------------------------------------------------------------------- DAWN WIRE SERVICE ------------------------------------------------------------------- Week Ending : 12 June 1999 Issue : 05/24 -------------------------------------------------------------------
Contents | National News | Business & Economy | Editorials & Features | Sports
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CONTENTS ===================================================================
NATIONAL NEWS + Budget to have outlay of Rs665bn + Every inch to be defended: COAS + China backs Pakistan's efforts to ease tension + Sindh local councils face financial crunch + 22 Indian soldiers killed: Two major ground attacks repulsed + Services sector: Govt undecided on GST + Debate on cyclone: Warning came only 24 hours before + Pressler Law repealed: US Senate suspends sanctions for 5 years + NWFP anticipates Rs36.8bn revenue + Govt acted according to Constitution, SC told --------------------------------- BUSINESS & ECONOMY + Shahbaz invites US cos to invest in Punjab + Move to set tax revenue target at Rs450b + Pakistan can earn $100m from exports to Iraq: EPB chief + State Bank enhances penalties + Govt urged to contain budget deficit + Falling interest rates make TFCs attractive option + Warrants issued against defaulters + No new sales tax notices to traders, assures CBR + Rs2,000 per ton duty levied on cooking oil + Russia ready to transfer pharma technology + Stocks turn volatile on eve of budget --------------------------------------- EDITORIALS & FEATURES + Bullies are cowards - 2 Ardeshir Cowasjee + The great divide Islamabad diary Ayaz Amir + Passions and paranoia Irfan Husain ----------- SPORTS + Saeed Anwar blasts 103 off 144 balls: Pakistan in Semi-finals + Champions Trophy: Spain hold Pakistan to 1-1 draw + Pakistan face fresh ball-tampering charge

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NATIONAL NEWS

990612
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Budget to have outlay of Rs665bn
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Bureau Report
ISLAMABAD, June 11: The federal budget being presented in the 
National Assembly here on Saturday morning will have a total outlay 
of Rs 665 billion, envisaging imposition of 15 per cent GST on 
services sector and a 10 per cent increase in the defence budget.
    
According to informed sources, Finance Minister Ishaq Dar who will 
present the budget, was also likely to announce increase in the 
salaries of the government employees.
    
A fiscal package for the poorer sections of the society has also 
been put together which reportedly offers five marla plots or 1,000 
square feet apartments in major cities.
    
The amount of debt servicing, sources said, was likely to be 
reduced in the budget and it will be around Rs 170 billion. This 
has been made possible because of the Paris Club's decision to 
reschedule Pakistan's 3.3 billion dollar debts till December 2000.
    
"The defence budget will have a minimum 10 per cent increase over 
last year," said an official.
    
He also said that there was no proposal to impose heavy taxes and 
that if the 15 per cent General Sales Tax (GST) was extended to the 
services sector, then there was no need to impose additional taxes 
or increase their rates.
    
The size of the Public Sector Development Programme (PSDP) approved 
by the National Economic Council (NEC) early this month at Rs 116 
billion was likely to be expanded to Rs 118 billion in the final 
budgetary proposals.
    
Sources said that the visiting IMF mission headed by Ms. Sena Eken 
held an important meeting with the officials of the ministry of 
finance on Friday and made them agree to extend the GST on services 
sector.
    
"Your government has no option but to go for this new Value Added 
Tax (VAT) on services sector", said a source in the local office of 
a multilateral agency.
    
The source said that there have been gross revenue slippages during 
the first 11 months of 1998-99 and despite the revision of targets, 
the CBR was not able to meet the revised target of Rs 303 billion. 

Under these circumstances, he said, the government will have to 
introduce GST on the services sector.
    
The government has been advised to levy tax on agriculture income. 
The IMF believed that since the government could not even recover 
Rs 2 billion as part of the tax on agriculture income in 1998-99, 
it was necessary to increase the volume of this tax through various 
measures.
    
"As of today the government is undecided whether to effectively 
impose the tax on agriculture income because of the lobby of the 
powerful PML legislators who have big land holding", said a source.

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990611
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Every inch to be defended: COAS
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RAWALPINDI, June 10: General Pervez Musharraf, Chairman of Joint 
Chiefs of Staff Committee and Chief of Army Staff, has said 
Pakistan armed forces are committed to the defence of every inch of 
the country's sacred territory.
    
He visited the Combined Military Hospital here on Thursday. He went 
round various wards and inquired about the condition of patients. 
   
He also met troops who were injured while performing their duties 
along the Line of Control.
    
Lauding their courage, devotion to duty and high morale, the army 
chief said:" We, by the grace of Allah Almighty, are capable of 
thwarting any nefarious design of the enemy and have yet again 
demonstrated this with traditional proficiency."
    
During his visit, Gen Musharraf was accompanied by Corps Commander 
Lt-Gen Mahmud Ahmed and other senior army officers.PPI

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990612
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China backs Pakistan's efforts to ease tension
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BEIJING, June 11: Foreign Minister Sartaj Aziz said on Friday China 
had supported Pakistan's stand for a negotiated end to the Kashmir 
dispute.
    
After a day of hurried diplomacy in Beijing, the foreign minister 
criticized Indian claims that the bodies of six soldiers returned 
by Pakistan had been mutilated. He said India had lodged no 
immediate protest when the bodies were handed over.
    
"Obviously it must be an afterthought to damage Pakistan's image," 
Mr Sartaj Aziz said.
    
In his talks with Chinese legislative head Li Peng and Foreign 
Minister Tang Jiaxuan, Sartaj Aziz said China "shared our view that 
the situation should be de-escalated and solved through dialogue 
rather than military means."
    
Li, No 2 in the ruling Communist Party hierarchy, told the foreign 
minister that Pakistan and India should work together "to prevent 
the situation from deteriorating in order to maintain peace and 
stability in the region," Xinhua reported.
    
Mr Sartaj Aziz said he neither asked for, nor did China offer, any 
financial or material support in case the conflict continued or 
escalated. But he said China reaffirmed its commitment to the 
"sovereignty and territorial integrity of Pakistan."
    
Xinhua quoted Foreign Minister Tang as telling his counterpart "the 
recent conflict in Kashmir has caused great concern among the 
international community. The Kashmir issue is a complicated affair 
with a long history that should be and could only be solved through 
peaceful means."
    
"Out of consideration for maintaining peace and stability in the 
South Asian region, Pakistan should remain cool-headed and exercise 
self-control and solve conflicts through peaceful means and avoid 
worsening the situation," said Li, chairman of China's legislature, 
the National People's Congress.
    
"We hope that India and Pakistan will resume dialogue and return to 
the path of peaceful negotiations," said Li, who also briefed Mr 
Sartaj Aziz on China's stance on the Kosovo issue.AFP/dpa

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990612
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Sindh local councils face financial crunch
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Sabihuddin Ghausi
KARACHI, June 11: A decision taken by the Inter-Provincial 
Coordination Committee (IPCC) on June 3 to abolish the octroi and 
export tax from next July has literally given a crippling blow to 
about 900 local councils in Sindh and officials fear that KMC and 
other institutions may not be able to come out with their 1999-2000 
budgets this month.
    
According to this decision, which by design or by default did not 
find much coverage in the media, the federal government will now go 
all out for collection of sales tax at the rate of 15 per cent. 
*From this collection, the federal government will compensate the 
local councils in all the four provinces for the loss of their 
revenue which they would suffer on account of abolition of octroi 
and other municipal taxes.
    
Modalities of new resources distribution plan are still being 
awaited. Officials however believe that from 15 per cent of the 
sales tax, 12.5 per cent will go to the federal divisible pool and 
remaining 2.5 per cent of sales tax would be disbursed among the 
local councils.
    
In Sindh there are 907 local councils functioning at various tiers. 
These include 9 municipal corporations, 17 district councils, 70 
town committees besides union councils.
    
Official estimate of octroi and other municipal related taxes 
collection in Sindh are about Rs 8 billion. Of this the Karachi 
Metropolitan Corporation collected Rs 4.2 billion octroi in 1998-
99.
    
Reports trickling in from Islamabad suggest that tax collectors are 
estimating Rs 95 to Rs 100 billion sales tax collection next fiscal 
year. Of this hardly, Rs 2.5 billion would be available for the 
local councils, which by all means is very meagre amount even for 
Sindh.
    
Provinces are reported to have asked Islamabad to inform them of 
specific figures of the amount that would be mopped up from sales 
tax and the funds to be made available to the local councils. The 
demand is that provinces be told in clear terms the availability of 
funds in 1999-2000 and onwards keeping in view the inflationary 
impact and the rise in non-development expenditure that local 
councils incur on completion of their development schemes.
    
