DAWN WIRE SERVICE
Week Ending : 17 January 1998 Issue : 04/03
Contents | National News | Business & Economy | Editorials & Features | Sports
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Massacre in Lahore leaves 22 dead
Govt offices, 30 vehicles set ablaze in Lahore
Warrant for Altaf's arrest withdrawn
US looking into Bhuttos assets
Mirage deal: the 'missing link'
US-based firm submits report on PIA fleet
Pakistan, India & BD resolve to end mistrust
Nawaz, Gujral fail to break ice
BUSINESS & ECONOMY
$1.15 billion investment in oil sector
Inflation remains in double digits
Major industrial products output falls
Export of two lakh tons more sugar to be allowed
KSE index falls on heavy liquidation in Hub-power, PTCL
Growth rate projection scaled down to 5.5pc
EDITORIALS & FEATURES
The Rai Wind Ardeshir Cowasjee
A stint to remember Irfan Husain
Focus on good governance Sultan Ahmed
Zahid helps PIA beat ABL, avoid relegation
Saqlain creates world record
Massacre in Lahore leaves 22 dead
LAHORE, Jan 11: Twenty-two people were killed and over 50 injured
when three gunmen showered with bullets a Majlis-i-Aza in a Shia
graveyard in the heart of Lahore on Sunday.
As many as 17 people were killed on the spot and five succumbed to
their wounds at the hospitals. Ten of the injured have been
reported to be in a critical condition.
Immediately after the massacre, the police sources blamed the
incident on the terrorists who had escaped from the Dera Ghazi Khan
prison a few days ago. The families of the victims accused the
Sipah-i-Sahaba and the Laskhar-i-Jhangvi of the attack.
This was the first incident of mass killing in the Punjab in 1998.
It was also the first such incident this Ramazan. As many as 26
people, including the Sipah-i-Sahaba chief Ziaur Rahman Farooqi,
were killed in the Lahore Sessions Court bombing last Ramazan.
Sources said Majlis and Qurankhwani were held every holiday at the
graveyard. The practice has been going on for several years and the
gathering is always guarded by the police. However, it was alleged
by the residents of the area that no policeman had turned up at the
scene on Sunday.
Eyewitnesses said at about 8:45am while children were distributing
copies of the Holy Quran among the participants — about 150 in
number — two men in shalwar qameez slowly made their way towards
the gathering. Meanwhile, a third man took up position near the
gate. He was, reportedly, the first one to open fire, hitting a
flower vendor, Mohammad Siddique.
The other gunmen, too, fired at the Majlis participants, hitting
several people in the head and chest. The assailants reloaded their
automatic rifles and continued firing into the congregation for
Some of the people took cover behind the pillars and epitaphs.
Those trying to run out of the graveyard were shot down by the
gunman near the gate.
After about eight minutes of firing the first shot, the
assailantsran out to a red jeep (FDF-2276) parked across the road.
The jeep sped away towards Qila Gujjar Singh main market.
Within 30 minutes of the incident, this reporter had reached the
scene. The police had not yet arrived and the people were removing
the injured to the hospitals in whatever vehicle was available.
Youths had seized a commuter wagon in which they were carrying some
of the injured and several bodies to Mayo Hospital. Several of the
injured were taken to the hospital in rickshaws.
The bullet-riddled body of a beggar, who was sitting on the stairs
leading to the entrance of Mominpura, was stretched on a grave.
Several of the epitaphs were shattered.
POLICE: Witnesses said continuous firing had attracted the
attention of the residents of the area who started gathering on the
road. They said a police mobile from Qila Gujjar Singh Mujahid
squad was parked near Lahore Hotel. On seeing the gunmen board the
jeep, the policemen took a challenging posture. But when the
terrorists shoved their guns out of the jeep's windows the
policemen immediately took cover behind their van. The gunmen did
not open fire at the police party and fled towards Gowalmandi
through Fleming Road.
Instead of chasing the criminals or helping with the rescue work,
the police party concentrated on blocking the way to the site of
the tragic incident, according to an eyewitness account.
The residents of the area, however, rushed to the scene to help
remove the dead and injured to the hospital. The injured were taken
to Mayo, Ganga Ram and Services Hospitals.
The relatives of the victims gathered at the scene within a short
time. But the police arrived there after about one-and-a-half hour.
MEDICAL ASSISTANCE: Emergency was declared at all city hospitals
and senior doctors were directed to report immediately.
Some 60 people, including 10 children, were brought to Mayo
Hospital. As many as 17 of them were received dead. A boy succumbed
to his wounds at the hospital.
About four people were admitted to the Services Hospital. Two of
them succumbed to their injuries. One person died at the Ganga Ram
Hospital and one at the Lahore General Hospital.
At Mayo Hospital's emergency ward, doctors treated over 30 injured
people. Ten children were admitted. Dozens of people donated blood.
According to hospital sources, more blood was donated than was
FATALITIES: The dead have been identified as Syed Mohammad Kazim
Rizvi, Mohammad Karim, Sarfraz Miraj, Mohammad Raza, Bahadar
Ramzan, Zahid Husain, Syed Azad Husain, Nasir Mehdi, Ali Raza,
Akbar Ali Shamsi, Javed Akhter, Inayat Fatima, Haji Fida Husain,
Siddique Shanan, Karim Baba Afghani, Haider Ali Sheikh, Nadir Ali,
five-year-old Mohammad Ali, Kulzam Husain Shah, Muntazir Mehdi,
Irfan Sadiq and four-year-old Amir Husain.
PUBLIC REACTION: Senior police officers had to face emotionally
charged youths who abused the police and the government for not
making adequate security arrangements. The Punjab IGP Jehanzeb
Burki was at first denied access to the scene. But later, on the
intervention of some Shia elders, and escorted by over a dozen
police commandos, he went only as far as the graveyard entrance.
While he was leaving the scene, people started chanting slogans
against the police. They also demanded his resignation.
Talking to Dawn, the graveyard-keeper, Farzand, said Qurankhwani
and Majlis were held every Sunday and the area police were aware of
the routine. On all previous occasions, he said, two policemen were
sent for guard duty.
He said the Qurankhwani was about to start for the ninth death
anniversary of Ustad Mohammad Husain Rizwan, when the assailants
struck. He said the assailants were aged about 20-25 years and of
medium build. One of them had a beard.
Warrant for Altaf's arrest withdrawn
By Nasir Malick
LONDON, Jan 14: The Pakistan government has withdrawn warrants for
the arrest of Muttahida Qaumi Movement chief Altaf Hussain and his
close aide, Nusrat Nadeem, which were issued in connection with the
murder of two American citizens in Karachi, it was learnt here.
The non-bailable arrest warrants were issued in 1995 after the
police recorded the statement of Arif Tootoo in the case.
The US government had announced a reward of two million dollars for
the arrest of the murderers of its citizens.
A spokesman for the Muttahida Qaumi Movement confirmed the
withdrawal of arrest warrants which, he said, had been issued as
part of a victimisation campaign against MQM leaders.
NO-GO AREAS: Meanwhile MQM chief Altaf Hussain has told Interior
Minister Chaudhry Shujaat Hussain that free and fair local bodies
elections cannot be held in Karachi unless the government clears
all 'no-go' areas by flushing out terrorists and rehabilitates
1,200 families of MQM workers which were forced to leave these
"It is the responsibility of the government to get these'no-go'
areas cleared before holding local bodies elections so that all
political parties are able to participate in the polls freely," the
MQM chief told the minister during a meeting in London on
The meeting was held at MQM's international secretariat which the
A spokesman for the MQM said Mr Hussain regretted that the
government had announced the holding of local bodies elections when
many areas in Karachi were under the control of terrorists and out
of bound for MQM leaders.
He said his party was in favour of holding of local bodies
elections but after getting these'no-go' areas eliminated so that
MQM workers could freely contest the polls from those places.
The spokesman said Mr Hussain had assured the minister that his
party would fully cooperate with the government in creating a
peaceful atmosphere for holding local bodies elections if the'no-
go' areas were cleared first. He also demanded immediate
rehabilitation of 1,200 families of MQM workers which were forced
to leave the areas by terrorists.
The spokesman said Mr Hussain had told the minister that the MQM
had never created hurdles for other political parties in Karachi
and Hyderabad in any election. To establish his claim, Mr Hussain,
cited several seats won by Pakistan People's Party and Pakistan
Muslim League candidates from these two cities.
US looking into Bhuttos assets
WASHINGTON, Jan 10: The justice department is looking into the
Bhutto family's assets and accounts in the US, as requested by
Pakistan government, informed sources told Dawn on Friday.
Officially, however, the state department had no reaction to the
two-page splash-out in Friday's New York Times.
When asked to comment, an official said: "Yes, it is a big story."
When Ambassador Riaz Khokhar was asked at his news conference
whether Islamabad had approached the US government through his
embassy, he said it was not involved in the matter.
"I know that some contact has been made but they would have done it
directly with the US embassy in Islamabad, not through us."
