposits encashed ------------------------------------------------------------------- Mohiuddin Aazim KARACHI, Aug 10: Some $2.533 billion worth of frozen foreign currency deposits have been converted into rupees reducing the total deposits from about $11 billion on May 28 to $8.5 billion on August 8, 1998. The conversion created Rs 116.518 billion worth of rupee funds a major of chunk of which is believed to have gone out of the banking system. Senior bankers told Dawn the conversion at the rate of Rs 46 per dollar had initially put their rupee resources under severe pressure. They said the situation improved later on as the banks managed to attract the converted funds into tailor-made rupee deposit schemes. Bankers said the pace of conversion slowed after July 21 when the government withdrew the August 31 deadline earlier set for conversion of these deposits. Now people can convert their frozen FCY deposits into rupees or dollar-bonds whenever they want. That is why people are no more in hurry to convert their deposits. This is evident from the fact that during July 22-August 8, 1998 only $400 million worth of deposits have been converted into rupees against $2.1 billion converted during May 29-July 21, 1998. The July 21 economic package had it that people would continue to enjoy wealth tax exemption and exemption from disclosing the source of funds if they converted their FCY deposits into rupees. The package also promised withholding tax exemption on converted funds if redeposited with the banks. "It is because of these decisions that the holders of frozen foreign currency deposits are no more in a hurry to convert them into rupees," said treasury manager of a foreign bank. His assessment was that people had adopted a wait-and-see policy with regard to their frozen FCY deposits. "People might be anticipating a devaluation of rupee so that they could get more through the conversion of the FCY deposits," said another bank treasurer. This possibility cannot be ruled out because people converting their FCY accounts into rupees are still getting Rs 46 per dollar which is far below its prevailing composite price. The State Bank composite price of the dollar based on buying and selling prices of some 16 selected banks stood at Rs 49.95 for buying and Rs 50.32 for selling on Monday. The SBP composite exchange rate truly reflects the actual strength of the rupee because of the way it is worked out. SBP had fixed the official buying and selling price of dollar at Rs 46 and Rs 46.46 on June 27 by devaluing the rupee by 4.4 per cent. Before that the buying and selling price stood at Rs 44.05 and Rs 44.49. If the SBP composite rates that have been in place since August 1 are compared with the official exchange rate of Rs 46 for buying and Rs 46.46 for selling it shows a devaluation of 8.30 per cent. Under the dual exchange rates system currently in practice banks are free to quote their own exchange rates based upon the demand and supply situation in the market. These rates are called floating inter-bank rates and are used for buying and selling dollars in the inter-bank market including the State Bank. These rates do not apply to bank customers. They buy and sell dollars at what is called composite rate. Composite rate is the average of official exchange rate and floating rate of the bank concerned. DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS 980812 ------------------------------------------------------------------- Trade deficit shrinks to $118m: Sharp drop in exports, imports ------------------------------------------------------------------- Correspondent ISLAMABAD, Aug 11: Pakistan opened the financial year 1998-99 with a sharp reduction in exports and imports but with the silver lining that the trade deficit was restricted to $118.0 million in July 1998. In June, 1998, it had stood at $213.1 million. The Federal Bureau of Statistics this time released the monthly statement of foreign trade statistics in Pakistani rupee only because they said the State Bank of Pakistan had not provided the rupee-dollar conversion rate. On the basis of official rate of Rs46.0548 per dollar, Pakistan's mercantile exports totalled $585.75 million (Rs26.977 billion) in July, while imports amounted to about $703.84 million (Rs32.415 billion). The trade policy announced by the commerce minister envisaged exports worth $10 billion. On this basis, the exports in the first month of the year should have been $833.33 million but it is short of the same by 29.7%. On the imports side, the situation seems to be satisfactory in terms of the government policy which wants to minimize imports and thereby, the balance of payments deficit. In July, it is short of the projection of imports worth $11 billion in the whole year by 23.21%. The exports of all the major categories, namely primary commodities, the textile group and "other manufactures" depressed the exports. The former registered an astounding 32.55% drop over July 1997. The exports of primary commodities totalled $51.069 million as against $75.717 million in the corresponding month of last year. Rather unexpected is the decline in exports of rice and raw cotton. Their exports are shown to have declined by 37.98% and 97.99%, respectively over July 1997. Yet, in the latter month, their exports had increased by 41.5% and 5747%, respectively in rupees. In quantitative terms also, the export of rice plummeted by 56.2% from 86,575 tons in July 1997 to 37,860 tons last month. In July last year, Pakistan exported 5087 tons of raw cotton; last month, it dwindled to 92 tons. Nevertheless, the month under report stands out for substantial jump in the export of fruits and vegetables. Their exports totalled 24,312 tons and 13,026 tons, respectively. In July 1997, their exports stood at 25,004 tons and 316 tons, respectively. It appears, however, that the vegetables were exported at grossly reduced rates. This contrasts with fruits which fetched much higher unit price, compared to the corresponding month of last year. Textile group: In rupee terms, exports are shown to have increased by 1.96% over July last year. However, in dollar terms, their exports amounting to $406.84 million were lower by 2.9%. In quantitative terms, a sizable drop of 5.81% has been admitted in the statistics. Last month, the quantity of cotton yarn exported totalled 33,659 tons, which is 14.24% lower than the corresponding month of last year. The unit price at which it was exported also declined, as evident from the fact that in rupees, exports of cotton yarn decreased by 16.42%. The items which showed positive growth last month were knitwear, bedwear, towels, readymade garments and waste material of textile fibres. Their exports increased in quantity, respectively, by 5.14%, 39.64%, 26.31%, 56.11% and 4.89%. Exports in the category "Other Manufactures" dropped by 37.23% in rupee terms and by about 1% in dollar terms. This category's exports totalled $53.93 million as against 54.45 million in July last year. All the items in this category except carpets and chemicals showed positive growth in exports. The exports of sports goods, in