Octroi is the main source of revenue for all the local councils in 
the country and for KMC it constitutes more than 90 per cent of 
revenue. However it is considered to be a primitive, outdated and 
obsolete levy. Its collection by the private contractors made it an 
irritant for the businessmen who are literally coerced to pay it on 
the highly inflated rates for transportation of various industrial 
inputs or production.
    
Therefore the bureaucrats interpret abolition of octroi and the 
plan on enlargement of sales tax net a government deal with the 
businessmen. The businessmen have been opposing the levy of sales 
tax at the retail level and "now they have been given the incentive 
of abolition of octroi to pay sales tax" a senior officer 
explained.
    
However, the decision has far reaching political implications as 
the former senior minister in the dismissed PML-MQM coalition 
government in Sindh Dr Farooq Sattar considers it an act which is 
against the federal spirit of the constitution and amounts to 
usurping the power of provincial governments and local bodies 
institutions.
    
"If at all the octroi and other local taxes were to be abolished 
and were to be substituted by sales tax, the collection should have 
been given to the provinces and local government institutions" he 
told Dawn. "Universally sales tax is a provincial and local levy" 
he argued.
    
Nisar Khurho, leader of the PPP in the Sindh Assembly sees the move 
as "further pauperisation of Sindh by the government which is 
averse to the niceties of the constitution".
    
He said that the PPP would soon contact other parties that include 
MQM, Jamat Islami, Awami Tehrik and other groups who have interest 
of Sindh dear to their heart to work out a joint strategy against 
this move.
    
Tax collection figures show that Sindh generates the highest amount 
of sales tax than any other province. An official document, a 
position paper of Sindh given to the last National Finance 
Commission showed that total collection of sales tax during 1990-91 
to 1993-94 amounted to Rs 80.03 billion. Out of this Rs 56.16 
billion was collected in Sindh, Rs 12.33 billion in Punjab, Rs 4.18 
billion in NWFP and Rs 4.30 billion in Balochistan.
    
The federalisation of sales tax and putting it in the divisible 
kitty for distribution on the basis of population will affect Sindh 
badly. According to the officials the IPCC decision has been taken 
in the light of the recommendations made by a committee on 
harmonisation of taxes formed in 1997 with the then Advisor on 
Finance Dr Hafiz A Pasha as its head. Ironically another committee 
with Punjab Chief Secretary as its head is working out plan for 
decentralisation and devolution of the power.
    
Officials in Sindh government are at a loss to understand how could 
the grass root level institutions would be empowered when their tax 
collection authority was snatched.
    
As the situation is, all the budget making exercises in the KMC, 
HMC and other local councils have come to a virtual halt as there 
is total confusion on availability of resources during the next 
fiscal year.
    
"Perhaps the 1999-2000 federal budget being announced on Saturday 
may reveal some details of the government plans to finance the 
local councils" is the hope expressed by a senior officer in the 
KMC.

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990612
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22 Indian soldiers killed: Two major ground attacks repulsed
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Bureau Report
ISLAMABAD, June 11: Pakistan Army has repulsed two major ground 
attacks launched by India against its posts along the Line of 
Control, and destroyed the enemy's petrol and ammunition depot near 
Drass besides killing 22 enemy soldiers.
    
These clashes, which took place during the last 48 hours, also 
resulted in the martyrdom of eight soldiers of the Pakistan Army 
and caused injuries to five others, DG ISPR Brigadier Rashid 
Qureshi told newsmen in a briefing here on Friday.
    
Quoting reports received from various sources, the army spokesman 
said that the Indian Army had suffered heavy casualties since May 
last when the clashes between the two sides started escalating.
    
"They have so far suffered around 900 casualties which include over 
250 dead," Qureshi said, adding, "India, however, is playing down 
this figure." Pakistan Army, he stated, during the same period lost 
37 soldiers while 40 were wounded.
    
Giving details of India's latest attempts to capture Pakistani 
positions during the last 48 hours, he said in Drass area, the 
enemy resorted to heavy artillery firing at Pakistani positions.
    
The Pakistan Army, in retaliation, destroyed a petrol and 
ammunition depot of the Indian Army, he said.
    
In Kargil Sector, a ground attack followed by heavy artillery fire 
was launched by India but it was repulsed and eight Indian soldiers 
were killed. In Batalik Sector, another ground attack was beaten 
back and the enemy was seen dragging 12 to 15 bodies, said the 
brigadier.
    
Besides, the Indian Army continued its artillery and mortar fire on 
other areas of Kashmir along the LoC including Kel, Rawalakot, 
Kotli and Bhimber.
    
Rejecting the Indian allegation that the six bodies of Indian 
soldiers returned early this week were mutilated by the Pakistan 
Army, he said, "This charge is ridiculous and absurd."
    
"This is Indian propaganda to malign the government of Pakistan and 
the army," he said.
    
After recovering these bodies from a very difficult area, he said 
the Pakistan Army handed them over to the Indian Army with full 
military honours on June 9th. On the occasion of flag meeting when 
these bodies were returned, no such observation was made by the 
Indian Army.
    
"It's an afterthought to further vitiate the peace talks opening in 
New Delhi on Saturday," he stated.
    
Responding to a question pertaining to the production of an alleged 
transcript of telephonic talk between General Pervez Musharraf and 
his second-in-command General Aziz by India, he said, "I don't 
think it should be given any credence or weight" and added that it 
was Indian propaganda.
    
According to the questioner, the Indian Army had said that General 
Musharraf while talking to his second-in-command from China during 
last month, had said that Pakistan Army could pull back the 
Mujahideen from Kargil whenever it liked and that Pakistan should 
not talk to India and further that there should be no ceasefire at 
the LoC.
    
Brigadier Rashid said that India had been producing horrendous and 
absurd stories but its propaganda had not been given any weight.
    
"Pakistan Army had neither any control over the Mujahideen fighting 
for their right of self determination in the Indian-Held Kashmir 
nor any Pakistani soldier had crossed the LoC," the spokesman said. 
He also denied the allegation that Pakistan was sending Mujahideen 
into the Indian-occupied Kashmir.
    
He said Pakistan was pressing to de-escalate the situation and 
wanted a ceasefire along the LoC but it had no control over the 
Mujahideen fighting inside the Indian-Held Kashmir for their 
freedom.
    
"We can only say that Pakistan will not retaliate if it is not 
attacked by India but beyond that if Mujahideen are doing 
something, we are not responsible for that."
    
Referring to the Indian military build-up along the LoC, he said, 
"Our assessment is that India wants to push Pakistan back from its 
important positions along the LoC to clear its movement in Drass 
and Kargil Sector."
    
Agencies add: Director General Inter-Services Public Relations 
Brigadier Rashid Qureshi on Friday rejected as "absurd and 
ridiculous" the Indian allegations about the state of bodies of six 
Indian soldiers handed back by Pakistan.
    
Briefing newsmen here Friday afternoon, Brig Rashid said the Indian 
allegations were "a crude attempt to malign Pakistan and its armed 
forces" and they seemed to have the objective of escalating the 
tensions and further vitiate the atmosphere for Pakistani foreign 
minister's visit to New Delhi.
    
"These six Indian soldiers were killed in an encounter with 
Pakistani troops on the Line of Control over three weeks ago while 
they were trying to make an ingress into the Pakistan territory."
    
These bodies, he said, were left behind when the Indians retreated 
after their attack was repulsed.
    
"The bodies lay in an inaccessible area from which the recovery was 
extremely hazardous.
    
"As a gesture of goodwill and at great peril to their own safety, 
Pakistan Army recovered these bodies and handed them over to the 
Indians on June 9 with full military honours.
    
"No army would mutilate bodies and then return them to an enemy as 
wily as the Indians who wrap all their failures in propaganda.
    
"However, this time they seem to have really outdone themselves and 
instead of appreciating gestures of goodwill, they have made 
baseless and contrived charges."

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990611
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Services sector: Govt undecided on GST
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Bureau Report

ISLAMABAD, June 10: The Minister for Finance and Commerce, Ishaq 
Dar, said here on Thursday that no final decision had been taken to 
impose 15 per cent General Sales Tax (GST) on the services sector 
as the issue was still to be finalised with the provinces as well 
as the International Monetary Fund (IMF).
    
Speaking at a news conference, held to mark the launching of the 
Economic Survey of Pakistan, the minister said that the government 
was consulting both the IMF and the provinces to decide whether or 
not to impose the GST on the services sector. Dar said he was yet 
to hold a concluding meeting with the visiting five-member IMF 
review mission over the issue.
    
Asked how would the government manage the weak revenue position 
specially in 1999-2000, Dar said that serious efforts were being 
made to broaden the tax base. He said defaulters were being chased 
and money recovered from them. "The government will not tolerate 
revenue slippages in future," the minister declared.
    