Mirage deal: the 'missing link'
By Our Staff Correspondent
WASHINGTON, Jan 10: A senior Pakistan diplomat confirmed here on
Friday what could turn out to be the crucial missing links in
Benazir Bhutto's Mirage aircraft scandal, revealed by the New York
Times in its 5,000-word special report on Friday.
The NYT had documented and authenticated, for the first time,
persistent reports in the Pakistan media that kickbacks were
involved in the Mirage purchase deal. But the NYT report did not
touch on the US dimension of the whole affair.
The US dimension was connected with the purchase of the F-16
aircraft and unless the F-16 chapter was finally closed in the US,
Islamabad could not explore any other option, specially not of the
To ensure that this chapter was closed, the Benazir Bhutto
government coined the catchy phrase of "our planes or the money
back" — a business slogan used extensively in the US to push sales.
The purpose was to provide the US administration an easy outlet to
get out of the commitment to sell the planes and thereby open the
doors for Islamabad to purchase jets from other countries.
The diplomat, number two man in the embassy, Zamir Akram, who was
the right hand man of Benazir Bhutto's ambassador to the US,
Maleeha Lodhi, was asked on Friday to confirm when was this catchy
phrase of "money back" introduced as a policy option for Pakistan.
The question was posed to him, on the record, after ambassador Riaz
Khokhar had finished his news conference at the embassy and granted
permission to this correspondent to ask the question from his
Mr Akram confirmed in his answer that the first time he heard the
"money back" phrase was during the speech of President Farooq
Leghari to the US, almost five months after Ms Lodhi had been
posted in Washington.
He also confirmed that in the original draft of the Brown
Amendment, the return of F-16 aircraft was included as part of the
text. Another crucial point he agreed to was that before he arrived
in Washington, Ms Lodhi used to meet US officials alone, without
the presence of any diplomat who could record the minutes of those
Mr Akram insisted that his answer should be reproduced completely,
so that it was not taken out of context.
According to him: "We were approached by Sen Hank Brown and he said
I want to change or amend the Pressler Amendment. His original
draft amendment, included everything, including the planes and
everything. That was in the Senate foreign relations committee.
"When it came for vote for the first time, the committee approved
the non-weapons part. There were two parts: Return of all the
equipment and economic assistance etc. It was a step in the
direction of amending Pressler. This amendment stayed in the
committee until August/September when the administration itself
decided that it would support it. During this period the Benazir
Bhutto visit to Washington had taken place and President Clinton
had committed that it was unfair to keep the planes and the money.
"The phrase of money back had been introduced for the first time by
President Leghari when he came here, five months after Maleeha had
assumed charge as ambassador.
"Then the administration told us that from the original text of the
Brown Amendment, they could release only the non-F-16 equipment but
if you put F-16s in it, there will be too much opposition and we
don't think it will pass. This was the administration's point of
view which was conveyed to Mr Hank Brown and he conveyed it to us.
"Both Mr Brown and the embassy contested with the administration
that if there was support it would be for the entire package, but
they did not agree. Whether it was a deliberate act or not is
something for the administration (to explain).
"What I am trying to underscore to you is, that as far as my
reading goes the decision not to include the planes in the package
was taken by the administration."
When Mr Akram was asked whether at any time he got the sense that
the ambassador or anyone else was working on a specific agenda, he
said: "I did not get the sense that she was working on her agenda."
But then Mr Akram confirmed something very extraordinary, which was
not denied by the ambassador or three other diplomats present at
the news conference. He agreed with a journalist that Ambassador
Lodhi used to visit the state department and other officials of the
US administration alone, without taking any diplomat along to
record the minutes.
"That may be so, but before I had arrived. After I was here. I
always accompanied her or if I was not available someone else from
the embassy did," Mr Akram said.
His statement corroborated statements made by at least four well-
known Pakistani-Americans in the US about the role of the Bhutto
Government, through her ambassador, in pressing the US
administration for returning the money to Pakistan instead of the
These four persons — a Chicago businessman, New York investment
banker Mansoor Ijaz, PPP leader in US Dr Bhatti and former
journalist Tariq Zaheen — had recorded interviews with Dawn in 1995
and 1996 in which they claimed that Ms Lodhi had been pressing them
to use their influence to urge the Clinton administration to return
the money to Pakistan.
A similar report by the correspondent of another Pakistani
newspaper in Islamabad, published in April of 1997, was never
denied by any of these gentlemen.
US-based firm submits report on PIA fleet
By Habib Khan Ghori
KARACHI, Jan 11: PIA's consultancy firm Simat, Helliesen and
Eichner (SH&E) of the US last week submitted its report on the
airline's fleet replacement plan.
However, as the in-house evaluation committee, set up in the last
meeting of PIA's Board of Directors with Syed Yawar Ali at its
head, has yet to prepare its report, the contents of the
recommendations of the consultancy firm is being kept top secret.
The SH&E, which has been paid around $80,000, was associated for
preparing the plan as to ensure transparency and obtain independent
expert input in the fleet replacement programme.
The foreign consultants were appointed in the last week of November
last. Its terms of reference were to provide a review of the
current situation, re-structuring proposals, validation of recovery
strategy, identification and analysis of risks, the sources stated.
They added that the firm would provide a fleet plan based on a
combination of top-down and bottom-up methodologies taking into
account the need to consider commonality, route profitability, and
PIA has the largest number of employees per aircraft if compared
with other airlines of the same size, route and fleet.
An international survey report of 1995-96 indicated that there are
seven airlines of the same profile. The PIA has over 22,000
employees with a fleet of 46 aircraft which comes to some 460
employees per aircraft whereas Turkish airways with 46 aircraft has
only 140 employees.
The PIA fleet currently consists of eight Boeing 747-200s, nine
Airbus A-300s, two Boeing 707s, six Boeing 737-300s, 13 Fokker F-
27s, two Twin Otters and six Airbus A310-300s.
Other airlines falling in the same category are Argentina with 44
fleet and 160 employees per aircraft, Olympic airways with 51
aeroplanes and 150 employees each, Singapore Airlines with 39
aircraft and 220 employees each, and Philippine airlines with 34
aeroplanes and 290 employees per aircraft.
The previous government had also invited foreign consultants to
examine the whole affairs of the airlines in the perspective to
make it a profitable organization.
The new management also finds current PIA's operating performance
unsatisfactory and considers actual staffing levels exceed the
authorized human resources budget, the service and overall
desirability ranks near the bottom.
Although, it is yet to be decided whether the new aircraft will be
of the Boeing or the Airbus family. But keeping in view the seating
capacity, the most likely choice will be Boeing 747-400 or Airbus A
340-300 having 450 and 325 seats capacity respectively.
Whatever the choice may be, the aviation authorities said the new
aircraft however will be of two class configuration i.e. Business
and Economy class as PIA has decided to do away with the first
class with the induction of the new fleet.
Prime Minister Nawaz Sharif had expressed the desire, when he last
visited the PIA headquarters in September, that PIA should include
the first aircraft in its new fleet by Dec 31, 1998. But as the
technical studies were not yet finalised, the new date for
induction had been advanced to March 23, 1999. The sources,
however, said even this date was not likely to materialised because
the aircraft manufacturer company takes between 18 to 24 months in
assembling an aircraft. As PIA has not yet decided on the make of
the family, it is not possible to get a new aeroplane inducted by
In the first phase the aging aircraft, 35 out of a total of 46
fleet, will have to be replaced to be followed by phasing out
Fokker F-27 aircraft, numbering 13. And keeping them airworthy is
costing heavily due to spare parts and scheduled unreliability.
Three options are under consideration for replacement of the fleet.
1. PIA opts for Boeing 744 which is 400 seaters but this cannot be
utilised on all routes, including London, America or even on Jedda
routes, except for a few days. Therefore, its purchase does not
2. Boeing-777 is 300 seater aircraft, which can be utilised on
3. A-3B4 Airbus as MD-11, McDonald Douglas has merged itself with
the Boeing and hence out of the ways.
If the government decides to go for the Boeing family, the PIA and
government are keen to make use of its blocked funds paid against
buying F-16 aircraft for the air force. An amount of 700 million US
dollars has remained blocked for many years owing to the US
Congress embargo on supply of the aircraft to Pakistan.
Besides the frozen money, PIA has an ambitious plan to spend one
billion dollars to buy new aircraft, including A-340 Airbus which
is being manufactured by the European Consortium.
The process will be initiated with the replacement of some six
Boeing 744s within next three years as they have become very costly
in keeping them airworthy being in use for more than 20 years.
The Malaysian and Singapore airlines do not use aircraft more than
seven years old. In the last PPP government a deal was worked out
to purchase Boeing 747-300s from Singapore Airline but this
programme was later dropped as the prime minister is more keen to
keep in view the pace of technology and benefit from new
Pakistan, India & BD resolve to end mistrust
By Akhtar Payami and Hasan Saeed
DHAKA, Jan 15: The three-nation business summit opened here on
Thursday with a firm resolve by the prime ministers of Pakistan,
Bangladesh and India to create a climate of understanding among the
three countries and end mistrust and antagonism.