rupee terms, declined by 72.15%, leather manufactures by 20.53%, surgical & medical instruments by 69.12% and cutlery by 76.32%. Only the miscellaneous group stands out for its plus performance by more than doubling its exports from $36.46 million to &73.91 million. Imports: Last month posted an impressive 21.73% drop in imports in dollar terms from $899.3 million in July 1997 to $703.83 million. Compared to June, 1998, the exports declined by 11.14%. This is attributable to a reduction in imports of Food Group from $198.09 million in July 1997 to $87.48 million last month. In this group, imports of wheat, palm oil and sugar decreased. But the import of soyabean oil increased from 8,961 tons in July last year to 11,225 tons in July 1998, raising the import bill from $5.63 million to $8.0 million. Substantial increase is also reported in import of milk & cream etc, tea and spices. In quantitative terms, their imports increased, respectively, by 61.72%,9.49% and 105.1%. Besides, the machinery group, which continues as the biggest import group, registered about 26% drop in imports from $222.62 million in July 1997 to $165.67 million last month. The imports of petroleum group declined quite substantially, from $174.70 million to $102.16 million. DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS 980812 ------------------------------------------------------------------- Pakistan Steel's performance improved ------------------------------------------------------------------- Bureau Report ISLAMABAD, Aug 11: Pakistan Steel Mills has achieved "break-even" between its current expenditures and earnings notwithstanding the past accumulative liabilities of over Rs14 billion, Director Finance Shakeel Mirza said on Tuesday. "Had this foreign exchange crisis not been there the PS would have made profits this year," Mirza said claiming that he had reversed the financial position of it through a set of corrective measures introduced in the past one year. The losses which had been recorded at Rs2.5 billion in the year 1996-97 were brought down to Rs1.67 billion in the year 1997-98, he said. The present management reduced the losses by curtailing the procurements cost by 40 per cent, reduction in personnel-related cost by 19 per cent, putting a ceiling on the overtime, cutting the transportation cost and improving the material consumption ratio. In actual terms the purchase expenditures have been reduced by over 80 per cent, if the inflation, rupees deprecation and certain other factors were also taken into account, he said. The annual purchase bill of Pakistan Steel contained over of 51,000 different items including raw materials and spares, he added. The overtime of drivers has been reduced from 39,000 hours a month to 8000 hours a month, he said. The new management reduced the ceiling of overtime from 200 hours to 40 hours, besides decreasing the medical allowance from Rs1000 a month to Rs500 a month, he said. The mills, he said, also saved a considerable amount by improving material consumption ratio. The management introduced cheap substitute materials and reduced the ratio of expensive raw materials. It had been done without compromising the quality of the products, he added. In view of the over-staffing problem being faced by the mills, he said, he introduced a scheme encouraging the employees to take premature retirement. Under the new scheme any employee can apply three-year leave on half salary before the retirement, he said. The mills had received over 1400 applications and these were being processed so that it would not lose trained manpower, he added. A new scheme to encourage savings has also been introduced under which an officer can get 50 per cent of the amount saved by him by curtailing his telephone bills and petrol quota. "If an officer has a ceiling of Rs2000 for his telephone bill and he reduces his bill by Rs1000 he can get Rs500 out of it as a reward," he said. Mirza calling for immediate expansion. Though it had the production capacity of 1.1 million tons but it only once touched the figure of 1 million tons. Regarding the past liabilities of Rs14 billion, he said, the mills was not in a position to pay back these liabilities or even service these debts. Only the interest of these loans was over Rs1.6 billion a year. He said he had prepared a three-pronged strategy including the financial restructuring or rescheduling of loans outstanding against the mills of five commercial banks. A comprehensive balancing modernization and rehabilitation programme was also included in the strategy to reverse the financial health of PS. Calling for an urgent expansion, he said, he had asked the government to provide required funds for enhancing the production capacity from 1.1 million tons to three million tons. Mirza also expressed serious reservations over the anomalies in taxes and tariffs. "The mills can earn huge amount if it is saved from anomalies in the tax and tariffs," he said. He pointed that the mills was paying Rs4 million a year on account of different taxes. He cited an specific example to corroborate his complaint about the anomalies in taxes. Central Board of Revenue deducted Rs630 million on account of excise duty, which he said was challenged by the mills in the Sindh High Court. The court gave verdict in favour of the mills but even then CBR did not repay the amount wrongfully deducted by it. He appealed to the CBR authorities to adjust this amount against the future taxes if they were not in a position to refund the amount to the mills. DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS 980813 ------------------------------------------------------------------- CBR faces uphill task in reviving fixed tax ------------------------------------------------------------------- Correspondent ISLAMABAD, Aug 12: The Central Board of Revenue is faced with a difficult job of implementing the agreement for reintroducing the Fixed Tax Scheme and Trade Enrolment Scheme, sources said. Tariq Iqbal, Member Tax Policy told Dawn on Wednesday that the issue was not as simple as it was deemed to be. "We will have to see how to evolve a mechanism to enforce a tax collection system and how to make such a mechanism fit into the law", he said. When his attention was drawn to the fact that the entire chain of GST extraction was at threat if the retailers/jewellers were taken out as special segments to deposit ST through FST/TEC, he said "this is the problem we are facing". He added "it would take longer than it is being thought to take, and it is more complicated an issue than it has been taken for, put in the backdrop of the Finance Act 1998 and the contents of the agreement. We are not running away from the agreement as it is, but it is not so simple." On the other hand, distributors of general products and merchants of a range of imported and locally-produced items have approached the CBR against the very decision to allow payment of sales tax through TECs and the FTS. The general product distributors, especially those licensed to market the products of multinationals in Pakistan and merchants of a vast range of items