Dar agreed with a reporter that the unresolved IPPs issue was 
responsible, to some extent, for failure in winning adequate 
foreign investment during the current financial year. However, he 
pointed out that Wapda was holding a decisive round of talks with 
the representatives of the IPPs to reach an early agreement over 
various issues, including tariff. He said that the current 
situation was not sustainable for Wapda and that was why it was 
seeking some negotiated settlement with the IPPs, including Hubco 
and Kapco.
    
He regretted that the private sector committee could not sort out 
the IPPs issue, delaying its early resolution. However, he was 
confident that the chairman Wapda, who was constantly in touch with 
the representatives of the IPPs, would succeed in resolving the 
issue very soon.
    
The minister agreed with a reporter that the law and order 
situation also contributed to the low foreign investment in 
Pakistan.
    
Responding to a question, the finance minister said that the 
recovery of bank dues would be accelerated during 1999-2000 and 
those who would fail to pay their dues would have to face serious 
penalties.
    
He said that the privatisation process had been slow during the 
current financial year due to various reasons, including 
international economic conditions and unstable stock market 
position. He, however, expressed the hope that the year 1999-2000 
would witness real acceleration in this behalf.
    
Asked whether the government would increase the defence expenditure 
as had been done by India, he said he would not say anything before 
the morning of June 12 when the budget would be announced. He said 
Pakistan would have to carefully take into account its strategic 
interests. "You will only know about the defence allocation on 
Saturday morning," he said.
    
Answering a question, Dar surprised the reporters by saying that 
the allocation for the Public Sector Development Programme (PSDP) 
might be increased in the new budget. "There is every likelihood 
that the government could increase the size of the PSDP, which was 
earlier announced at Rs 116 billion", he added.
  
Dar did not agree with a reporter that there was a problem of 
governance in boosting the agriculture productivity. He said had 
there been no bad weather, Pakistan's cash crops would have been 
very good, thus helping to have a significant GDP growth rate.
    
To a question, he said that rescheduling of Pakistan's debts by the 
Paris Club had helped to retire the domestic debt.
    
He was asked why there was no investment in the construction 
industry which had led to its collapse, Dar admitted that the 
construction industry had collapsed but did not give reasons for 
it.
    
Asked whether the government was increasing the prices of 
agriculture inputs in the budget, the finance minister said, "Let 
us see how the new budget deals with this issue". He also did not 
say anything when asked whether the GST was being extended to the 
sale of agriculture inputs.
    
The minister told a reporter that the government was bringing an 
ambitious housing policy which would greatly boost the construction 
industry. Dar said that half-a-million new housing units would be 
built in the country.
    
To a question, he said that the country's exchange rate was 
realistic which favoured the promotion of exports.

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990611
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Debate on cyclone: Warning came only 24 hours before 
-------------------------------------------------------------------
Bureau Report
ISLAMABAD, June 10: Parliamentary Affairs Minister Mian Yasin 
Wattoo on Thursday refuted the opposition criticism on the 
government's negligence in taking precautionary measures against 
cyclone-2A.
    
The cyclone had changed its course only 24 hours before hitting the 
Sindh coastal areas, Mr Wattoo told National Assembly as PPP 
members raised slogan of "lie, lie.. lie".
    
He said Radio Pakistan had broadcast warning 24 hours before the 
cyclone and the district administration had asked the people of the 
area to move to safer places but they refused.
    
Deputy opposition leader Syed Khurshid Shah winding up the debate 
reiterated the demand of Rs5 billion for the cyclone victims.
    
Syed Naveed Qamar asked the government to write off all the 
agricultural loans instead of rescheduling these, holding a high 
level judicial enquiry and rectify technical flaws in the Left Bank 
Outfall Drainage (LBOD).
    
Wattoo said that on May 17 meteorological experts had reported that 
the cyclone was 1,500 kilometre off the coastal areas of Pakistan 
and moving in north-west direction. On May 18 they had again 
reported that the cyclone had been converted into tropical rain 
storm but moving in the same direction.
    
The first warning came in only 24 hours before the cyclone and it 
was very difficult to evacuate the people in such a short period, 
he added.
    
The administration had tried to evacuate the people but they did 
not respond, he added. Regarding a statement of Sindh Governor 
Moinuddin Haider in which he had admitted negligence on the part of 
the administration, Wattoo said he (governor) had been quoted out 
of context.
    
"Such calamities occur all over the world and even in the United 
States they are hard to cope with", he said.
    
Prime Minister Nawaz Sharif, he added, was taking personal interest 
and had visited the area a number of times.
    
The government had already announced financial assistance of Rs500 
million and was ready to provide more, he added.
    
Wattoo thanked Saudi Arabia, Japan and other countries and donors 
who provided relief assistance to the victims.
    
Punjab had provided Rs50 million relief goods and financial  
assistance; NWFP had also given a similar amount and Balochistan 
Rs10 million, he said.
    
Earlier Khurshid Shah recalled that BBC had reported nine days 
before the cyclone was heading towards the coastal areas of Sindh.
    
He expressed dismay over the amount of Rs100,000 announced by the 
government for every dead. The government had paid Rs200,000 each 
to those who had been killed in an accident in Jhang recently.
    
If a family had lost more than three members in the cyclone the 
government was not paying more than Rs300,000 to that family which 
he said was height of injustice.
    
Syed Naveed Qamar said that the judicial enquiry should be held to 
establish the responsibility of the negligence. Calling upon the 
government to rectify technical faults in LBOD, he said, it flew 
backwards and caused floods in areas far from the coast.
    
He called for declaring certain areas of Hyderabad districts as 
calamity-hit where huge loss had been reported to the rice and 
sugarcane crops and to set up an early warning system.

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990610
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Pressler Law repealed: US Senate suspends sanctions for 5 years
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Shaheen Sehbai
WASHINGTON, June 9: The US Senate on Tuesday night repealed the 
infamous Pressler Amendment and suspended all economic sanctions 
imposed on Pakistan and India for five years.
    
The amendment to repeal Pressler and suspend the sanctions was 
moved by Senators Sam Brownback and Pat Roberts, who attached it to 
the Defence Authorisation Bill passed by the Senate on late Tuesday 
night.
    
Congressional experts and senior Pakistani diplomats said the 
passage of the amendment in the Senate meant that it will also 
clear the lower House and would not be vetoed by the President 
under his line-item veto authority.
    
A "Sense of the Senate" resolution was also adopted by the Senate 
which requires that waiver should not be invoked for sales of 
defence equipment to any party that initiates or supports 
activities that jeopardize peace and security in Jammu and Kashmir.
    
Experts said this sense of the senate resolution was not binding 
nor was a part of the bill but was more of a political statement as 
it touches the sensitive issue of Kashmir, especially in view of 
the current fighting in Kargil.
    
Senator Brownback, who had pulled his amendment off the table about 
10 days back protesting against the repressive measures against the 
press in Pakistan, moved it on Tuesday night after reaching a 
compromise with the Clinton Administration.
    
An announcement by Senator Brownback's office said his amendment 
"suspends economic sanctions on India and Pakistan, repeals the 
Pressler Amendment and gives President Clinton a national security 
waiver authority for sale of defence articles, defence services, 
foreign military financing and dual use technologies which are not 
primarily used for missile development or nuclear weapons 
programmes".
    
Ambassador Riaz Khokhar of Pakistan welcomed the passage of the 
Brownback amendment and told Dawn on Wednesday that it was a step 
forward to remove the coercive atmosphere.
    
The State Department had opposed the suspension of sanctions when 
Senator Brownback had moved his amendment but last night's 
compromise was to remove all economic sanctions but provide the 
authority to the President to remove defence related sanctions.
    
A senior State Department official welcoming the move told Dawn: 
"In general we welcome congressional attention to need for 
legislative action since the Brownback waiver authority will expire 
this fall. We would have preferred an approach that would give the 
President authority to waive these sanctions when appropriate 
progress has been made as was done last year. We look forward to 
working with Congress to pursue the common objectives in South 
Asia. We also look forward for further action on the part of India 
and Pakistan to pursue the non-proliferation goals which will 
enable us to remove the remaining sanctions."
    
Asked how was the opposition to the amendment resolved, the State 
Department official said: "We were not opposed to the amendment as 
a whole. We made it clear that we liked to see a waiver authority 
as opposed to suspension. We certainly would like to see some 
action because the authority to waive the sanction expires in the 
end of September."
    
The latest amendment, according to the announcement by Senator 
Brownback's office, is called the India-Pakistan Sanctions Relief 
Amendment and will:
    
* suspend for five years all economic sanctions imposed on India 
and Pakistan by the Glenn Amendment. After the five-year period of 
suspension, it gives the President a national interest waiver to 
renew the suspension of these sanctions.
    