The leaders of three major SAARC countries in their speeches
visualised a meaningful role for the region through sincere efforts
and concrete measures.
Prime Minister Nawaz Sharif called on South Asian leaders to take
collective measures to protect the region from the current economic
turmoil in East Asia.
He said the three countries must find ways to face up to the crisis
through increased economic cooperation and closer links in the
government and business level.
Indian Prime Minister Inder Kumar Gujral offered to increase the
frequency of train services to Pakistan to make travel easy within
the region and promote contact between the two peoples while Prime
Minister Sheikh Hasina emphasised closer government-private sector
interaction to strengthen economic ties between Bangladesh, India
The three-nation summit also adopted a declaration calling for
ensuring peace and security within the South Asian region for rapid
The Pakistan and Indian prime ministers also paid tributes to the
vision and sagacity of Bangladesh Prime Minister Sheikh Hasina for
organizing the summit in Dhaka.
The summit was also addressed by the leaders of business
delegations from the three countries who identified the bottlenecks
that impeded the growth of harmonious trade and business relations
between Pakistan, Bangladesh and India.
The prime ministers and the business leaders described the summit
as historic against the backdrop of globalization of trade and
industry and the recent horrifying economic crisis in some major
south east Asian countries. They highlighted the economic
potentials of the region which can be of great help in eradicating
poverty, hunger and disease from these developing countries.
Contentious issues which often dampen the process of understanding
in non-political areas were neither discussed nor raised. The
government and business leaders in this deliberations stressed the
importance of evolving a common agenda for the well- being of about
a billion people of the region.
NAWAZ SHARIF:Prime Minister Nawaz Sharif said Pakistan was
committed to the ideal of a friendly and cooperative south Asia
engaged in mutually beneficial economic activities.
He said his country was a signatory to the South Asian Preferential
Trade Agreement (SAPTA) and was committed to the establishment of
south Asian free trade area which is expected to liberalize trade
and open up new vistas for economic and commercial cooperation
within the region.
He said the process of liberalization should, however, move in a
manner that the interests of all member states were safeguarded and
called for reduction and elimination of tariffs to be accompanied
by parallel efforts to do away with non-tariff barriers that impede
and distort trade.
Mr Sharif said that in a move to further promote economic
development through regional cooperation Pakistan plans to hold a
regional economic summit this year. The summit is expected to
highlight that vast potentials of the region.
He said the recent events in Pakistan strengthened democracy and
ensured political stability in the country.
He said his government was removing redtapism and bottlenecks so
that trade and industry was liberated from the shackles and
policies were based on liberalizations, deregulation, privatization
and administrative restructuring.
Mr Sharif said new economic packages had been announced and his
government attached top priority to direct investment and was,
therefore, determined to create an investment-friendly regime which
is both transparent and secure.
He invited Bangladeshi entrepreneurs to take a look at the vast
potentials of investment and joint ventures in Pakistan and
participate in the emerging opportunities in the country.
He, however, said that South Asia must rid itself of the underlying
causes of tension and mistrust and build a secure and peaceful
environment conducive to peace, progress and prosperity.
To make the summit results successful, Nawaz Sharif proposed that
the summit undertakes a study of a market potential for increasing
and economic basis, adopt measures to promote greater exchange of
officials and traders and simplify and liberalize visa procedures
Nawaz also called for mutual consultation among the businessmen and
governments of the three countries to address and resolve issues
related to tariff and non-tariff barriers, quantitative restriction
and subsidy to exports and other sectors of national economies and
harmonization of diversified trade and investment policies of the
Suggesting that the trading practices and policies of the regional
countries should be transparent, Mr Sharif called for establishment
of an effective mechanism to ensure speedy settlement of commercial
disputes and improvement in the communication and transport system
to accelerate trade growth.
Referring to the economic turmoil that hit the economies of some
Asian countries, the Pakistan premier said the business summit
should consider the possibility of "evolving a meaningful strategy
which can serve as a bulwark against such sudden and unforeseen
threats to our economic development."
GUJRAL: Indian Prime Minister Inder Kumar Gujral speaking at the
business summit offered to increase the frequency of train services
to Pakistan to make travel easy within the region and promote
contact between the two peoples. He said the frequency of Samjhauta
Express could be increased to six a week from current twice a week.
"India is prepared to double the number of freight trains from
India to Pakistan from 15 a month to one every day", Mr Gujral
"This would not only promote greater contact between our peoples,
but would also signal our resolve to move forward in practical
ways", he said.
Speaking after Mr Gujral, Prime Minister Nawaz Sharif said his
government was ready to run at least three trains a day from
Pakistan to India.
The day-long conference, opened by Bangladesh Prime Minister Sheikh
Hasina, focussed on private investment in the region of more than 1
billion people, one fifth of the world's population.
But the region's share in the world trade is only 1 per cent and
the intra-regional trade is deplorably low at 3 per cent.
The three countries have received only 1 per cent of the $300
billion total global foreign direct investment.
Hostilities and mistrust have slowed down economic cooperation
among the three nations that were one country until 1947 when
British rulers partitioned the subcontinent into India and
Bangladesh that belonged to Pakistan gained independence in 1971
following a bloody war.
"Our meeting today will mark the beginning of a new period of
mutual trust and confidence among us", Hasina told the delegates.
But there were signs of differences in the opening remarks of
Gujral and Sharif.
Gujral asked Pakistan to implement tariff cuts on its commodities
to achieve the goal of free trade area in South Asia by 2001.
"I ask them (Pakistan) to trade with India in line with their
international commitments and obligations", the Indian leader said.
In reply Mr Sharif said: "The process of liberalization should move
in a manner that the interests of all member states are
Smaller nations fear that liberalization will most benefit India.
SHEIKH HASINA: Prime Minister Sheikh Hasina speaking on the
occasion emphasised the need for closer government-private sector
interaction to strengthen economic ties between Bangladesh, India
"We have to create confidence to attract foreign direct investment
and intensify the economic interaction among ourselves. The would
requires forging an effective partnership between government and
the private sector," she added.
She said each of the three countries may be doing this already, but
it is essential that the three South Asian economies come together
to chalk out a plan of action in this respect.
Sheikh Hasina presided at the opening session of the one-day
She hoped that the summit would mark the beginning of a new period
of mutual trust and confidence among the three South Asian
countries located at the crossroad between West-Central Asia and
"Let us be inspired by a vision of a South Asian community, a
community where fear and suspicion are replaced by a sense of
wellbeing, a community free of poverty where each of our citizens
can lead a life of dignity, free from hunger and illiteracy."
Sheikh Hasina said the two visionary men — Indian Prime Minister
I.K. Gujral and Pakistan Prime Minister Nawaz Sharif — have shown a
sense of determination to put India-Pakistan relations on a better
Peaceful coexistence between India and Pakistan is of great
importance in ensuring peace, stability and economic development in
South Asia, she said adding that Bangladesh, Pakistan and India
shared a common history and a common heritage.
Sheikh Hasina suggested that the close interaction among the
countries would enhance mutual understanding of the view points and
challenges faced by each country, as the region tries to integrate
in a number of different sectors.
She said the three countries constitute the largest single
concentration of poverty in the world, but they can overcome the
poverty and bring prosperity to the region by forging strong
economic links among themselves.
"We must work together to realise our full potentials. Our enormous
market, our untapped natural resources and above all, our vast
human resources can convert our region into one of the most
prosperous regions in the world," she observed.
The prime minister said the first ever business summit must send a
clear and powerful signal to the rest of the world that the
countries in South Asia are providing excellent investment
opportunities for foreign investors.
Besides, they are collectively committed to creating a congenial
environment for business and work closely with each other in
putting the required infrastructure in place to facilitate business
Nawaz, Gujral fail to break ice
DHAKA, Jan 15: Talks between Pakistan and India on major
contentious issues remained inconclusive on Thursday as the prime
ministers of the two countries during their meeting could not fix a
date for any formal meeting between the representatives of the two
The talks between the two leaders began in the afternoon and
continued till after the Iftar with a recess. The first round ended
Pakistan Foreign Secretary Shamshad Ahmad said the two countries
discussed ways and means of reviving the dialogue which remained
deadlocked for the last several months. He did not elaborate what
were the ways and means discussed and whether there was any
consensus on the methodology of resolving the dispute.
Mr Ahmad pointed out that the talks were not progressing only
because India had changed its mind and backtracked on the agreed
mechanism for the dialogue. India did not honour its commitment, he
This was for the fourth time since Nawaz Sharif assumed office that
the disputed issues were discussed.
During the meeting with Mr Gujral, when Nawaz Sharif raised the
question of continued aggression in occupied Kashmir and repeated
violations of the Line of Control, the Indian leader reiterated his
country's known position and said it was a part of India.
Mr Ahmad did not express pessimism but pointed out that there was
no breakthrough at the talks. He hoped that further talks would be
held on the issues.
NAWAZ MEETS HASINA: Prime Minister Sheikh Hasina met Prime Minister
Nawaz Sharif at his hotel suite on Thursday afternoon and discussed
with him matters of mutual interest.