like paper and paper products, have begun campaigning against the impending notification on TECs/FTS. They maintain, "we are to collect sales tax at the rate of 12.5 per cent from the retailers, deposit it, along with the sales money with our producers and thus pay it up as registered ST payees. How can we pay ST if the retailer has a TEC and says he is not supposed to pay at the rate of 12.5 per cent?" said a representative of distributors from the Punjab while struggling to have an audience with the CBR officials to plead his case. The distributors explained to the CBR on Tuesday that they are supposed to be registered as ST payees, which is a condition not only inherent in the system of the tax for an operator as distributor, but also is a compulsion from the producers (multinationals) who do not issue licence for an agent distributor without the latter being a registered ST payee. However, they pleaded, if the CBR allows retailers of general products to pay ST at fixed rate, or through TECs, there would be no chance for the distributors to collect the ST which they are supposed to deposit with the return which they are bound by law to file. DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS 980814 ------------------------------------------------------------------- Rupee sheds 60 paisa in kerb ------------------------------------------------------------------- Reporter KARACHI, Aug 13: The rupee lost 60 to a US dollar in the open market on Thursday. The dollar closed at Rs 57.70 for buying and Rs 57.80 for selling against Rs 57.10 and Rs 57.20 on Wednesday. Money changers said the rupee fell because the supply of the greenback slowed with no change in the its demand. They said the supply was affected by a fresh wave of violence on Wednesday bringing business activities to a halt in parts of the city on Thursday. "The rupee fell as there was little supply of dollar against a usual high demand," said Ovais Kalia of KKI money brokerage. In the inter-bank market the rupee remained firm. Bankers said floating inter-bank rates of the dollar closed at almost at the level seen on Wednesday i.e. Rs 53.00 for buying and Rs 53.50 for selling. They said the rates had gone up to Rs 53.40 and Rs 53.80 in early trading when the State Bank invited quotations from the banks. They said the rates fell back to the previous level as SBP refrained from buying dollars from the market. SBP closing composite rates based on buying and selling rates of 16 selected banks remained almost unchanged at Rs 49.78 for buying and Rs 49.17 for selling. DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS 980815 ------------------------------------------------------------------- Unpaid bills of WAPDA, KESC swell to Rs53.8bn ------------------------------------------------------------------- Faraz Hashmi ISLAMABAD, Aug 14: Total outstanding bills of WAPDA and KESC against the federal and provincial governments and domestic and private consumers have gone up to Rs 53.8 billion, an increase of 97 per cent over the last one year, Dawn reliably learnt. The total outstanding bills of WAPDA and KESC on July 1, 1997 were at Rs 21 billion, which jumped to Rs 53.8 billion as the Muslim League government rescinded the deduction at source policy, in case of the provinces and federal government departments. Since the policy has been reversed the outstanding bills against the provinces and federal government shot up as they did not pay a penny over the last one year, said a source at the ministry of water and power. In view of the sharp increase in the recoverables of WAPDA,the government had decided to revoke the "deduction at source", in case of the provincial governments and the federal government departments. The finance ministry used to deduct the outstanding amount of the utility bills from the periodic releases to the provinces from the federal divisible polls which was called "deduction at source". The total outstanding bills of WAPDA against the provincial governments alone were of Rs 13 billion and if the amount payable against federal government was included in it then the figure increased to Rs 18.6 billion. In some cases the finance ministry has already started deduction at source but provincial governments particularly Sindh government was strongly opposing it. The provincial governments had not been accepting the amount charged to them on account of electricity bills. Therefore the government set up reconciliatory committees which sorted out the dispute and except for Sindh government all the other three government agreed on what ever charged from them. The Sindh government, which has to pay Rs 8 billion on account of electricity bill has refused to accept the amount and was not ready to get their bills deducted from their share in federal divisible poll. Federal government and its departments had to pay an amount of Rs 5.6 billion, Punjab government owed an amount of Rs 3 billion to WAPDA, NWFP Rs 1.2 billion, Balochistan Rs 0.3 billion, agriculture tubewells in Balochistan Rs 3.4 billion and FATA Rs 2 billion. An amount of Rs 14 billion was outstanding against the commercial and domestic consumers. "The rate of recovery in case of domestic consumers is 97 per cent, which seems that only domestic consumers are paying their bills regularly, said the source. DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS 980814 ------------------------------------------------------------------- Exporters ask govt to take up issue with WTO ------------------------------------------------------------------- Reporter KARACHI, Aug 13: After European Commission's (EC) refusal to to decumulate Pakistani imports of unbleached cotton fabrics (UBF) from those of other countries, the exporters have urged the government to immediately refer the issue of anti-dumping to WTO. The Commission recently imposed definitive duties on imports of unbleached cotton fabrics from Pakistan and four other Asian countries but dropped out Turkey on grounds of finding no sufficient proof of injury to European textile industry on imports of UCF from that country. The Pakistani exporters and manufacturers of UCF to European market took up the issue with EC seeking similar status for imports from Pakistan. They argued that a comparison between the situation of Turkey and Pakistan depicted that the reasons set out in favour of the decumulation of Turkey equally applied to Pakistan. While putting forward their case with EC the Pakistani exporters pointed out the imports from Pakistan to European market between 1996 and the investigation period decreased from 24,517 tons to 14,462 tons showing a drop of 41 per cent. They feel that the Commission has decumulated Turkey on similar grounds. Despite all the evidences and arguments extended by Pakistani exporters of UCF to the European market the Commission rejected their plea. However, the EC lowered the country average from 10.5 per cent to 9.5 per cent of the punitive duties to correct the earlier mistake while calculating the dumping margins. The Pakistani exporters who were initially willing to give price undertaking to EC on withdrawing