* Allow economic assistance (though this is limited to support 
NGOs, democracy or establishment of democratic institutions and 
humanitarian assistance); restore IMET, the military exchange 
programme; allow peace-keeping operations assistance; restore 
credit, credit guarantees or other financial assistance, loans and 
financial or technical assistance by IFIs; allow US banks to make 
loans or provide credits to India and Pakistan governments; and 
restore EXIM guarantees, insurance and/or credits, as well as 
participation in the extension of credit in support of US exports 
to India and Pakistan.
    
The announcement said: "The bill provides the President with a 
national security waiver for sales of defence articles, defence 
services, foreign military financing and dual use of technologies 
which are not primarily used for missile development or nuclear 
weapons programmes.
    
It requires congressional review procedures as these sales are 
subject to review by Congress.
    
Under the bill the President must submit a report with 60 days of 
enactment listing those Indian and Pakistani entities whose 
activities contribute directly to missile programmes or weapons of 
mass destruction programmes.
    
Economic support fund assistance under the bill is restricted to 
assistance that supports the activities of NGOs, assistance that 
supports democracy or the establishment of democratic institutions 
and humanitarian assistance.

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990609
-------------------------------------------------------------------
NWFP anticipates Rs36.8bn revenue
-------------------------------------------------------------------
By Intikhab Amir   
PESHAWAR, June 8: The NWFP government is anticipating around Rs 
36.5 bn total revenue receipts for the 1999-2000 financial year 
with over 90 per cent of the amount coming from Islamabad under 
different counts, official sources said.
    
“Though final projections on account of NWFP’s share in the federal 
taxes for the next fiscal year has not yet been intimated to the 
provincial government by Islamabad, the transfers to the province 
are likely to be projected at Rs 16.50 bn to Rs 17 bn amount “ said 
the official sources.
    
Sources said that as the CBR was set to be given a target of Rs 350 
bn revenue collections for the 1999-2000 fiscal year, NWFP’s share 
would originally stand at around Rs 17.77 bn, as per the 1996 NFC 
award.
    
In accordance with the 1996 NFC, said the sources, NWFP was 
entitled to 13.54 per cent of total share from the federal taxes. 
As per the NFC, provinces receive 37.5 per cent of the total 
federal taxes, whereas the remaining 62.5 per cent goes to the 
federal government.
    
Apart from federal taxes, according to sources, the 1996 National 
Finance Commission award entitles NWFP to get special grant 
(subvention) of Rs 4078 m in the 1999-2000 financial year, 11 per 
cent over and above the current fiscal year’s allocation of Rs 3674 
m.
    
Receiving a sum of Rs 16.50 bn to 17 bn under the head of federal 
taxes share, another amount of Rs 4.078 bn on account of subvention 
besides laying claim to Rs 11.624 bn on account of net profits 
share, NWFP’s total revenue receipts would constitute over 90 per 
cent financial disbursements from Islamabad for the 1999-2000 
financial year.
    
The NWFP’s current fiscal year’s total current revenue receipts of 
Rs 33.004 bn involved external resources of Rs 30.158 bn which made 
91.4 per cent of the total receipts.

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990609
-------------------------------------------------------------------
Govt acted according to Constitution, SC told
-------------------------------------------------------------------
KARACHI, June 8: Attorney General of Pakistan Chaudhry Mohammed 
Farooq on Tuesday completed his arguments before a seven-member 
bench of the Supreme Court of Pakistan in an appeal filed by the 

State against the judgment of the full bench of Lahore High Court 
in Foreign Currency Accounts case.
    
The bench comprised Chief Justice Ajmal Mian, Justice Saeed-uz-
Zaman Siddiqui, Justice Irshad Hasan Khan, Justice Raja Afrasiab 
Khan, Justice Mohammed Bashir Jehangiri, Justice Nasir Aslam Zahid 
and Justice Munawwar Ahmed Mirza.
    
Attorney General for Pakistan (AGP), referring to restrictions 
imposed on foreign currency accounts, said that according to sub-
section 2 of Article 24 of the Constitution of Pakistan even lended 
property could be acquired for public purpose.
    
The AGP also referred to Temporary Restriction Act of 1998 (subject 
matter of appeal) and said that extra-ordinary concessions were 
given to the foreign currency account holders. He said that only 
transfers and withdrawal in foreign currency were restricted.
    
Justice Irshad Hasan Khan, correcting the AGP, said only 
restrictions of regulatory nature were placed for a temporary 
period. While Justice Nasir Aslam Zahid inquired if it would not be 
violation of Article 24 fixing rate of conversion much below as 
compared to that in the open market.
    
In reply to another query by the bench, he said government could 
not pay the account holders in foreign currency but it could pay in 
Pakistan currency.
    
When asked about the payment to foreign currency bond holders, the 
AGP sounded optimistic and said that economy and foreign reserves 
were taking off and hence decisions favourable to foreign currency 
accounts and bond holder were likely.
    
The AGP was unable to reply a number of questions posed by the 
bench about volume of remittances from Non-Resident Pakistanis and 
also the volume of interest given to foreign currency bond holders.
    
Justice Saeed-uz-Zaman Siddiqui at this stage observed that the 
government must consider payment in terms of foreign currency to 
Overseas Pakistanis as the “credibility has to be established in 
the same quarter”.
    
Justice Irshad Hasan Khan pointed out at this juncture that the 
government had pledged not to interfere with foreign currency 
accounts and it was said that even Parliament would not interfere 
but in fact the assurances faded just by an amendment, the bench 
observed.
    
The AGP in reply to a question of Justice Nasir Aslam Zahid, 
admitted that remittances from overseas Pakistanis had registered a 
downward trend.
    
The AGP was perturbed when Justice Bashir Jehangiri observed that 
people were pressurized and coerced to transfer their accounts.
    
“There had been observations in different circles regarding 
institutions loosing public trust, respect and confidence,” 
observed Chaudhry Mohammed Farooq.
    
After some more queries, the bench advanced some suggestions topped 
by an observation by the Chief Justice of Pakistan Justice Ajmal 
Mian. “Our anxiety is that the credibility of the government is 
restored as it will be in the national interest,” observed CJ.
    
The bench then suggested some measures and asked the AGP to seek 
instructions from the government on lines as spelled out by the 
members of the bench during today’s proceedings.
    
Later, the bench also heard Advocate Salman Akram Raja, counsel for 
28 respondents. He hit at the Circular 23 issued by the State Bank 
of Pakistan to all commercial banks in the country regarding 
restrictions placed by the government on foreign currency deposits.
    
He submitted that the SBP was not entitled to issue such a 
directive and it was “in all a colourable exercise of power to 
deprive respondent of their property in violation of section 25 and 
41 of Banking Companies Ordinance, 1962.
    
The bench later adjourned further hearing till Wednesday when 
counsel for other respondents will make submission against the 
appeal referred by the state. APP


=================================================================== 
 BUSINESS & ECONOMY
990611
-------------------------------------------------------------------
Shahbaz invites US cos to invest in Punjab
-------------------------------------------------------------------
Reporter
LAHORE, June 10: Chief Minister Shahbaz Sharif on Thursday invited 
foreign investors to explore the potential for investment in the 
Punjab.
    
Speaking at a luncheon hosted by the American Business Council 
(ABC), he said the Punjab boasted of a burgeoning middle class, a 
pool of technically qualified personnel and an edge in the labour 
cost. The American companies, therefore, could explore investment 
opportunities in priority areas, specially agro-based industries, 
value-added textile, information technology and light engineering 
industries.
    
He admitted that the task of attracting foreign investments in the 
prevalent global economic situation is quite a difficult job, 
specially when Pakistan has to compete with other Asian states in 
this sector. However, he was hopeful Pakistan will be able to woo 
foreign investment flows.
    
Sharif admitted that the government's dispute with independent 
power producers has wounded investors confidence, saying 'we will 
honour sovereign commitments, but within our commercial and legal 
framework'.
    
He said it is important to save Wapda from financial collapse. 'If 
Wapda sinks, the whole thing will evaporate.' He said it will take 
time to restore the investors confidence. 'However, we'll be able 
to do it with your cooperation.'
    
Sharif said consistent and long-term policies are essential to 
attract foreign investors. He said the government is devising the 
policies with this end in sight.
    
He agreed with ABC president Kamran Mirza that smuggling needs to 
be weeded out to prevent further harm to the local industry as well 
as trade. He said the government is fully aware of this fact and is 
taking effective measures to eliminate the problem.
    
He conceded that the government has not been able to widen the tax 
net since its coming to power over two years ago. However, he said, 
steps are being taken in this direction. He said imposition of GST 
will help to document the economy and generate resources.
    