Mr Sharif thanked Sheikh Hasina for hosting the first ever tri-
nation business summit and said the decisions taken at the summit
should be implemented.
He said the exchange of ideas and cooperation between the private
sectors of the three countries would bring about sustainable
improvement in their economies.
Sheikh Hasina said the summit would help a lot in bringing about
improvements in the condition of the people of the three South
The prime minister said she would direct concerned ministries to
help implement the decisions of the business summit.
She said the business community should not only look into their own
interests, but also the interests of the common people as a whole
to improve their living condition.
"We must do something for the people of the region so that they can
have a better life," she said adding, "we must induce our business
community to do so."
Sheikh Hasina referred to the recently held local body elections in
the country, which generated much enthusiasm among the rural
people, particularly the womenfolk who directly took part in the
Foreign Minister Abdus Samad Azad was present during the meeting.
BUSINESS & ECONOMY
$1.15 billion investment in oil sector
Ahmad Hasan Alvi
ISLAMABAD, Jan 10 : The Ministry of Petroleum and Natural Resources
has so far obtained an investment commitment of 1.15 billion
dollars in the upstream and downstream petroleum sectors since the
start of this fiscal year in July 1997.
This fiscal year has been termed as "Oil and Gas Year" and efforts
are being made to attract larger investment in the petroleum supply
and infrastructure sector in course of the year.
This was disclosed by Federal Minister for Petroleum and Natural
Resources, Ch. Nisar Ali Khan here on Saturday during the meeting
of the chief executives of organizations under the administrative
control of the Ministry.
The minister constituted an emergent Task Force to review the gas
supply position to areas with low pressure and asked them to bring
about improvement in gas supply within one week.
He directed both the companies to ensure regular gas supply
especially during the month of Ramazan. He also appreciated the
completion of PARCO's 360 km pipeline extension from Mahmoodkot to
Machekat via Faisalabad at a cost of Rs 5 billion.
It will greatly facilitate the transportation of petroleum products
in the major consumption areas of the country through a safer,
secure and environmental friendly mode of transportation.
After signing of EPC Contract work has started on the construction
of PARCO pipeline which would be completed in the year 2000 with an
investment of US$ 886 million.
Prime Minister Nawaz Sharif is expected to shortly inaugurate the
pipeline extension project and the commencement of the construction
phase of the PARCO refinery. Ch. Nisar Ali Khan also reviewed
improvement in the management of Saindak Project and directed that
project should be brought on the regular production by middle of
He appreciated that the Chinese companies had started work on
management contract and there was a good progress toward raising
the working capital.
The PMDC is making every effort to improve its profitability. It
has just concluded a contract to export rock salt to India. Also
for the first time they have received orders from Bangladesh and
Middle East and are negotiating contracts with them.
Taking another initiative, PMDC has started marketing "free flow
iodized salt" in one kilogramme packets under the brand name of
"Lahori Salt". It would soon be available throughout the country.
The Minister appreciated efforts by PMDC management.
The minister also reviewed the preparation for Oil and Gas Summit
which is scheduled to be held on February 17-18, 1998 and may be
inaugurated by the Prime Minister.
This is expected to be attended by a large number of foreign
petroleum experts in view of the new petroleum policy announced in
October, 1997 and restoration of previously withheld incentives.
This summit and its deliberations would add further impetus to
investment in petroleum infrastructure and supply.
Inflation remains in double digits
ISLAMABAD, Jan 12: Rate of inflation remained in the double digits
during December 1997 in terms of all the three measures, i.e
Sensitive Price Index (SPI), Consumer Price Index (CPI) and
Wholesale Price Index, which showed an increase, respectively, of
11.85%, 11.37% and 11.21% for the running twelve months i.e.
January-December, 1997, over the corresponding twelve months of
This is indicated by the monthly release here on Monday of the
Federal Bureau of Statistics. Nevertheless, it signifies slight
deceleration in view of the an increase of 11.67%, 12.24% and
11.90% in SPI and WPI during November 1997 over the corresponding
period of 1996.
When compared with November 1997, SPI, CPI and WPI, went up by
0.08%, 0.11% and 0.30% respectively during December 1997, according
Considered from the perspective of price behaviour over the period,
October-December, 1998, SPI, CPI and WPI for the running quarter
showed an increase of 1.38%, 1.56% and 1.14% respectively, over the
previous quarter July-September, 1997. When compared with the
quarter October-December, 1996, these moved up by 8.60%, 8.81% and
CPI: The highest increase in CPI has been reported in respect of
house rent, as compared to December 1996. It rose by 9.69% during
the month under review. This was followed by recreation,
entertainment & education. Revealing peculiar attitude of the
policy makers which do not consider education an essential item and
bunch it with recreation and entertainment, the figures conceals
the fact that the educational materials including writing materials
are becoming ever dearer.
That CPI for food, beverages & tobacco registered lower increase
(9.03%) over December, 1996, only shows that the government does
endeavour to keep their prices low out of political considerations,
while it perceives no such pressure in respect of continuous upward
movement of prices of educational materials.
CPI for other groups increased as follows: Apparel, textile &
footwear - 4.46%; fuel & lighting - 9.09%; household, furniture &
equipment etc. - 9.19%; transport & communication - 6.07: cleaning,
laundry & personal appearance - 0.83%; and medicines - 4.20%.
The main items which showed an increase in their prices during
December, 1997 over November, 1997 included: Food, beverages &
tobacco: Cucumber (19.87%)j, chiloghoza (19.31%), malta (17.73%),
pomegranate (15.87%), garlic (15.46%), chicken (15.38%), onions
(14.56%), tea (12.85%), eggs (7.89%), fish (5.37%), Dalda cooking
oil (5.11%), dates (4.17%), gram whole (3.45%), pakwan cooking oil
(3.38%), pulse masoor washed (2.97%), desi ghee (2.93%), pulse
moong washed (2.33%), coffee (2.25%), coconut (1.58%), wheat flour
(1.25%), sweetmeat (1.23%), cuminseed white (1.22%), bread plain
(1.20%), and wheat (1.17%).
Household, furniture & equipment etc: Quilt (1.57%) and dinner set
Recreation, entertainment & education: Urdu book 1st year/inter
(3.76%), chemistry book 1st year/inter (2.37%), cinema ticket
charges on A/C (2.12%), Maths. book 1st year/inter (1.95%), physics
book 1st year/inter (1.94%), pencil (1.93%), tape recorder (1.24%)
and dry cell (1.23%).
The main items which showed a decrease in their prices during
December, 1997 over November, 1997 are as under:
Food, beverages & tobbacco: Carrot (49.36%); peas (35.43%), turnip
(32.65%), potatoes (31.60%), radish (25.31%), spinach (15.28%),
ginger (8.27%), sugar (7.70%), bajra (6.72%), gur (4.43%),
cauliflower (3.69%), guavas (3.38%), rice irri (2.46%), and lassi
Index of kitchen items: The price index of 21 kitchen items
including wheat, wheat flour, pulses, rice, beef, mutton, chicken,
sugar, milkfresh, cooking oil, vegetable ghee, onions, potatoes,
tomatoes, red chilies and tea, etc. stood 217.42 for the month of
December, 1997. It showed a decrease of 0.44% over the previous
month mainly due to decline in the prices of potatoes, sugar and
rice irri. When compared with the corresponding month of 1996, the
index increased by 6.68%.
WPI for food group during December increased by 9.38% over the
corresponding of 1996. In respect of WPI for other groups was as
follows: raw materials - 8.21%; fuel, lighting and lubricants -
6.34%, manufactures (1.13%).
However, WPI for building materials shows a decrease of 2.45% over
the corresponding period 1996. Among manufactures, WPI for
cosmetics, blended yarn and drugs & medicines dropped by 21.1%,
1.71% and 1.45%, respectively.
The manufactures in respect of which WPI showed upward trend were:
leather (6.66%), nylon yarn (2.64%), readymade garments (2.58%),
and chemicals (1.17%).
WPI for following raw materials also increased during December 1997
over December 1996: tobacco (6.60%), groundnut seed (4.87%), cotton
seed (2.39%), mustard seed (2.07%) and skins (1.59%).
Major industrial products output falls
ISLAMABAD, Jan 16: Most of the major groups of industrial products
registered negative growth during the first five months of 1997-98,
according to official statistics now available here.
These groups include cotton cloth, some construction materials,
some chemical industrials, fertilizer, motor vehicles, bicycles,
The items of which the production increased during the period July-
November, 1997, over the corresponding period of last year, were
sugar (36.72%), cigarettes (5.94%), cotton yarn (4.56%), jute goods
(46.78%), paper (33.48%), cement (0.64%), motor tyres (0.30%) and
Significantly, the statistics do not indicate any definite trend
towards incremental, month-to-month, improvement in the
If anything, as the year progressed the quantities seem to have
tapered down, significantly in the case of categories that posted
positive growth during the period. For example, the number of
cigarettes produced in November was the lowest at 3,679 millions,
as compared to 3,870 million produced in July and 4,266 million in
Similarly, the highest production recorded by cotton yarn
(130,194,000 kg.) was in July. The month of November, however,
stands out as the period during which it dipped to the lowest
Tractors are the only exception to this pattern. The reason
probably was the government's assurance given to local assemblers
last September that no import of tractors would be resorted to
provided they met the local demand up to 30,000 units per year.