definitive duties on imports of UCF have to backout fearing that the Commission may take this as an acceptance of dumping by them. In the meantime India who had also been subjected to dumping margins on imports of UCF by the Commission took a hard line and referred the case to WTO. It has officially requested consultations with the Commission at WTO level in Geneva to take place on Sept 17 to 18. If the matter is not resolved at the consultation level, India within 60 days will have to put it before Dispute Settlement Board (DSB) of WTO. India has taken up both the case of bedlinen as well as of UCF with the WTO. APTMA convener on anti-dumping committee and WTO affairs, Akber Sheikh told Dawn that we would like our government, without loss of time, to take up the matter with WTO. "All along APTMA had been fighting this legal battle with the EC but now the time has come where the government will have to act and "act fast" because APTMA in its individual capacity could not approach WTO," he added. He was highly critical of EC which had taken up this matter purely on political consideration and added that Turkey being Customs member of the European Union had been exempted from duty margins. Similarly, he said that on the request of Austria the Commission has exempted from punitive duties the fabrics used for embroidery. DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS 980814 ------------------------------------------------------------------- Multiple factors deter KSE from extending rally ------------------------------------------------------------------- Reporter KARACHI, Aug 13: Stocks on Thursday failed to extend the previous rally as a combination of negative news including killings in the city in a fresh wave of violence triggered selling from the jobbers and weakholders but larger decline was resisted, thanks to the presence of support at the dips. The opening was a bit higher, what the dealers called, an extension of the overnight run-up and a good bit of fresh covering purchases in the pivotals but late selling caused by city violence and Friday's closure on account of independence again pushed the market into the minus column. The KSE 100-share index fell 12.14 points at 964.83 as compared to 976.97 a day earlier, reflecting the weakness of some leading base shares. The market capitalization suffered a decline of Rs3 billion at Rs280.896 billion as compared to Rs283.903 billion a day earlier, owing largely to heavy selling in Hub-Power. Floor brokers said the index should have suffered a much bigger decline but heavy buying in PTCL did not allow larger fall as it holds a weightage of 33 per cent in it owing to its massive capital outlay. "What seems to have halted the market's upward trend is news originating from Washington that there might be no bail-out plan from any donor until Pakistan signs CTBT", dealers said. Press reports indicated that the current initiative of the Islamic Development Bank (IDB) to line-up Gulf money to bail-out Pakistan from the current financial crisis might stay deferred for an indefinite period apparently awaiting the American nod. Another bearish news came from the reports that major oil companies have threatened to withdraw their investment from Pakistan. "Pakistan might not be progressively inching towards a default on debt payments, the financial situation is not ideal either", some analysts said. However, larger decline was resisted thanks to the presence of strong support in the pivotal on technical grounds with PTCL being in the lead. It came in for renewed massive buying both from the local and as well as from the foreign investors and managed to finish with a modest rise of 10 paisa after at one stage trading went as high as Rs22.90 on strong early speculative buying. Hub-Power, however, received heavy battering at the higher levels and fell sharply by Rs1.25, as it failed to attract buyers at the lower levels. Among other MNCs, Engro Chemical came in for renewed selling despite an interim dividend of 25 per cent on post-tax half year profit of Rs486.277 million. But Fauji Fertiliser, another fertilizer gain reacted favourably to the news of aftertax profit of Rs1.675 billion. Major losers were led by Pak-Suzuki Motors, Engro Chemical, Glaxo- Wellcome, Shell Pakistan and Lever Brothers falling by Rs2.00 to 20.00. Prominent gainers were Fauji Fertiliser and Packages which rose by 95 paisa and Rs4.50. Among the local leading issues which came in for active selling, EFU General Insurance, Highnoon Lab, Kohat Cement and Bankers Equity were leading the fall from Re1 to Rs2.50. Trading volume rose to 131 million shares from the previous 121 million shares, while losers led gainers by a fair margin at 64 to 23, with 35 holding on to the last levels, out of 122 actives. PTCL again came in for massive buying and finished higher by 10 paisa at Rs22.10 on 88 million shares; followed by Hub-Power off Rs1.25 at 13.75 on 35 million shares; ICI Pakistan lower 25 paisa at Rs1.2.45 on 3.415 million shares; Fauji Fertiliser up 95 paisa at Rs52.15 on 0.864 million shares and FFC-Jordan Fertiliser unchanged at Rs13.55 on 0.531 million shares. Other actively traded shares were led by PSO off Rs2.60 on 0439 million shares; followed by Engro Chemical lower Rs2.85 on 0.392 million shares; Sui Southern easy 15 paisa on 0342 million shares; Unity Modaraba unchanged on 0.201 million shares; Faysal Bank off 60 paisa on 0.195 million shares; Sui Northern lower 25 paisa on 0.184 million shares; and Japan Power lower 15 paisa on 0.165 million shares.
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EDITORIALS & FEATURES 980809 ------------------------------------------------------------------- Feeding the fiction ------------------------------------------------------------------- Ardeshir Cowasjee AND now Leghari, in the run-up to the launch of his Millat party in Lahore on August 14, says to us that there should be accountability. Unbelievable, after the chance he had in November 1996 as caretaker president, when the judiciary, the army and his fellow caretakers were all willing to prop him up if he postponed the elections and, in line with the people's wishes, initiated Ehtesab rather than Intekhab. But, no, he made a deal with Nawaz Sharif, and had to protect him. Besides, he was far too frightened as to what an accountability process might throw up about his own past doings. This country cannot afford Farooq Leghari. He failed in one test, and like the other second-timers will fail again. Political beneficiary, culpable Nawaz Sharif, when he came in for his first term in 1990, similarly had no interest in accountability, in actually serving the much bandied 'national interest' by bringing to book Benazir Bhutto and her cronies. Rather, he took off on his binge, misusing his office, using his political clout to borrow beyond his means from the cooperative societies (which he and his Chaudhry pals successfully finished off), from the DFIs and the CFIs. At borrowing time, the entire vast Mian family grouped together borrowed unscrupulously. He ran his businesses on unsecured loans and