He assured the ABC the government has taken measures to speed up 
the pace of privatization of the public sector and deregulate the 
economy. It was the first government of Prime Minister Nawaz Sharif 
which provided steam to privatization in 1991.
    
Sharif spoke hard against encroachers, saying it is unfair to the 
country and its people to allow encroachments to come up. He said 
the gas station demolished in the city were illegally built. He, 
however, agreed with an executive of an American oil company that a 
reasonable time must be given to the company to remove their 
removable assets and shift the facility to some other place before 
taking such a step. However, he warned, this time should not be 
used to move courts and take stay orders to perpetuate the 
encroachments. 
   
He said his government is making concerted efforts to promote 
information technology in the province. He referred towards the 
recent agreements with American firms and said 10 institutions will 
have IT faculties by the end of this year.
    
Earlier, Mirza urged the government in his welcome address to 
eliminate the restrictive tax policies and coercion by tax 
authorities and enforce intellectual property rights laws.

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990612
-------------------------------------------------------------------
Move to set tax revenue target at Rs450b
-------------------------------------------------------------------
Ikram Hoti
ISLAMABAD, June 11: An ambitious revenues target of Rs 450 billion 
is being submitted to the federal cabinet for incorporation in the 
budget 1999-2000.
    
Sources in the ministry of finance revealed here on Friday that the 
Central Board of Revenue had been directed by the finance minister, 
Ishaq Dar three days ago to submit a second spread sheet of overall 
tax collection estimates for the next fiscal year, with breakdowns 
of Income Tax, Sales Tax, Customs Duty and Central Excise Duty, 
accordingly.
    
The first flow chart of the revenues estimates was based on a 
target of Rs 415 billion for 1999-2000, which was the basis for the 
breakdowns for the four tax heads which were as follows: IT Rs 135 
billion; ST Rs 125 billion; Customs Duty Rs 85 billion: and CED Rs 
70 billion.
    
Officials claiming to have access to the final figures now to be 
submitted to the federal cabinet meeting on Saturday say that the 
new target is Rs 450 billion, and an adjustment of additional Rs 35 
billion was completed on Friday, which stipulates as follows: IT Rs 
145 billion; ST Rs 135 billion; Customs Duty Rs 93 billion; and CED 
Rs 77 billion.
    
The CBR was initially, at the time of setting the target of tax 
collection for 1999-2000, directed by the ministry of finance that 
it should incorporate a 12 per cent growth on the actual 
collectible for 1998-99 (at revised estimate of Rs 310 billion) 
into the overall estimates for the next fiscal year.
    
For the new measures to be inducted through the IT and ST 
departments, the ministry had directed CBR to project an additional 
sum of about Rs 80 billion be made part of the next year's 
estimates.
    
However, under the freshly projected Rs 450 billion overall target 
for 1999-2000, the additional sum (over and above the growth) would 
now be about Rs 115 billion. Measures additional to those taken in 
1998-99, to realize the growth plus the additional projection in 
1999-2000, would all pertain to the Sales Tax and Income Tax heads, 
said the sources.
    
They added that the 1998-99 revised estimates of Income Tax and 
Sales at Rs 110 billion and Rs 75 billion, respectively, would be 
raised to realize the growth related and additional sums of Rs 35 
billion and Rs 80 billion respectively.
    
Under the first flow chart of tax heads, the IT department was to 
collect additionally Rs 25 billion and ST Rs 50 billion.
    
When asked why was the ST department being tested beyond its 
capacity, sources said the government has room for raising the 
extraordinary amount to be collected only under the ST head, as the 
VAT mode implementation under this head is the only way to do so. 
There were no such prospects to be seen in the IT head for such a 
raise in tax money in 1999-2000, they added.
    
Tough measures to be adopted for realizing these collection figures 
include the VAT mode related registration in all trade and 
manufacturing/import sectors, coverage of at least 90 per cent to 
the retail sector in collection of ST and the middle tiers between 
the producers cum suppliers down to the wholesale.
    
Apart from these, incentives would also be extended to the ST-
payees in all the trade and manufacture sectors, for achieving 
guarantees of fuller coverage. These measures would also include 
speedy disposal of appeals against tax claims and maximum 
recoveries of arrears, the defaulters listed by the department to 
be dealt with severely.

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990612
-------------------------------------------------------------------
Pakistan can earn $100m from exports to Iraq: EPB chief
-------------------------------------------------------------------
Reporter
KARACHI, June 11: Pakistan can earn over $100 million from export 
of essential food items like rice, sugar, cooking oil and 
pharmaceuticals to Iraq under UN 'oil-for-food programme'.
    
This was stated by Wajid Jawad, Minister of State and Chairman 
Export Promotion Bureau (EPB), while briefing newsmen on Friday on 
his return from a three-day visit to Iraq.
    
Chairman EPB who visited Iraq to explore and renew economic and 
trade relations met Deputy Prime Minister Tariq Aziz and eight 
other ministers.
    
Wajid Jawad said that all the Iraqi dignitaries he met expressed 
their keen desire for strengthening economic and trade relations 
between the two countries.
    
He further said there is a great demand for food items, 
pharmaceuticals, agriculture machinery and equipment and Pakistan 
is in a position to meet these requirements.
    
However, he said EPB will have to introduce such exporters who 
could fulfil the commitments 
and meet the contractual obligations which would be paid by UN from 
$5.2 billion oil income of Iraq.
    
He said that his visit was timely and only a week earlier Indian 
oil minister with a large trade delegation paid a visit to Iraq for 
exploring trade and benefiting from the current Iraqi situation.
    
The Trade Minister, Wajid Jawad said has informed that school 
furniture and stationary was in great demand and also all types of 
detergents were urgently needed for domestic use.
    
However, EPB chairman said that Iraq has very strict laws for 
pharmaceuticals and our exporters should take all the care for 
meeting their standards and quality because in the past there had 
been some complaints.
    
He said Pakistan is in a position to export around 0.1 million tons 
of each sugar and rice worth around $50 million and similarly $20 
million worth of pharmaceuticals. Other commodities he said could 
also fetch substantial amount of foreign exchange.
    
He further disclosed that there is big Iraqi plan for the 
rehabilitation of its industry, water resources, sewerage and 
pipeline and Pakistan could assist by providing skilled manpower in 
this regard.

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990610
-------------------------------------------------------------------
State Bank enhances penalties
-------------------------------------------------------------------
Reporter    
KARACHI, June 9: The State Bank of Pakistan (SBP) on Wednesday 
notified a new scale of penalties against specific irregularities 
committed by banks and other financial institutions.
    
The move has been made after SBP observed that violations of rules 
were being committed by several banks despite repeated warnings.
    
"This situation is not acceptable from the regulatory point of 
view," the circular said. It said new scale of penalties was put in 
place to reduce "inefficiencies in banking institutions" to the 
minimum.
    
The circular said this was done also to ensure that the banking 
system maintains "integrity and financial soundness and the 
observations made or irregularities pointed out by the SBP are 
taken seriously."
    
It said the new penalties laid out in the circular would be in 
addition to "any other action that the SBP may institute against 
any functionary of a bank/financial institution" under the law.
    
The circular says the banks violating cash reserve requirement or 
statutory liquidity requirement would have to pay a penalty of Rs 
69 per Rs 100,000 or part thereof per day. The penalty would be 
imposed on the amount by which their balance with SBP falls short 
of the fixed minimum.
    
If the shortfall goes on to the subsequent week or thereafter "the 
penalty shall be increased to Rs 86 per Rs 100,000 or part thereof 
per day." The circular says a penalty of Rs 86 per Rs 100,000 or 
part thereof per day would also be imposed on the amount by which 
the liquid assets of banks fall short of the fixed minimum.
    
On violation of the SBP instructions regarding operation of deposit 
accounts and payment of return there would be a fine of Rs 20,000 
per case and or Rs 1000 per day for the period of the irregularity.

The circular says in addition to this fine the SBP may also 
initiate disciplinary action against the officials responsible for 
the lapse.
    
Violation of the instructions regarding operation of accounts would 
lead to a levy of Rs 20,000 per case and or Rs 1000 per day for the 
period of the irregularity besides disciplinary action against the 
officials.
    
Violation of security requirement for the grant of loans and 
advances would also attract a penalty of Rs 20,000 or Rs 1000 per 
day for the period of irregularity and/ or action against 
officials.
    
The circular says irregularities regarding grant of financing 
facilities would also be liable for a penalty of Rs 20,000 or Rs 
1000 per day for the period of irregularity and/or action against 
officials. The same would apply to cases of violation of other 
prudential regulations and provisions of Banking Companies 
Ordinance/Banks Nationalization Act and State Bank of Pakistan Act.
    