Consequently, the tractor production picked up from 771 units in
September and peaked at 1228 in November.
The number of tractors produced/assembled during the 5-month period
The statistics show 10.49% decline in output of cars, compared to
July-November, 1996, and 38.44% in turn out of jeeps. This means
that the long persistent ban on import of used/reconditioned cars
has not delivered the desired benefit in the form of increase in
output of the indigenous assembly industry.
What should particularly worry the government is substantial drop
in the output of commercial vehicles—both from the point of
commercial viability of the string of motorways planned by it as
well as overall economy.
During the 5-month period, only 167 buses were produced/assembled,
down from 187 produced during July-November, 1996. The production
of trucks (825) is exactly half the figure for corresponding period
of last year.
Likewise, the output of light commercial vehicles dwindled from
4,850 last year to 4,409 this year. That the output of most of
these categories dipped in November may indicate that the industry
was stuck with stocks produced in preceding months.
In the steel group, the production was down by 11.20 per cent from
299,624 million tons last year to 259,986 million tons this year.
The only items which showed positive growth during the period were
cast/rolled billet and galvanized products the output of which
increased by 6.19% and 78.09%, respectively.
Some of the major industrial chemicals also showed downward trend.
Among these, the output of soda ash decreased by 5.76% and of
caustic soda by 5.29%. The chip board, an important construction
material, went down by 43.59% from 8,724 tons during July-November,
In the construction material categories, glass sheet production
also registered a decrease of 7.79%. This may be the result of
liberal import of glass sheet from abroad.
The statistics indicate a persistently stagnant situation in
production of cement which inched up by a mere 0.64%.
During the 5-month period, the local industry produced 4076
thousand tons. The sluggish growth may be a manifestation of
stalemate in the overall economy.
Last but not the least, the fertilizer group also recorded a
negative growth of 2.63% in its production. That the indigenous
production of nitrogenous fertilizer declined from 1,645 billion
tons to 1,608 billion tons is because a number of factories have
remained closed eversince privatization.
The output of phosphatic fertilizer, which dropped by 10.09%, is
attributed to high price differential between the two major types
The statistics further show that there has been no production of
ammonium sulphate this year, although during the corresponding
period of last year 38,494 tons of it was produced.
Especially intriguing is the drop in output of motorcycles and
The output of motorcycles decreased by more than a quarter from
52,422 produced last year.
As regards bicycles, their production declined by 1.95% from
187,888 last year to 184,219 this year.
Export of two lakh tons more sugar to be allowed
By Ihtashamul Haque
ISLAMABAD, Jan 16: The government would soon allow the export of
additional 200,000 tons of sugar to further improve its balance of
Officials sources told Dawn here on Friday that a decision, in
principle, has been taken by the Ministry of Commerce to allow the
export of additional 200,000 tons of surplus sugar as has been
demanded by the local exporters. Earlier, the government had
allowed the export of 300,000 tons of sugar.
The exporters had sought permission for the export of 600,000 tons
of sugar which was not accepted by the Ministry of Commerce saying
that it did not want to have a slightest doubt about the shortage
of the commodity later at any stage. However, sources said that the
Ministry may eventually allow the export of overall 600,000 tons of
surplus sugar. But the permission for the export of 200,000 tons of
sugar will certainly be granted in early February. At the same
time, the officials said that they also wanted to ensure price
stability in the market.
Normally, the officials said, the production estimates of the
Pakistan Sugar Manufacturing Association have always been correct
and that it would be allowed to go for the export of 600,000 tons
of sugar during the current financial sugar.
Market sources said that rapid export orders for sugar are being
received to earn substantial amount of foreign exchange during the
current financial year.
Additional Secretary Ministry of Commerce Suliman Khan told Dawn
that when the Economic Coordination Committee of the cabinet (ECC)
allowed the export of 300,000 tons of sugar, the exporters have
successfully started booking orders for different countries.
He, however, made it clear that the Ministry of Commerce has
nothing to do with the signing of any agreement with any foreign
party to export surplus sugar. "Our job is to facilitate the
exporters and not to directly involve in any export deal", he
Specifically, he said that the Ministry of Commerce has not signed
any agreement to allow the export of 50,000 tons of sugar to India.
"Any exporter may have received any order for exporting sugar to
India but that does not concern us at all", he said clarifying that
there was no need even to get any clearance from the ministry to
export sugar to any country including India.
Suliman Khan said that the job of his ministry was to ensure that
certain quota of sugar export was distributed among the members of
the Pakistan Sugar manufactures Association. "And that job has been
done adequately and fairly", the Additional Secretary asserted.
Responding to a question, Khan said that there has been an
incredible sugar production this year that made the job of
exporting surplus sugar very easy.
Last year Pakistan did not have good sugarcane crop and its
shortage forced the government to import 50,000 tons of sugar from
Now the situation in India is said to be bad about the sugar crop
due to which it was importing sugar from different places. The
importers of East Punjab of India were reportedly in contact with
the exporters of Punjab in Pakistan to import surplus sugar to
remove the expected shortage of the commodity there (India).
KSE index falls on heavy liquidation in Hub-power, PTCL
By Our Staff Reporter
KARACHI, Jan 14: Selective support re-emerged strong on the blue
chip counters but fresh heavy liquidation in Hub-Power and PTCL
kept the underlying sentiment unsettled. The KSE index fell by
about 15 points, wiping out over Rs 3 billion from the market
But there were buyers in both the scrips at the dips, which
indicated that all was not bad with the broader market and the
negative impact of "inspired selling," said a broker.
However, the market has demonstrated in more than one ways that it
has chosen to follow the trend on the Wall Street as was evident
from the last two massive sell-offs, which pulled down the KSE 100-
share index by 171 and 157 points in one and two sessions during
the last two months despite the fact that it has no direct linkage
or relevance, which now has assumed the role of a trend-setter for
the world stock markets, he added.
"Wall stock markets now could rise and fall with the Wall Street
after the Asian currency crisis," some other dealers said.
However, the activity was insipid as is evident from the total
changes. Only 104 out of 781 listed shares came in for trading, out
of which 45 rose, 40 fell with 19 holding on to the last levels.
The low trading interest and thin attendance was attributed to
early morning rain which caused delay in arrivals of the KSE
personnel and members and agents in the rings.
Strong selective buying did re-emerge at the falling prices, mostly
in pivotals such as Hub-Power and PTCL, and both finished reacted
on quick profit-taking by some of the leading bargain-hunters.
"The broader market appears lifeless as investors are not inclined
to go beyond half a dozen current favourites," analysts said.
"The situation is fraught with high risks," leading brokers are
sending signals to their clients."Think twice before making fresh
commitments even on the blue chip counters," they added.
The KSE 100-shares index lost 14.62 points at 1,517.36 as compared
to 1,531.98 a day earlier, which means wiping out of Rs 3.334
billion from the market capitalization.
Although the undertone was highly shaky, some of the blue chips
came in for active support and did not allow the market to fall
below the pre-determined levels.
The interesting feature was that right shares of ICP SEMF, Security
Bank and Gatron Industries came in for active support and ended
higher by Rs 155 and Rs 10 each.
Most of the leading shares, notably PSO, Pak Elektron, Engro
Chemical, Fauji Fertilizer and Parke-Davis, came in for active
support and finished with gains ranging from one rupee to Rs 10.
Shell Pakistan, which led the list of advancing issues in the
falling market, came in for selling and ended lower by Rs 15 at Rs
280, followed by Dawood Hercules and Lever Brothers, which also
suffered fall ranging from Rs 5 to Rs 25, and so did Dewan Salman,
Packages and UDL Industries.
Trading volume rose to 37 million shares from the previous 34
million shares, bulk of which, over 30 million shares, went to the
credit of Hub-Power at 15.165 million and 15 million shares
respectively. Both were marked down by 25 and 80 paisa.
Other actives were led by ICI Pakistan, 5 paisa on 3.992 million
shares, followed by Japan Power, off 95 paisa on 1.182 million
shares, and FFC-Jordan Fertilizer, up 10 paisa on 0.360 million
shares, Engro Chemicals, up Rs 1.40 on 0.210 million shares, Dhan
Fibre, unchanged on 0.155 million shares, and Adamjee Insurance,
also unchanged on 0.152 million shares.
DEFAULTING COMPANIES: Trading in this sector remained insipid as
only Premier Modaraba came in for trading but ended lower by five
paisa without any deal.
Growth rate projection scaled down to 5.5pc
ISLAMABAD, Jan 14: Finance Minister Sartaj Aziz said on Wednesday
the first six months of the current financial year witnessed mixed
trends in the economy. The growth rate was now being projected to
grow at a rate of 5.5 per cent instead of the budgeted target of
six per cent for 1997-98, he said.