by issuing at will 'Statutory Regulatory Orders', revenue SROs, to suit his schemes.. Here he is with us now, for his second round, once again using his political clout, amending the Constitution and legislating merely to suit and protect himself and his own interests. This time, he is supposedly rescheduling his loan repayments. But he is repaying nothing and has conveniently disowned responsibility for many in his defaulting family. He claims that he could have paid back had his industries been allowed to function (as they functioned during his rule with supporting SROs) during Benazir Bhutto's second round. According to the State Bank, his group owes Rs.5 billion (Rs.500 crores) to the exchequer which, though he can pay back, he maintains he cannot. At the same time, he wishes us to accept that he is not the country's Number One defaulter. His recent manoeuvre, Ittefaq's repayment agreement, drafted by the defaulters themselves which he had approved by the eight creditor banks, is but a charade. The banks were ordered to sign, and he has been sanctified in his own court of law. Did he not foresee that other defaulters would claim the same privilege? For instance, Abid and Asif Saigol, sponsors of the Mohib Textile Mills, have claimed in an advertisement published in The Nation on July 12, that their "company has been incorrectly placed on the list of wilful defaulters," and that they "have voluntarily submitted themselves to the Lahore High Court ..... and are fully committed to adjust their liabilities from sale of assets, along the lines of the example set by the prime minister and his family." They will also, hopefully, find friendly sanctifiers and adjustors of their default. Other grand defaulters will emulate the fine example set, and we will be left high and dry. Whilst all this has been happening, Benazir Bhutto, husband Asif Zardari, and their mixed bag of cronies have been hooked. This is one of the very few achievements of this government. All that remains is for the line to be drawn in. If this is not done before the present lot fall, they will never be forgiven for not completing the job. Saifur Rahman has worked hard. He has traced the alleged stolen money, traced the alleged theft to its source, and driven Benazir Bhutto to the point of contradicting herself. She accuses the Swiss and British judicial systems of being as inept and corrupt as is ours, and gullible to boot. The foreign media is being of great help particularly the BBC in interviews that we see here. She is in the big league, with the Shah of Shahs, the Marcoses and Mobutus, the Bokassas, the Suhartos, who even though out in the cold, or dead, with all proven against them, never admitted that they robbed their countries. On to the lesser beings. PML secretary-general Sartaj Aziz was finance minister in both Nawaz governments, in this one up to two days ago. Before exiting and handing over his portfolio, having already told us that we are in a mess and that difficult times lie ahead, he wrote his swan song, 'Why foreign currency accounts were frozen' (printed in this newspaper on August 5). He has attempted to justify the gross wrongs to which he was a party. He would have done better to go silently. The foreign currency account facility was there in 1991. So, he should have understood two fundamental requirements. First, a government's contractual obligation is sacrosanct. Its word must be its bond. Second, if a government keeps breaking its own contracts, what credibility can it retain, what trust can the people have in it? Sartaj Aziz was finance minister in 1991 and remained in that position until 1993. What did he do to ensure that the government would not renege on its obligation? In fact, he was party to a massive squandering of public money both then and now, e.g., a billion dollar each on yellow cabs and motorway. He left the treasury bankrupt in 1993, and again, now. When the first Nawaz Sharif government finally fell in July of that year, reserves were down to 100 million dollars. This time we are in default. Apart from large debts in local currency, we owe $ 42 billion to foreign institutions. By his own account his government squandered two billion dollars of the increase in foreign currency deposits in less than 18 months, in addition to a similar amount of incremental short-term borrowing. Sartaj Aziz claimed a shortfall in exports when the world economy was booming. Should this not be put down to poor policies and mismanagement? During both governments he allowed the effective exchange rate to appreciate, penalizing exporters. As economic czar, what did he do to clean up the financial system and privatize the banks? The only bank privatized during the first round was the Muslim Commercial Bank which went to a crony. This time around a defaulter has been made chairman of the Privatization Commission and not one large financial organization has been privatized. Loan recovery remains paralyzed. Defaulting leaders cannot force their defaulting flock, or any others, to pay up. Budget management has been abominable. Each time, the deficit has increased and none of the agreements reached with the IMF was ever completed. The fact that a major part of the deposits belonged to residents does not give the government the licence to confiscate them. Many middle class people had to take refuge in dollars because the government's inflationary policies were continually eroding the value of their rupee savings. Hafiz Pasha is a likeable young man who tends to the needs of two wives and manages two households. He has taken on a job which primarily requires of him to change the mindset of Mian Mohammad Nawaz Sharif. Does he think he can do that? As the PM&FM's adviser, he is de facto finance minister. Should he not open up and tell us what the 'basket' he has taken on contains so that we may better understand his impending swan song? The present ruling lot have no creditibility. Lenders will only come for a credible government capable of fulfilling its promises. Should any lenders now come,for their own good reasons, they will squeeze us dry. Potential lenders have already seen how incapable Nawaz Sharif is of even having the economy documented. His constituents go on strike for just not having their names entered on the taxman's lists and what does Nawaz Sharif do? He gives in. If we are to survive, the next man in must, repeat must, be a good clean man who has never sat as a member in any of our 'august' assemblies or in the even more 'august' Senate. He will have to do as the Ukranians have just done. To quote from an AFP report of August 5, "Kiev: The Ukranian authorities locked 500 local and regional leaders, as well as 1,700 business leaders, in a conference centre and told them that they would stay there until they start paying off their tax debts. The government has laid on food, water and telephones for its 'prisoners.' They had been invited by the government to discuss Ukraine's financial problems." Our Parliament House is large enough to contain all our loan defaulters, tax evaders and plain robbers. For good measure, Rafiq Tarar