Delayed submission of returns and concealment or misreporting of 
data/information to SBP would attract a one-time penalty of Rs 
20,000 per case or Rs 1000 per day for the period of irregularity 
and/or action against officials. The same would apply to cases of 
violation of SBP instructions with regard to locating/opening and 
shifting of branches of banks and financial institutions. The 
circular says violation of regulations regarding grant of financing 
under export finance and LMM schemes would be liable to penalties 
as already notified by SBP from time to time.
    
It says excess lending to autonomous bodies also be subject to the 
already notified rates of penalties. The circular says if a bank is 
found to be repeating the same irregularity the following 
year/(years) it would be subjected to a 25 per cent surcharge 
compounded on succeeding year as compared to the year it was first 
pointed out. This would not apply to violations in case of cash 
reserves requirement and statutory liquidity requirement, however.
    
The circular addressed to all banks and financial institutions 
advises them to note that new scale of penalties and to circulate 
the same among the managers of all their branches.
    
It says that fines or penalties once levied due to mistake in 
reporting or any other lapse on the part of the banks will not be 
condoned or refunded. "Banks are therefore urged upon in their own 
interest and in the interest of the banking system as a whole to 
ensure compliance with Prudential Regulations and other directives 
of of the SBP in letter and spirit."

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990608
-------------------------------------------------------------------
Govt urged to contain budget deficit
-------------------------------------------------------------------
By Ihtashamul Haque    
ISLAMABAD, June 7: The International Monetary Fund (IMF) has urged 
the government to cut its non-development expenditure in order to 
contain budget deficit.
    
Informed sources told Dawn here on Monday that the visiting five-
member IMF review mission headed by Ms Sena Eken has conveyed to 
the Pakistani authorities that the expenditure side of the 
government was still "very high" due to which there was no 
possibility of any reduction in the budget deficit.
    
The mission believed that the consolidated budget deficit could not 
decline from 5.5 per cent of GDP in 1997-98 to 4.3 per cent of GDP 
in 1998-99.
    
Pakistan was told that it was "extremely difficult" to achieve 3.3 
per cent GDP budget deficit target during 1999-2000 and that the 
government did not seem to be serious to address what it termed 
this "very crucial area" of the Pakistani economy.
    
The two sides were expected to hold their last round of talks on 
Tuesday to conclude any broad understanding over various issues. 
The mission will then leave for Washington to give its findings 
about the review of the Pakistani economy. 
   
Generally it was said that despite having reservations on various 
issues the mission will recommend to its headquarters the 
disbursement of next tranche of 100 million dollars to Pakistan by 
early July.
    
Sources said that issues related to extending 15 per cent General 
Sales Tax (GST) to services sector were still to be fully worked 
out between the government and the IMF.
    
"There will be a full session on Tuesday between the IMF review 
mission and the government team led by Minister for Finance Ishaq 
Dar", said an official.
    
When contacted he said that provinces have strong reservations over 
the levy of GST on services sector, although the government has in 
principle agreed with the IMF to impose this tax from July 1.
    
He confirmed that five sectors have been identified and agreed upon 
with the IMF which include telephone, fax and internet; restaurants 
and related services, trade related services; customs agents and 
professional services.
    
Sources said that the IMF review mission seriously doubted the 
capacity of the CBR to collect Rs 350 billion proposed revenue 
target for 1999-2000. The mission called for establishing a Revenue 
Division in order to increase revenue collection.
    
The NEC approved Rs 116 billion Public Sector Development Programme 
(PSDP) was also discussed between the two sides, with IMF review 
mission asking the government to ensure that there was no cut on 
this budget and that the social sectors must be protected from any 
cut.
    
Sources said that the government has also conveyed to the IMF 
mission that Pakistan has no plan to cut its defence budget. " Dar 
has told Ms Sena Eken that the country's territorial integrity 
cannot be compromised, therefore the government would not reduce 
the defence budget during 1999-2000", an official said.

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990611
-------------------------------------------------------------------
Falling interest rates make TFCs attractive option
-------------------------------------------------------------------
Haris Anwar
KARACHI, June 10: Falling interest rates in the economy has made 
Term Finance Certificate (TFC) an attractive option for companies 
to raise long-term financing.
    
Recently launched issue of Dewan Sulman Fibres Limited has been 
oversubscribed by Rs 174 million against the public offering of Rs 
200 million.
    
The company has issued TFC of total Rs 700 million of which Rs 500 
million were placed for the institutional investors.
    
The money has been raised for setting up a 25,000 tpa Acrylic 
Staple Fibre and Tow manufacturing plant. Falling yield on the 
government securities coupled with 4 per cent cut in the discount 
rate and 2 per cent in national saving rates has made this issue 
attractive for investors.
    
DSFL TFC carries 19 per cent return on semi-annual basis, with over 
8 per cent spread over six months T-bills. The yield on six-month 
T-bills, which is considered as a benchmark for TFC, has fallen to 
10.74 per cent in the last auction due to lower government 
borrowing.
    
Pak-Libya Holding Company is also floating its Rs 1 billion worth 
of TFC this month with 18 per cent return.
    
The company will raise this money in three tranches spread over 
three years. "Those companies which had put-off their TFC issues 
due to higher interest rates may tap this avenue of financing," 
said a corporate analysts. Sui Southern and Northern gas companies 
had planned TFC issues worth Rs 2 billion last year to raise money 
for their expansion plans, but they had to postpone due to falling 
stock market and higher interest rates. "We are planning to launch 
our TFCs after the budget as the market seems good, but the return 
would not be that much higher", said an official at the Sui 
Southern Gas Company Limited. SSGC and SNGPL will issue TFCs of Rs 
1 billion each. Companies, having good cash-flows, prefer to raise 
long-term financing through TFC issues because banks in Pakistan 
are avoiding long-term financing to the corporate sector.
    
"Another problem is prudential regulations which restrict banks' 
exposure limit. And as a result raising a big amount for a company 
becomes difficult from banking channel," said a corporate analyst.
    
But experts said return on new TFCs would not be much higher as 
offered by Dewan Sulman and Pak-Libya Company. "These TFCs were 
structured when the interest rates were higher. Now the spread on a 
new TFC may not be 4-5 per cent over six-month T-bill," said fixed-
income analyst.

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990610
-------------------------------------------------------------------
Warrants issued against defaulters
-------------------------------------------------------------------
Correspondent
GUJRANWALA, June 9: The warrants of arrest of more than 83 
industrialists and manufacturers were issued by the Punjab Small 
Industries Corporation on Wednesday for not paying their 
outstanding dues since long while the raiding teams were conducting 
raids for the arrest of said defaulters.
    
A spokesman of PSIC told the newsmen that repeated notices and 
reminders have been issued to defaulters for an early payment of 
their outstanding dues but they have failed to do so. Therefore, 
warrants of arrest were issued.
    
He hinted that raiding teams comprising recovery tehsildars have 
been constituted and all the defaulters would be arrested soon 
during special drive launched against them. 

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990609
-------------------------------------------------------------------
No new sales tax notices to traders, assures CBR
-------------------------------------------------------------------
By Our Staff Reporter
    
KARACHI, June 8: The Central Board of Revenue (CBR) has assured the 
traders that no notices for sales tax will be issued and also no 
action will be taken on the notices already issued.
    
This was assured by Chairman, CBR, Mian Iqbal Farid to the 
delegation of Karachi Chamber of Commerce and Industry (KCCI), led 
by its President, Mamnoon Hussain which met in Islamabad on 
Tuesday.
    
According to a KCCI press release, the CBR chief said that the 
status quo will be maintained till the final decision.
    
Trade sources said that various Sales Tax Collectorates had been 
issuing demand notices of highly inflated and exaggerated amounts 
to the traders and importers. They added that at least 28 notices 
had been issued to the importers in Karachi and 4,000 notices were 
intended to be issued.    
Mamnoon pointed out to the CBR chief about the harassment by the 
Sales Tax Collecting authorities in Karachi, on which Mian Iqbal 
Farid assured that there would be no harassment of any kind to 
trade and industry by the tax officials.
    
President KCCI pointed out about the inclusion of the element of 
withholding income tax in the assessable value of the imported 
items on the basis of which the notices had been issued to the 
importers.
    
Mian Iqbal Farid agreed that the CBR would get KCCI legal opinion 
about inclusion of withholding tax in invoice value, verified from 
the ministry of law and on receiving confirmation, he added another 
meeting would be held with chamber’s representatives to take a 
final decision on the issue and to decide other related modalities.
    
KCCI chief argued that according to legal opinion obtained by the 
chamber, the assessable value of imported items should not include 
the element of withholding income tax. He added sales tax was 
chargeable on duty paid value, exclusive of withholding tax.
    