"The trends in the agriculture and industrial sector so far
indicate that GDP would grow in the range of 5.5 to 6 per cent,
inflation rate would be in single digit, budgetary deficit would be
met, monetary expansion shall be in accordance with the credit plan
and balance of payments improvements may even exceed the target",
the finance minister said.
Speaking at a news conference, he conceded that the target of a six
per cent GDP growth rate might not be achieved. "But hopefully it
would range from 5.2 per cent to 5.5 per cent as has been agreed
with the International Monetary Fund (IMF)". .
The finance minister forecast an improvement in the agriculture and
industrial sectors. He was also hopeful of a decrease in budget
He also accepted failure in achieving revenue targets during the
first six months (July-December) and improving the health of public
sector corporations, particularly WAPDA.
He said there had been an improvement of over 1.6 billion dollars
in external current accounts deficit. It had declined to 618
million dollars from 2.1 billion dollars during the corresponding
period last year.
He said the trade deficit in July-December 1997 was 1.1 billion
dollars, as against 1.7 billion dollars over the same period last
year - an improvement of 54 per cent.
Foreign exchange reserves had increased from 722 million dollars in
Nov 1996 to 1.2 billion dollars on Jan 8 this year.
Remittances totalled 795 million dollars during the first six
months of the current fiscal. The figure for the corresponding
period last year was 500 million dollars - an increase of 59 per
Foreign currency accounts of residents increased from 223 million
dollars to 795 million dollars.
The rate of inflation, the finance minister said, had fallen to 8.1
per cent from 13 per cent for the last several years.
The Consumer Price Index recorded an increase of 2.7 per cent, as
against 6.5 per cent in the corresponding period last year.
Talking about the agriculture sector, he said it was likely to
achieve the target growth rate of five per cent in the current
"The Kharif crop will yield an estimated 51 million tons of
sugarcane, an increase of 24 per cent over last year. Rice is also
expected to surpass last year's level by four per cent."
The finance minister claimed that the cotton crop would yield an
estimated 9.4 million bales against a target of 11 million bales.
But experts said it would be a miracle if the yield touched the
nine million mark.
He said the production of wheat was expected to touch a record
level of 19 million tons.
The manufacturing sector, Sartaj Aziz said, was showing some signs
of revival, although it was slower than expected. "Revival in the
manufacturing sector during November had been rather significant;
the industrial output increased by 5.1 per cent over the
corresponding month of the last year."
Consequently, cumulative growth which was virtually zero, increased
to one per cent in July-November period over the corresponding
period of the last year.
Discussing the performance of the stock market, the finance
minister said it had shown a considerable improvement in the
initial period, but received setback during the current month due
to upheavals in regional markets.
The banking sector reforms had made a good progress in terms of
reducing administrative expenditure, recovery of stuck-up loans and
improving overall efficiency.
He told a reporter that bad loans worth Rs 9 billion had been
recovered. He said under a formula worked out by the State Bank,
loans worth Rs 54 billion were likely to be recovered out of a
total of Rs 96 billion. "There is going to be a balance of Rs 25
billion, which will be recovered through the establishment of
banking courts and through foreclosures", he added.
One of the major negative sides of the first six months of 1997-98,
the finance minister admitted, was a shortfall in revenue
collection. He pointed out that there wax a shortfall of Rs 11
billion in the first six months of the currently financial year.
The collection of tax revenues for the first quarter was in line
with the target of Rs 62 billion, but in subsequent months showed a
shortfall of about Rs 11 billion. While this shortfall will be made
up to the tune of Rs 6 billion through non-tax revenues, there will
be a shortfall of Rs 5 billion.
Bank borrowing, the finance minister said, for July-December had
been contained at Rs 39 billion. The figure for the corresponding
period last year was Rs 81.3 billion.
He also admitted that the government was facing problems in
managing the affairs of public sector corporations, especially
Answering a question, he said it was a difficult task to resolve
the financial problems of WAPDA without allowing to revise its
tariffs upward. "The minister for power is currently in NWFP to
discuss and remove undue subsidies to FATA", he said, adding that
some other measures were being taken by the government to make the
public sector corporations financially viable.
He said the improvement in the balance of payments position was
party due to a decline of six per cent in imports and partly due to
larger inflows of remittances and funds for foreign currency
accounts. But exports, on which sustainable improvement in the
balance of payments actually depended, grew by only 7.1 per cent
against a target of 15 per cent, he added.
He pointed out that despite reduced revenue generation, slow
industrial growth, damaged cotton crop and the recent fall in the
exchanges reserves, things were showing signs of improvement. "I do
no share gloomy predictions and I see a definite improvement this
He said seven reform packages given by the government could not
give desired results due to Asian currencies and stock markets and
due to the political crisis.
He was hopeful that the new investment policy would have about 10
billion dollars in local and foreign investment in various sectors,
especially ports and shipping, telecommunications, information
technology, power generation and transmission and highways.
Responding to a question, Mr Aziz said the IMF was likely to offer
the second tranche of 208 million dollars out of 1.6 billion
ESAF/EFF. "Hopefully we will be meeting the Fund's performance
Answering a question, the Deputy Chairman of Planning Commission,
Dr Hafeez Pasha, said the government was not burdening its citizens
with new taxes. He said overall taxes contributed only one per cent
of the GDP. For most of the countries in the region the ratio was
two per cent.
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EDITORIALS & FEATURES
The Rai Wind
THE more uneducated the people, the more they acquiesce in the rule
of those who exercise dictatorial authority. Each ruler of this
country has capitalized on, and perpetuated, this imposed failing
of the people.
With abounding illiteracy, a ruler can practise self-
aggrandizement with ease. Then, the stage finally comes through a
process of sycophancy, and through the vying by the ruled for
crumbs and favours, when the ruler is convinced that he can do no
wrong, that he is the political redeemer of the 21st century. This
country has now reached that stage.
It has been made abundantly clear that the rulers we have had, be
they from Larkana or Model Town, are not strong enough to live with
or survive a strong and independent judiciary.
A sound economy is what the people require to live and to thrive.
Governed by the incompetent and the corrupt, as this country has
been for the past ten years since the resurfacing of democracy, the
people's money and assets have devalued to the extent of 80 per
cent. The downward trend continues unabated. No ruler has had the
'niyat' or the 'irada' to stem it. Each ruler and his camp-
followers have left the stage to go home far richer, far more
prosperous, than when they came in. And in each case the country
and its people have been left poorer.
The situation is becoming more and more difficult by the month.
Firstly, we have enormous fundamental organic problems. In simple
economic terms, Pakistan has been living far beyond its means for
the past 20 years and has done so by accumulating a mountain of
debt, foreign as well as local. No country, or organization, or
concern, can carry on living beyond its means, continuously
borrowing to do so, and survive.
Initially, we borrowed from foreign governments and international
organizations, most of which borrowing was on soft terms. In recent
years this has changed. The old sources have dried up and we have
borrowed short term at much higher interest rates, and increasingly
What we are borrowing at present is just about sufficient to pay
back past loans, to pay interest on these loans, and to pay for all
reducible current expenses, leaving little or nothing for
development or for increasing earning capacity. The Lahore-
Islamabad motorway may be considered to be a development project,
but in actual fact we will be paying interest in the region of $250
million (some Rs 1,200 crores) a year for many years to come on the
loans taken to build it, recovering only a small fraction of this
sum from tolls, and borrowing further to pay off the balance.
A situation will soon arise where all our tax receipts, all our
revenues, all our earnings, will be soaked up solely by debt
servicing which is increasing by the day.
As this debt servicing builds up, our tax receipts and revenues are
steadily falling as a proportion of GNP. To offset the deficit,
successive governments have continued to slap more taxes, new
taxes. But how much can the people bear? Today, Pakistan's ratio of
tax receipts to GNP is one of the lowest in the world, while the
tax burden on those who pay taxes — the taxpayers are a very small
minority — is one of the highest.
There has also been a progressive decline in the earning capacity
and efficiency of public institutions. So, while public employment
and public expenditure have increased, basically the government as
a whole is a drag on the economy and is unproductive.
Simultaneously, while the efficiency and fiscal capacity of the
government have been reduced, there has been increasing
centralisation. The provincial governments are empty shells,
particularly Sindh and Balochistan.
The economic and social conditions in large cities are fast
deteriorating. One has only to travel to the less affluent parts of
Karachi, Lahore, Gujranwala, and other such cities to see the
misery, squalor and pollution that abound and in which people exist
— open sewers, broken pipelines, lack of potable water, decaying
roads, solid garbage, scattered sewage, dirt, and dust.
Social services, particularly education and health, are of no
concern to the government. They have been consigned to the private
sector which can serve only the upper income groups and not the
majority middle class and poor. In sum, the state of Pakistan has
lost its social purpose. It exists for the few who benefit from
land, loans, favours and scams. The state cares not a whit for the
mass of the people.