can also be invited to the party. DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS 980815 ------------------------------------------------------------------- Wounded at birth ------------------------------------------------------------------- Irfan Husain INDEPENDENCE DAY gives hacks and editorial writers yet another opportunity to do some more soul-searching and breast-beating about the dismal state of the nation. Rest assured that I won't let this opportunity slip by without recording my personal angst. To my mind, the wonder of the age is electronic mail: suddenly, we are all connected through an inexpensive and quick medium. I had not grasped the extent of this network until my e-mail address started appearing with my column in the splendid Internet edition of this newspaper. I now find myself flooded with mail from overseas readers who have overwhelmed me with their passionate concerns and criticism of what is happening in Pakistan and to Pakistanis. I try and respond to as many as possible, and apologize to those whose letters I have not yet answered. The burden of the refrain from readers abroad is how callously and shamelessly our leaders, present and past, have ripped off this unfortunate nation. Although there is almost universal condemnation of the policies being followed by Nawaz Sharif, his rival Benazir Bhutto has almost no supporters either. Basically, the message I am getting is "a plague on both their houses." The freezing of foreign exchange accounts has come in for particularly heavy electronic flak. Many of the letters are from Indian readers; indeed, I was pleasantly surprised to learn how many Indians read the Internet edition of Dawn. Many of them have said they were impressed and amazed that I was allowed to express the kind of views that I do. Disconcertingly, several expatriate Pakistanis have communicated their concern for my safety! But one recent letter in particular started me thinking. Basically, the writer said that given the multitude and magnitude of the self-created problems Pakistan faces, it seemed fair to ask whether Partition was in fact justified. Fifty-one years after Pakistan came into being, I think we are mature enough to take stock of where we are, and prepare a balance sheet of the positive and negative aspects of independent statehood. It is a fact that the areas constituting Pakistan today were the most backward provinces of undivided India, and seen in this context, the development of the physical infrastructure has been impressive. Electricity, roads and telephones now reach the remotest parts of the land, and thousands of factories have been erected where none existed before. Our signal failing has been in the social sector. Malign neglect by successive governments has ensured that Pakistan is near the bottom of world rankings for health and education. An illiterate and disease-prone workforce has kept productivity low, and this has had a direct bearing on our inability to compete effectively in the global market. But our biggest failing lies in the crisis of leadership: short- sighted, selfish leaders and power-hungry demagogues have ensured that our most fundamental problems stay unresolved. Issues like the national language, the degree of provincial autonomy and local government still keep getting raised after half a century of independent existence. We have been unable to arrive at a consensus on the most basic issues. It would appear that we have created a state without creating a nation. This failure to forge a national identity or a shared vision has resulted in the groping for direction that is so evident in every aspect of our public life. Indeed, the fifty years that have passed since Mr Jinnah's death have witnessed the bitter struggle between the rational, secular outlook advocated by the founder of the nation, and the obscurantist, backward vision so militantly pushed by his erstwhile enemies. It would appear that the latter view has triumphed, but given what this conflict has cost us, it has been a pyrrhic victory. All these conflicting ideas and ideals have served to distract the country's leadership from the main task of governing. At the best of times, Pakistan is a fractious, deeply divided country that is very difficult to rule, but when the rulers are forever bickering over obscure issues, governance becomes that much more difficult to provide. Another problem inherent in newly created states like Pakistan is that psychologically, people aren't sure how long such countries will last, so they develop a grab-it-while-you-can mentality. This is evident in the greedy, grabby approach our ruling elites have adopted whether they are in politics, business or administration. Carpetbaggers enter politics to make money and protect their narrow interests, and not from any altruistic motive. Given these base impulses, it should surprise nobody when these shady characters go berserk when they achieve power. One problem directly connected to our independence is the huge expense we incur on defence, and the corresponding neglect the social sector has suffered. India's implacable hostility since the Kashmir conflict has fuelled our deep-seated insecurity and made us spend far more on our armed services than we could afford. The result of this confrontation is before us in the shambles our economy is in today. Of course, mismanagement has played a major role in producing this scenario, but had it not been for our perceived need to maintain our defences at current levels, we could have saved literally thousands of billions of rupees over the years. Our mutual animosity saw its ultimate expression in the recent nuclear tests both countries carried out. Both are paying a high price, but sanctions are hurting us far more because of the fragility of our economy. Fifty years after independence, we are wondering how we are going to avoid default. The breakdown in the authority of the state is another byproduct of the confusion and conflict that fester in the republic. Law and order have broken down completely, and sectarian and ethnic gangs carry out their crackpot agendas at will, killing and maiming their rivals as well as the innocent without fear of punishment. Demoralized and untrained policemen are no match for the well-armed and motivated thugs who control the streets. So who has gained most from Partition? The feudals, certainly. They have managed to keep their extended holdings, mostly awarded by the British for good behaviour, whereas their Indian counterparts lost their estates through a succession of land reforms. Many business families have thrived for lack of competition, and fortunes have been made by lodging false property claims after the exchange of populations in 1947. But the average Pakistani remains poor, illiterate and without the basic amenities. For him, like his Indian cousin, Partition has brought little relief. How then to answer my reader who triggered this chain of thought through his letter? The best I can do is to suggest that we look at the question through the prism of our own experience. But whatever our perspective, I don't think