Mamnoon said according to tax law, income tax is charged to capital 
account. It is neither charged to the expenses nor to the profit 
and loss account.
    
He said the problem of collection of the excise duty from the 
travelling agents has been amicably resolved and the CBR has 
ordered for desealing the offices of the travelling agents which 
were earlier sealed by the Excise Department in Karachi.
    
The other members of the delegation were Siraj Kassam Teli, senior 
vice president, KCCI, Raees Ashraf Tarmohammad, Chairman Pakistan 
Commodity Traders Association (PCTA) and Shaikh Gulzar Shafi.

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990609
-------------------------------------------------------------------
Rs2,000 per ton duty levied on cooking oil
-------------------------------------------------------------------
ISLAMABAD, June 8: The Economic Coordination Committee of the 
cabinet on Tuesday levied Regulatory Duty of Rs 2,000 per metric 
ton on the import of palm/soybean oil.
    
The decision was taken at the meeting presided over by finance 
minister Ishaq Dar. The duty on the import is levied to keep the 
revenue pace intact that was feared to decrease following the fall 
in prices of palm and soybean oil in the international market.
    
The ECC directed the ministry of industries and production to 
ensure that the retail price of vegetable ghee does not increase 
beyond Rs 52 per kg in the local market.
    
It also reviewed the prices and availability of essential items in 
the country and noted that the price trend in general indicated 
stability during the week under report. The meeting also reviewed 
the situation of the wheat availability and decided not to allow 
the import of wheat in private sector.
    
The ECC was submitted a report on the mechanism for fixation of 
Import Trade Price (ITP). It was informed that with the 
introduction of new measures the system of ITP fixation has 
improved and was now working smoothly.NNI

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990610
-------------------------------------------------------------------
Russia ready to transfer pharma technology
-------------------------------------------------------------------
Reporter
KARACHI, June 9: There is a big scope for transferring of 
technology from Russia to Pakistan especially in the field of 
pharmaceuticals.
    
This was stated by Yury Materly, Consul General of Russian 
Federation, who visited Karachi Export Processing Zone on Tuesday 
and discussed matters of mutual interest with the chairman of 
Export Processing Zones Authority, Maqsood Ismail.
    
Yury further observed that with cheaper manufacturing base in 
Pakistan a huge demand of pharmaceuticals coming from Russia could 
be easily met.
    
He said that there was good chance of transferring the technology 
of making citric acid in the export processing zones for which abundant
quantity of molasses is available in Pakistan as a raw 
material.
    
Yury Materly, who was accompanied by Consul Dr Vladimir Gribanov, 
visited a garment manufacturing unit in KEPZ.

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990612
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Stocks turn volatile on eve of budget
-------------------------------------------------------------------
Reporter
KARACHI, June 11: Stocks on Friday gave highly erratic movements as 
investors were not inclined to take long positions ahead of Federal 
budget tomorrow, although the blue chip sector performed relatively 
well.
    
Trading activity was highly insipid as was reflected by a sharp 
shrinkage in the traded volume, which fell to two-year low. Even 
the volume leaders, some of which could alone match the total in 
their single-session tally were neglected.
    
'Maintain the status quo until the announcement of the fiscal 
measures by the finance minister appears to be the key-note of the 
pre-budget trading session', said an analyst adding 'there were 
whispering not rumours about some incentives to some leading 
sectors but failed to assume the role of pre-budget stimulants'.
    
The KSE 100-share index early was up by eight points, what the 
dealers called, the extension of the overnight run-up, but the 
subsequent portfolio adjustment brought it down. The close was, 
however, modestly higher at 1,123.98 as compared 1,121.97 a day 
earlier, showing a fresh modest increase of 2.01 points.
    
Unlike previous years, there were no pre-budget rumours in the 
rings. Even those who are known for spreading ones were silent and 
as a result there were no violent price fluctuation or panic buying 
or selling on any of the counters.
    
'The budget could be investment-friendly as the government will try 
to maintain a status quo at least for the near-term in a given 
situation fraught with high risks including fears of war with 
India', said an analyst.
    
However, a formidable section of leading investors was buying 
massively leading shares in the energy, chemical and communication 
sectors anticipating some more incentives, he added.
    
'Massive covering purchase in the PTCL for the second day in a row 
that the market perceptions about some incentives might not be 
speculative but rather is based on some positive leaks from the 
highups', said a member of the KSE.
    
Similarly, the tariff row with the Independent Power Producers 
(IPPs), might be no where close to settlement as the contenders on 
the both sides have taken rigid positions, there is a loud 
whispering that the issue will be settled very soon, he added.
    
Unlike previous sessions, instances of some speculative buying were 
not lacking as leading foreign funds, local institutional traders 
and brokerage houses were busy in moping up operations on selected 
counters.
    
The broader market, however, was relatively weak in the absence of 
strong support rather than large selling from any quarter. Minus 
signs therefore, again dominated the list, although most of the 
declines were fractional.
    
Some of the leading shares, notably Bolan Bank, Century Insurance, 
New Jubilee Insurance, Nafees Cotton, Pak Datcom, Engro Chemical 
and] Glaxo-Welcome Pak
were exceptions, which came in for active profit-taking at the 
overnight higher levels and fell by Rs 1.25 to 3.00.
    
Nestle Milkpak, which has been dormant for the last couple of 
session came in for active support and was marked up by Rs 29.00 to 
Rs 160.00 with only 100 shares changing hands. 
   
Lever Brothers followed it rising by Rs24.00.
    
Other good gainers were led by Shell Pakistan, Shafi Chemical, 
Dawood Cotton and Ghandhara, which posted gains ranging from one 
rupee to Rs2.50.
    
Trading volume fell further to 58m shares as investors played safe 
ahead of the budget as compared to 96m shares a day earlier. 
   
Losers maintained a lead over the gainers at 67 to 35, with 
33 shares holding on to the last levels.
    
PTCL again led the list of most actives, off 15 paisa at Rs 21.15 
on 19m shares followed by Hub-Power, easy five paisa at Rs 15.15 on 
11m shares, ICI Pakistan, up five paisa at Rs8.70 on 9m shares, 
PSO, off 55 paisa at Rs100.90 on 6m shares and KESC, lower 45 paisa 
at Rs 9.80 on 3m shares.
    
Other actively traded shares were led by Dhan Fibre, firm by 10 
paisa on 2.321m shares, Dewan Salman, up 25 paisa on 1.209m shares, 
Telecard, lower 10 paisa on 1.991m shares, Engro Chemical, off 
Rs1.30 on 1.321m shares, PIAC, easy 20 paisa on 0.528m shares and 
Fauji Fertiliser, lower 10 paisa on 0.537m shares.
    
DEFAULTING COMPANIES: Shares of four companies came in for stray 
buying under the lead of Premium Textiles, which was traded at the 
last level on 2,000 shares. Suzuki Motorcycle was, however, an 
exception, which rose by 15 paisa on 1,000 shares. Mian Textiles 
and Asia Board were held unchanged on 500 shares each.

Back to the top
=================================================================== 
 EDITORIALS & FEATURES
990606
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Bullies are cowards  2                  
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Ardeshir Cowasjee   
ON the morning of November 13, 1994, whilst Nawaz Sharif was 
enjoying his breakfast of siri-paya, nan, nihari and badami-sharbat 
he was interrupted by a telephone call. His father's chauffeur, 
highly agitated, informed him that Mian Mohammed Sharif's office at 
Empress Road had been surrounded and that police in and out of 
uniform were conducting a raid.
    
Nawaz Sharif managed to get through to his father and was told that 
the invaders wished to take him away for questioning. "Hang on", 
said Nawaz, "tell them I am on my way".
    
The raiders were impatient. When Mian Mohammed Sharif asked them to 
produce their warrant, the answer was, 'here's your warrant'  and 
he was hauled out of his chair, and driven to Lahore airport. He 
was flown to Islamabad in the Chief Minister's plane and taken to 
an FIA safe house. He was not allowed to make a phone call to his 
lawyer or son. The old man of 75 was kept without water or food 
until 1600 hours that afternoon.
    
Nawaz Sharif telephoned me from Islamabad the next day, asking 
whether I had heard about the brutal manner in which his old father 
had been mauled, dragged out of his office and abducted. I had, and 
commiserated with him, but refrained from remarking that had he 
behaved with restraint whilst in power he may not then have been 
reaping what he had sown. I suggested that as a son, who also 
happened to be the leader of the opposition, he get on to home 
minister Naseerullah Babar and ask why what had happened had 
happened, and demand to be allowed to meet his father. The 
conversation that followed says a lot about the mindset of the man:
    
"Main jaon?" he asked. "To kya 'main jaon?'," I replied, "Hamara 
baap hai, ke tumhara baap hai?".
    