Now to the short-term scenario. Massive short-term borrowing can
only lead to a crisis in the build-up of debts and in fiscal
incompetence. One would have expected this government to at least
have attempted to stop the haemorrhage by quickly increasing
earnings, improving and reforming the tax collection system (which
does not necessarily mean the imposition of more taxes), and
streamlining the tax administration through a substantial reduction
in unproductive expenditure, but this has not happened. In real
terms, tax receipts and earnings this year will be less than last
The short-term borrowing binge continues. The much talked about
increase in external reserves is a fraction of the short- term
borrowing that has taken place since February 1997.
The economy is rapidly being dollarized i.e. people have so little
confidence in the domestic currency that they prefer to hold their
money in dollar deposits, which are now close to $10 billion.
Interest earned on these is exempt from all taxes, so they are of
no earning benefit to the nation. Commercial banks surrender the
dollars to the State Bank, i.e. to the government, which spends the
money without having assets to cover the $10 billion in
The State Bank gives an exchange rate guarantee to the government
on these deposits, which means that every time the dollar
appreciates by four to five rupees, the liability of the State
Bank, i.e. of the government, goes up by the equivalent of a
billion dollars uncovered by any assets.
The government's credit in the international market is so low that
the rating on government liability has been reduced by the rating
agencies to just short of junk bonds.
Pakistan's largest creditor, Citibank, now insists on the pledging
of future receivables, e.g. future remittances from workers abroad,
and future dollar receipts of PTC ($400 million per year). The
government's guarantee, the sovereign guarantee, is no longer
The recent East Asia debacle should act as an eye-opener to us.
Some of the world's most admired and rapidly growing economies, the
Asian Tigers, were done down by the blind accumulation of short-
term debt. All it took was a little panic and the refusal of
international creditors to roll over the debt.
We would have some hope of survival if we were to see a vigorous
move for the reform of public finances and for a rational exchange
rate policy. Unfortunately, these are not there. The pace of
improvement in tax collection, in tax revenue administration, and
in the shedding of multiple taxes, is not fast enough. The policy
of large periodic devaluations, rather than the previous crawling
peg, is disastrous. It is like water accumulating beneath a weak
dam which will inevitably burst.
According to an international banker, if the IMF releases its next
tranche, it will postpone the ultimate disaster only by six months.
No sane sensible foreigner who has value for what he has earned,
saved, or inherited will invest in Pakistan, particularly when the
Pakistani does not invest in his own country. Flotations inviting
share subscriptions have steadily declined. Last year, only four
companies were floated on the Karachi Stock Exchange.
Nawaz Sharif, no economist or a wrangler himself, operates with a
rotten, ineffective team. Now, the Rai Wind has blown in DW-1 to
help him. Whilst the country and its people flounder, he and his
Ittefaq empire have just managed to reschedule some Rs 10 billion
(Rs 970 crores to be precise) worth of loans. We wonder how much
the Sharifs were able to borrow before Zia picked Nawaz Sharif up
and put him into politics.
A stint to remember
By Irfan Husain
MY toughest critic is my son Shakir who is a student at Whittier
College in L.A.; we exchange e-mail messages practically every day,
and thanks to the Internet edition of this newspaper, he reads this
column the day it appears.
A few days ago, I read this request from Shakir: "Dear Abba, I was
talking to my friend Ali who is in Houston, and we decided that you
write very bleak stuff! I know it must be hard to write otherwise,
given the political scenario, but try to write about fun(ny) stuff
once in a while. That may improve the blood pressure as well... no
harm in giving it a try, is there?"
Looking back, I realized that my last few columns were indeed full
of doom and gloom. In my defence, let me point out that between the
judiciary, our power-mad politicians and our stagnant economy,
there are not many fun(ny) things to write about. Our mental
horizon has been so circumscribed by the antics of people like
Nawaz Sharif and Benazir Bhutto that we have virtually stopped
thinking about other issues.
Nevertheless, I have been racking my brain these last few days,
trying to comply with Shakir's request. I don't know if I have
succeeded, but this column is for him.
Every time I see a newspaper report about yet another delegation
heading for foreign capitals to plead the Kashmir cause, I am
reminded of my stint at our embassy in Washington as minister
(information) in 1989-90. Among other duties, my job entailed
lining up the media for harangues from visiting junketeers. It got
to the point where my friends in the Washington press corps would
beg me to be let off: "Look," they would say, "we know all about
the Kashmir issue. What is your minister [or adviser, or secretary]
going to tell us that is new?" Considering that there are around
600 press officers in Washington representing various governments
and international organizations, rounding up journalists covering
the international scene was always an uphill task.
To persuade them, I would hint at earthshaking revelations, and
promise exclusive interviews (which reporters didn't want anyway),
and finally have the wretched press conference organized. The same
old stuff would be trotted out; the same glazed look would appear
on the audience's faces; and the same stale cookies would be placed
before us. The coffee, however, would be fresh. As soon as decently
possible, the reporters would make their escape - declining the
VIP's offer of an exclusive interview - leaving me and my
colleagues to our fate. Now would come the hard bit: trying to
persuade tough editors to use the stories their reporters would
file, and not kill them.
Apart from the pages of American newspapers, the Kashmir war was
also fought in the corridors of the US Congress and the UN.
Experienced congressmen and diplomats would duck for cover into
nearby toilets when one of our delegations was spotted in the
distance. Actually, it was quite easy to recognize our Kashmir
commandos because they looked like penguins in their uniform of
black sherwanis and white shalwars.
I am glad to report that after my return from Washington, the
struggle for Kashmir continued unabated in the first class sections
of airlines and in five-star hotels around the world. Our
indefatigable delegates criss-crossed the globe, sacrificing their
time and comfort, in their tireless effort to convince foreign
powers to support our just cause.
One Kashmir commando who clocked enough air-miles for the cause to
travel from the earth to the moon and back three times earnestly
assured me that he would be so concerned about the plight of the
poor Kashmiris that there were times when he sent the free
champagne back while flying first class. Talk about sacrifices. And
although the first-class seats in British Air stretch out into
proper beds, he would turn and toss all night, thinking about the
Pakistani taxpayers footing the bill. I, for one, was deeply moved
by his sensitivity.
There are probably many readers who feel this kind of lobbying is
fruitless since no foreign government is going to change its policy
because of a delegation flying in on a junket. In any case, they
will argue, we have diplomats in all the major capitals of the
world to do this kind of lobbying. They miss the point that the
whole purpose of the exercise is to persuade hawks in Pakistan that
"something" is being done about Kashmir. And obviously, the more
money the government spends, the more effective its efforts have to
be. Also, our Kashmir commandos are willing to make any sacrifice,
but we can hardly expect them to travel by economy class, or to
stay in three-star hotels. It's enough that they are willing to
give up their time; asking them to do without free caviar and
champagne is churlish and petty.
When Nawabzada Nasrullah headed the Kashmir Committee during BB's
last (and I mean last!) stint, he had to have a fleet of fully-
loaded limousines to ferry his troops in. He and his comrades-in-
alms jetted around the world, drumming up support from the Comorros
Islands to Cameroon. And in case they needed to recuperate from
their labours in a nearby Club Med resort, who could grudge them
this little perk? If some of these high-powered delegations
included actual Kashmiri freedom fighters, they would naturally fly
economy because they weren't entitled to first class. But the
Nawabzada would be with them in spirit.
Although the international press was strangely silent on all these
comings and goings, the Pakistani media would record the triumphs
of our Kashmir commandos in bold print. Harassed press officers
like me would barter our souls for a few column-inches of coverage.
The representatives of the Pakistani press abroad would be pressed
into service to make a splash in the papers back home. After all,
the Pakistani taxpayer had to be told what he was getting for the
multi-million-rupee fight to liberate Kashmir.
I have learned that the caretaker government ended first-class
travel for government functionaries during its brief stint. I feel
this is a grave setback to the Kashmir cause, and Nawaz Sharif
should immediately bring back the old policy. After all, Kashmir
can't be won in the narrow seats of the economy section.
Focus on good governance
GOOD governance has become a major concern of the government,
particularly after Prime Minister Nawaz Sharif realised the
futility of open kutcheriess. And good governance is being
approached on a very broad basis, and is designed not only to
ensure clean and efficient administration and proper law and order
but also higher industrial and agricultural productivity.
He is also under pressure from the World Bank, IMF and other donors
to bring about a distinct qualitative change in the administration
down to the grass roots level. So while the Administrative Re-
sctucturing Committee headed by Mr Fakhr Imam is cautiously pre-
occupied with the exercise of downsizing the labyrinthian
administrative structure, another committee headed by Mr Ahsan
Iqbal who is leading the vision 2010 group, is drafting
recommendations to ensure good governance in a country marked for
its prolonged bad governance.
A special meeting of the federal cabinet considered the problems of
good governance on Monday and set up a large cabinet committee
under Mr Mushahid Hussain to suggest changes in rules of business
of government and ensure quick disposal of cases, and asked Raja
Zafarul Haq to consult his cabinet colleagues and submit
suggestions for good governance and speedy justice.