there can be any doubt that to varying degrees, both India and Pakistan were wounded at birth in 1947. DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS 980810 ------------------------------------------------------------------- Should Pakistan sign the CTBT? ------------------------------------------------------------------- By Akhtar Ali HAVING congratulated ourselves enough for the nuclear explosions of May, it is time to realistically evaluate and appreciate our prospects and predicament. Firstly, there is a notion that Pakistan has become a nuclear power, while it has at best become a nuclear weapon state and that too at a very initiate stage. Pakistan certainly lacks the collateral for being awarded the dubious distinction of a nuclear power. There are scores of countries in the world which, if they decide to acquire nuclear weapons, would be able to do so in a matter of few years. Most of the European countries, Japan, a number of South-East Asian and Latin American countries are in this category. Quite a few among these consider nuclear weapons to be endangering security rather than bolstering it, and thus have renounced their nuclear ambition. Hence a more balanced evaluation of our having acquired some prestige and nuisance value would be in order. For a country that has been losing vitality and going down on most counts, nuclear testing could be morale boosting. However, it should not lead to a jingoism of the kind some extremist political parties have been displaying on the streets lately. We are passing through great and critical times when momentous decisions have to be taken. In May, the crucial decision and action of nuclear explosions was taken. Now in a rather short spell of time, we have to decide whether we take on the world powers and incur their wrath or sign the Comprehensive Test Ban Treaty (CTBT) as a minimum to assuage the concerns of the big powers. Here we will examine the CTBT briefly and the pros and cons of Pakistan signing or abstaining from it. We will also examine Pakistan’s strategic and nuclear options, the case of installing a confidence-building regime and finally recommend a strategy for Pakistan. One nuclear imperative is a continued need for testing and it is never enough. Fortunately, this is not the mainstream view. At the other end is Israel which has not deemed it essential to resort to nuclear tests, possibly because data on validated designs was available to it. With continued advancement of mathematical modelling, testing and experimentation even for design validation and others would go increasingly out of fashion. One hopes that ultimately Pakistan would have the necessary hardware and software to conduct such modelling if and when required, obviating the need for frequent nuclear testing. Continued nuclear testing is not required to build and maintain a credible nuclear deterrent for Pakistan vis-a-vis India. In fact, six explosions are more than enough. A nuclear force with 20-50 warheads is well within the reach of a technological system that can make six explosions in a series. For the next 7-10 years such a nuclear deterrent, whether overt or covert, is going to work. Further testing would only earn political enmity and condemnation worldwide and bring in little technological advancement of practical value. Shunning the testing option which is what CTBT is about does not seriously compromise Pakistan’s security in a significant way. The suggestion of a unilateral accession to CTBT by Ms Benazir Bhutto should not be taken lightly. It borrows Pakistan a breathing time, away from back-breaking economic sanctions which may ultimately break national cohesion and social stability. In September 1998, a conference would be called to review the accession status and decide the future course of action with respect to non-accession. In that sense, technically all signatures made before that date are conditional, tied to accession by all other parties. In practice, however, it is highly likely that the treaty would go into force “provisionally” on the appointed date with a few states being out of it. The treaty involves a two-stage accession process: signature by the executive and ratification by the state. There is a provision for withdrawal if extraordinary circumstances compel a state to do so. The withdrawing state would be required to state precise reasons which may have dictated its withdrawal. The treaty, however, is for perpetuity, unlike NPT (nuclear non- proliferation treaty) which was initially negotiated for twenty years and was extended into perpetuity through a review conference in 1990. A comprehensive test ban organization has been already put in place. It would install and operate a global monitoring system based on four different technologies, virtually obviating a chance of missing a significant explosion and would be able to sufficiently discriminate between earthquake and nuclear explosion. There is some misunderstanding in the media and among general public that CTBT would freeze all our nuclear activities and that all of the nuclear facilities, including ones at Kahuta, would have to be open for international inspection. Nothing is further from the truth. The following features of the treaty should be noted: a) CTBT forbids only nuclear explosions and testing; all other nuclear research and activities, including nuclear power, fissile material production and even making of nuclear weapons, are outside the purview of the treaty and are by definition permissible. b) The monitoring and verification (M&V) under the treaty is for area monitoring detecting nuclear explosions. No inspection of nuclear facilities is involved. Testing/explosion sites may be physically inspected on the basis of remote monitoring evidence. The remote sensing technologies are specified. Essentially, in all those technologies wide sensors would be installed which would be linked to regional and global monitoring devices and computers. Any earth movement or shock of more than a kilo ton would be detectable. Actual drilling at the suspected site may be done under the treaty, to detect nuclear tests or explosion, should monitoring system throw some doubtful evidence or suspicion on a state’s activity. c) There is safeguard against frivolous and intrusive verification activities. There is provision for respect of confidentiality regarding activities and processes which fall beyond the purview of the treaty which is nuclear explosion/testing specific. One may wonder then as to why such a big fuss is being made over CTBT by the US and others. In fact, many opponents of this treaty have termed it very mild and even useless. It had been negotiated over the past two decades or more for preventing the modernization and development of even more dangerous nuclear weapons. The key word is ‘development.’ It does not forbid making of nuclear weapons of any size, design, etc. It had been primarily negotiated to control quantitative arms race among the nuclear weapons countries. Recently the merit of the treaty for threshold nuclear weapon states and small nuclear powers such as India, Pakistan, Israel, North Korea, and possibly other future nuclear contenders, has been discovered. Nuclear testing or explosion is a characteristic milestone in nuclear weapon development activities, separating a covert developmental stage from an overt and active one. Thus it puts a bar on the new entrants into the list of declared nuclear weapon countries, which stand to be seven or eight if one includes Israel. To press my point further, I would add that despite a global CTBT regime, it is quite possible that another 10 countries may develop and pursue a covert nuclear weapons programme. The treaty would not be stand in the way of such countries. Thus it can be safely concluded that if Pakistan signs CTBT, it would have to forgo only nuclear testing/explosion. All its other nuclear activities could continue, including making of nuclear weapons or missile and their deployment. Apart from putting a break on nuclear weapons modernization and upgradation, CTBT is meant to be as the first global instrument as a minimum to engage the world on reduction and possibly elimination of nuclear weapons. Its significance is primarily moral and political. The objective is to unify the world system on a platform on a minimum platform of nuclear restraint. The idealists had hoped earlier that India which opposed NPT on the grounds of its being discriminatory would join CTBT, especially because up to early nineties, was at the forefront of CTBT. The treaty is offering a face-saving device to P-5 and G-8 countries, who consider the nuclear explosions in South Asia a clear defiance of international public opinion and a blow to their nuclear reduction policies. Keeping in view Pakistan’s precarious economic situation, CTBT is not such a big price to pay. Pakistan could make a beginning by signing the treaty. Israel has signed it and announced that its ratification would be dependent on the policies and actions of its neighbours vis-a-vis CTBT. The issue of ratification can be handled over the next one year. The choice of unilateral accession or insistence on Indian accession could be a subject of negotiation. With every passing day, the reward for signing CTBT may be coming down. In a possible uncontrollable socio-economic turmoil, immediate ratification of CTBT may be demanded without awarding any significant concessions. It is in our national interest to sign CTBT as soon as possible.

SPORTS 980812 ------------------------------------------------------------------- Hanif declines to inspect Sahara Cup wickets ------------------------------------------------------------------- Reporter KARACHI, Aug 11: Former captain Hanif Mohammad has turned down the proposal of visiting Toronto, Canada, to inspect and submit a report on the wickets on which the forthcoming Sahara Cup between Pakistan and India would be played. Hanif, who is widely acknowledged as the best judge of wickets, was approached by a selector on behalf of the Pakistan Cricket Board (PCB). The selection committee wanted to inquire about the strips before finalizing the 14-man squad. "There have been different wickets in the last two editions of the (best-of-five) series. In the 1996 event (won 3-2 by Pakistan), the wickets were more conducive for the spinners while last year (won by India 4-1), they favoured more to the seamers. We don't know how they would behave this time and that's why we requested PCB to fly someone to Canada to give a first-hand information," sources stated. However, Hanif rejected the idea saying that the proposal was not a practical one. "There is still one month left before the event begins. Naturally, the weather will change owing to which the surface will also change. Then I also don't know the quality of the equipment which the organisers have to protect the wickets. Besides, the soil and the roller used on the wickets are unknown. `It would be too big a risk to predict about the strips at this stage," Hanif said on Tuesday. DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS 980813 ------------------------------------------------------------------- PCB in the throes of finding a captain ------------------------------------------------------------------- Samiul Hasan KARACHI, Aug 12: The top officials of the Pakistan Cricket Board (PCB) are desperately trying to reach a consensus on the captaincy issue but all their efforts have gone in vain. According to reliable sources, the chairman of the PCB, and majority of the councillors, are supporting Aamir Sohail but they are strongly opposed by chief executive. Sources said preliminary discussions on the captain were held in order to avert the crisis in Sunday's executive council meeting which at this stage looks inevitable. Informed sources claimed that Majid Khan has categorically rejected Aamir Sohail's name and in fact has put his weight behind Mohammad Wasim and Rashid Latif. However, the two names have been rejected by some of the councillors who suggest that either Salim Malik or Wasim Akram be installed as captain. But because of the match-fixing and betting tag attached with their names, they too have been set aside. Sohail was the vice-captain on the recent tour of Africa and led Pakistan to victory at Durban when Rashid Latif was injured. In 1996, he skippered Pakistan to victory over Sri Lanka in the triangular series in Singapore but lost immediately in Sharjah. Majid's opposition to Aamir Sohail is quite understandable as the latter misbehaved with the chief executive earlier last year. After a disciplinary hearing, Sohail was banned for one months. But things changed when Mahmood took over. He lobbied for Sohail and succeeded in making him the vice-captain though he was initially favoured to win the captain's job. While there appears strong support in the council for Sohail, another interesting idea has been floated by a couple of councillors who want Javed Miandad to be appointed player, captain and coach. It is to be seen if the suggestion would impress the other members of the council as Miandad retired after the 1996 World Cup and since then has played just one game for KCCA in the National One-day Championship semi-final against Allied Bank. Miandad's last first-class game was against Zimbabwe in the 1993-94 season. While there is difference of opinions on captain, consensus has reached on coach as sources said Javed Miandad is being unanimously supported by Khalid Mahmood and Majid Khan. According to sources, the PCB has agreed to Miandad's terms and conditions. "Money is irrelevant if we get the best man who at the moment appears to be Javed Miandad," sources close to Khalid Mahmood said. As far as Mohsin Hasan Khan is concerned, he is expected to be made incharge of Pakistan A and Under-19 teams. Pakistan A is scheduled to participate in the Commonwealth Games in Malaysia, World Super Eight competition in Australia (in October) besides touring New Zealand (in November) and hosting England A in February-March next year. The Under-19 assignments include home series against South Africa Under-19 in January next year. Back to the top.

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