Clearly, the government is working along several parallel lines to
achieve a turn-around in the corrupt and inefficient administrative
machinery and bring about good governance. Meanwhile in yet another
ambitious move the government has broadened the scope of the census
delayed for seven long years by now, and seeks data on the wealth
of each citizen as well, and expects the people to respond to as
many as 30 columns in the enumeration form and get it duly attested
before handing it over to the census enumerator. If all these
details can be honestly and accurately filled by people in a
country with barely 12 per cent effective literacy rate that will
be a major achievement, otherwise the census may come up with some
very misleading figures which may lead to even more misleading
conclusions. Clearly the intentions of the government are good but
what matters is the eventual right decision and earnest and
effective implementation at all levels of the administration or how
the large traditional gap between the decision and action in
reality will be filled.
In this area while the people talk disparagingly of the performance
of the officials, the officials talk of their poor pay and skip
their large emoluments or reduce their value. My article on total
cash salaries to public servants (December 18) has produced some
strong reactions from senior officials, serving or retired, in
Islamabad. While they agree with the principle that they be paid
total cash salaries, they disagree on the amount to be paid in lieu
of the varied perquisites. One of them has estimated the total
value of the perquisites they now get at Rs 50,000 to Rs 60,00
while their cash salary is around Rs 20,000. Then some of them
argue if they are to be paid total cash salaries they should be
paid Rs 2.5 to Rs 3 lakh per year along with upward adjustments for
inflation, so that they are on a par with multinational company
chiefs. What they are asking for is a four-fold rise in their total
The fact is that if the secretaries have to be paid Rs 3 lakh, the
additional secretaries, joint secretaries, and deputy secretaries
too have to be paid correspondingly high salaries. In a country
which employs over 3.5 million people in the government sector from
the federal government to local bodies that would mean a tremendous
jump in pay bills. The government may be able to pay that if there
is no corruption in the varied taxation services and there is no
corruption on the expenditure side as well which can make all
official spending meaningful. This is an uphill or impossible task
as the current Ehtesab exercise shows 14 months after the fall of
the last government.
Look at how the top heavy administrative structure has proliferated
in Pakistan. In the olden days the under-secretary and the deputy
secretary were the backbone of the administration. Now while the
under-secretary and assistant secretary have become section
officers we have too many additional secretaries and until recently
a large crop of secretary generals too. Several of the secretary
generals later went on to become advisers to prime minister with
cabinet rank and then wrote books on our all-round downslide as
Roedad Khan has done.
Compare that heavy top structure with the simple structure of
foreign private sector companies. Until recently Burma Shell with a
turn-over of over Rs. 10 billion was managed by a general manager.
Even when foreign companies came to have managing directors after
they went public their higher hierarchy remains small. Unlike the
government these companies have to pay regular substantial dividend
to their share-holders abroad. Otherwise the chairman is sacked.
When our senior officials talk of being paid the same emoluments as
multinational chiefs, they do not realise that the average life of
a US chief executive now is two years. The pressure is on them not
for annual balance sheets of their performance but for quarterly
balance sheets and good divideds against heavy odds and stiff
But if a secretary to the government does not do well in a ministry
he is transferred to another ministry and does not get the sack.
Look at the hierarchy in the government. In the name of
administrative reforms we did away with four classes in public
service and came up with 22 grades and then capped the pyramid with
a secretary general. Surely those who head or work in such a
labyrinth cannot be paid like those in the private sector with no
absolute security of tenure and no service tribunals to protect
them and no high courts to appeal to or file a writ.
The officials who have protested against the manner I had
quantified their emoluments has quoted only what the services rules
permitted them and not what happens actually. It is true there are
some secretaries who go by the rules and are conscientious, but
they are the exceptions. When I wrote of secretaries having two
cars with two drivers I did that on the basis of the bitter
complaints of the staff of ministries and departments not only in
Islamabad but also in provincial capitals where the staff car is
used by the boss, while the official car is used by his wife or
The abuses by secretaries who have several corporations or
departments under them and get a variety of perquisites from them
are too well known. Even a former information secretary got two
airconditioners and a car each from PTV and Radio Pakistan
immediately after assuming office although he was a non-cadre man.
Not that such abuses are confined to the bureaucrats. Ministers and
even Speakers of assemblies have been guilty of such offences.
Judges too can be lavish in spending on themselves. A former
minister for production was told by a young nephew that he had too
many cars. He replied he was entitled to 62 cars but had only 16 at
a time. He meant he could get one car from each of the corporations
or companies under him.
That is why all-cash salaries should be given not only to officers
but also to ministers and other public functionaries. Recently a
senior finance ministry official from Islamabad asked for a car
from a bank headed by a foreign executive in Karachi. The latter
told him that all the surplus cars of the bank had been sold off to
reduce the losses of the bank and that he could give the officer
his own car while he take a taxi home. Finance Ministry officials
never repeated this otherwise common request. But it takes a strong
man with the right connections to take such a clear stand. When we
talk of the emoluments of senior officers these should include
several large plots of land they have been able to get at nominal
official prices either to build houses to rent or sell. They began
from the PECHS in Karachi and then moved to Islamabad. The Punjab
officials got more plots in Lahore and other cities. In the 1970s
despite the rather anti-bureaucratic stance of the Zulfikar Ali
Bhutto government a large number of officials from Islamabad got
2,000 sq yard plots in Phase IV of Kehkeshan, Clifton.
And look at the number of taxis secured by the wives or designated
servants of senior officers during the first Nawaz Sharif
government and later in their own name as Ms Benazir Bhutto chose
to distribute the left-over taxis among government officials.
The basic problem is the low salaries of the non-perquisite class
of officers, high cost of living and the high standard of living
which is made to seem the norm by the feudal class and tribal
leaders and now the expanding criminal classes. The problem has to
be tackled at many levels. If the feudal class is made to pay
proper taxes as well the actual cost of irrigation water they will
have less to waste or flaunt.
And if the high inflation is checked the salaried officers as well
as others will be less unhappy. But it is the officials themselves
who under-state the extent of inflation, as they are doing again
now, and they can't then blame others for not paying them enough.
What the senior officials have been doing is to cushion themselves
through varied perquisites and expose others to soaring inflation
Saqlain creates world record
ISLAMABAD, Jan 16: Off-Spinner, Saqlain Mushtaq has created world
record by taking 150 wickets in 78 one-day matches.
Saqlain took his 150th wicket in limited-overs game, when he got
Indian wicketkeeper Nayan Mongia out in the second final of Silver
Jubilee Independence Cup at National Stadium Dhaka on Friday.
His best one-day bowling performance is against Australia. He
mesmerised 5 Australian batsmen for 29 runs in a match of the World
Series Cup played at Adelaide, Australia during 1996-97 season.—
Zahid helps PIA beat ABL, avoid relegation
By Our Sports Reporter
KARACHI, Jan 13: Zahid Fazal struck a superb unbeaten 78 to
spearhead Pakistan International Airlines (PIA) to a four-wicket
win over Allied Bank and which also helped the winners ward off the
ignominy of relegation in Patron's Trophy.
The national carriers, resuming on the final day of the four-day
match at the National Stadium at 66 for four and chasing 169 for
victory, slumped onto further depths of crisis when they lost
Nadeem Khan (9) and Aamir Malik (3) in the first 30 minutes of play
to be reduced to 84 for six.
But Zahid Fazal, together with last innings hero Moin Khan, steered
PIA to victory without any further damage as the airlines notched
their first win of the season in 80 minutes.
Fazal, who was overnight 19, batted with controlled aggression to
slam 14 delightful boundaries in his 105-ball knock that spanned
over 141 minutes.
Fazal reached his half century from 91 balls with eight elegant
Moin Khan, who scored 129 in the first innings, remained unbeaten
on 24 with three boundaries. He faced 41 balls.
The two batsmen added 86 runs for the unbroken seventh wicket.
Fazal drove gracefully and cut ferociously to show that he was
still one of the finest and elegant looking batsmen in the domestic
circuit today. But what has been badly lacking in him is the
element of consistency.
At the Test level, he faltered despite being a heavy scorer at the
Under-19 and domestic levels. Even this season, he has come in bits
and pieces but he delivered his best today when his team
desperately needed a match-winning knock from him.
Allied Bank, though suffered their second loss of the round robin
league, still topped the eight-team table with 46 points. They now
face Habib Bank in the final. Habib Bank sneaked ahead of National
Bank and KRL to finish with 28 points. NBP finished with 26 points
and KRL ended up with 20 points.
Allied Bank Test pace duo of Mohammad Akram and Aamir Nazir were
attacking and hostile from the very start. But it was Akram who
provided the breakthrough by sending Nadeem Khan's stumps
In the following over, Aamir Nazir destroyed the symmetry of Aamir
Malik's stumps to put Allied Bank on top of the match.
But Zahid Fazal and Moin Khan had other ideas as they batted
carefully and confidently to score the remaining runs without being
Mohammad Akram finished with three for 59 for a match figures of
six for 152 while Aamir Nazir ended up with three for 70 for a
match analysis of eight for 174.
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