He was unmoved. I did not understand politics, I was told. He would 
send Sartaj Aziz to meet Babar. The nearest Sartaj was able to get 
to Babar was to the Interior Secretary who informed him that 
Babar's response to Nawaz's request was to go to court.
    
Five years have elapsed. Nawaz Sharif has managed to once again sit 
atop the greasy pole as prime minister. Has anything changed; have 
we moved with time? Najam Sethi, editor of The Friday Times, talked 
to the BBC about the corruption and defaults of the Sharif family. 
Nawaz Sharif was angry. Sethi had to be taught a lesson. Nawaz's 
henchmen, Mushahid Hussain, Saifur Rahman, and Chaudhry Farooq were 
activated, lame excuses were found. Sethi was accused of being a 
RAW agent and the government's dirty-tricks machinery went into 
gear. The rest is history. However, the government failed to 
involve the army, and the AG had to then turn to the civil courts 
and evoke the Pakistan Penal Code, charging Sethi under the 
following sections having programmed a ruling party MNA to file an 
FIR:
    
Section 123-A of the PPC  (brought on the book in 1950)
    
"(1) Whoever, within or without Pakistan, with intent to influence, 
or knowing it to be likely that he will influence, any person or 
the whole or any section of the public, in a manner likely to be 
prejudicial to the safety of Pakistan, or to endanger the 
sovereignty of Pakistan in respect of all or any of the territories 
lying within its borders, shall by words, spoken or written or by 
signs or visible representation, condemn the creation of Pakistan 
by virtue of the partition of India which was effected on the 
fifteenth day of August 1947, or advocate the curtailment or 
abolition of the sovereignty of Pakistan in respect of all or any 
of the territories lying within its borders, whether by 
amalgamation with the territories of neighbouring States or 
otherwise, shall be punished with rigorous imprisonment which may 
extend to ten years, and shall also be liable to fine. (2) 
Notwithstanding anything contained in any other law for the time 
being in force, when any person is proceeded against under this 
section, it shall be lawful for any Court before which he may be 
produced in the course of the investigation or trial, to make such 
order as it may think fit in respect of his movements, of his 
association or communication with other persons, and of his 
activities in regard to dissemination of news, propagation of 
opinions, until such time as the case is finally decided. (3) Any 
Court which is a Court of appeal or of revision in relation to the 
Court mentioned in subsection (2) may also make an order under that 
subsection."
    
Section 124-A of the PPC:
    
"Whoever by words, either spoken or written, or by signs, or by 
visible representation, or otherwise, brings or attempts to bring 
into hatred or contempt, or excites or attempts to excite 
disaffection towards the Central or Provincial government 
established by law shall be punished with imprisonment for life or 
any shorter term to which fine may be added, or with imprisonment 
which may extend to three years, to which fine may be added, or 
with fine."
    
Section 153-A of the PPC:
    
"Whoever - (a) by words, either spoken or written, or by signs, or 
by visible representation or otherwise, promotes or incites, or 
attempts to promote or incite, on grounds of religion, race, place 
of birth, residence, language, caste or community or any other 
ground whatsoever, disharmony or feelings of enmity, hatred or ill-
will between different religious, racial, language or regional 
groups or castes or communities; or (b) organizes, or incites any 
other person to organise any exercise, movement, drill or other 
similar activity intending that the participants in any such 
activity shall use or be trained to use criminal force or violence 
or knowing it to be likely that the participants in any such 
activity shall use or be trained to use criminal force or violence 
or knowing it to be likely that the participants in any such 
activity will use or be trained to use criminal force or violence, 
or participates or incites any other person to participate, in any 
such activity intending to use or be trained to use criminal force 
or violence against any religious, racial, language or regional 
group or caste or community or any group of persons identifiable as 
such on any ground whatsoever and any such activity for any reason 
whatsoever causes or is likely to cause fear or alarm or a feeling 
of insecurity amongst members of such religious, racial, language 
or regional group or caste or community, shall be punished with 
imprisonment of a term which may extend to five years, and with 
fine."
    
Read with Section 13 of the Prevention of Anti-National Activities 
Act of 1974 :
    
"Punishment for anti-national activities. (1) Whoever : (a) takes 
part in or commits; or (b) advocates or abets, or attempts to 
advocate or abet, the commission of any anti-national activity 
shall be punishable with imprisonment for a term which may extend 
to seven years, and shall also be liable to fine. (2) Whoever, in 
any way, assists any anti-national activity of any association 
declared anti-national under section 3, shall be punishable with 
imprisonment for a term which may extend to five years, and shall 
also be liable to fine."
    
How unprotected and defenceless we feel. Are these laws on our book 
to protect the life and liberty of the country's citizens, or to 
'fix' them?
    
The tide turned when Justice Mamoon Kazi of the Supreme Court on 
May 31 made noises to the effect that he would order Sethi's 
release. It rose higher the next day when Justice Arif, the second 
judge of the bench of three followed suit, and on June 2 the AG 
appeared bearing news that the government had withdrawn all charges 
and decided to release Sethi.
    
Who accepts responsibility for depriving Sethi of his liberty for 
25 days?
    
Questions to the Supreme Court:
    
Empowered as it is, could the Court, acting through its Chief 
Justice or any other judge, not have taken suo motu action as soon 
as the Lahore High Court had handed down its order of May 12 and 
sent for the Attorney General and asked him to ascertain from the 
government how and why it was that Sethi was dragged out of his bed 
in the middle of the night, battered, abducted by police in uniform 
accompanied by plainclothes men, and was being held incommunicado 
(a fact not denied by the government)?
    
Could the Supreme Court, the highest arbiter of justice, and 
particularly responsible for the liberty of the people of Pakistan, 
not have ordered Sethi's release unless by dawn the next day the 

Attorney-General had fully satisfied it of the necessity of 
arresting and holding Sethi in the manner in which he had been 
arrested and held?
    
It is hoped that those empowered to do justice who are responsible 
for protecting the life and liberty of the people of Pakistan are 
aware that Hussain Haqqani has been similarly framed, abducted and 
held in police custody, and will now act as they should act.

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990611
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The great divide 
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Ayaz Amir
SETTING aside the threat of war, it is instructive and not a little 
inspiring to consider the courage and skill of the fighters who are 
challenging the might of the Indian army and air force along the 
cruel heights of Drass and Kargil in Indian-held Kashmir. Risking a 
battle in which the chances of death outweigh those of remaining 
alive requires motivation of a high order. Whatever the Indian side 
may say, these fighters have a better right than most to call 
themselves mujahideen, those who fight in the way of Allah.
    
Whether any or most of these fighters acquired their combat skills 
in Afghanistan is a matter of detail. What is important is that 
their spiritual outlook has been shaped by the Afghan experience 
which they, and a goodly part of the religious and military 
establishment in Pakistan, considers to have been a true jehad. It 
was the spirit of jehad which drove the Soviet army from 
Afghanistan. It is the spirit of jehad which can drive the Indian 
army from Kashmir. The various schools who subscribe to this 
thinking consider it an article of faith that the seeds of the 
break-up of the Soviet Union were sown in Afghanistan. Might not 
the same happen in Kashmir with similar consequences for India?
    
It is true that the CIA and the then head of the agency, William 
Casey  both somewhat removed from anything resembling Islamic 
fervour  had a great deal to do with the success of the Afghan 
jehad. At the height of the fighting the mujahideen were getting 
nearly a billion dollars of covert US assistance every year, 
including the Stinger missiles which so effectively neutralized the 
Soviet advantage in helicopter gunships. But it is also true that 
the Soviet occupation of Afghanistan helped awaken a genuine spirit 
of Islamic revivalism in Afghanistan, across the Arab world and in 
religious seminaries in Pakistan. The CIA was only the means, jehad 
the end, not only in Afghanistan but in other Muslim countries 
defiled by corrupt leaderships.  Afghanistan today may lie in ruins 
and one of the foremost objectives before the CIA may be to contain 
and destroy the very forces of fundamentalist fervour it had helped 
put together and ignite in the first place. But these powerful 
ironies are lost upon the veterans of the Afghan jehad whose 
memories are sustained by their past triumphs and who fervently 
believe that if the same spirit was rekindled the experience of 
Afghanistan could be replicated in Kashmir. If anything, Pakistan's 
nuclear tests have given a fillip to this thinking. The country's 
defence having been made impregnable (a favourite expression), the 
circumstances are right for liberating Kashmir from Indian 
occupation. In the Jang of June 8 General Hamid Gul puts across 
this viewpoint with considerable eloquence.
    
The Afghan war left its deepest imprint upon three sections of 
Pakistani society. Firstly, the religious schools and seminaries 
which have flourished since General Zia-ul-Haq's time. Secondly, 
the religious political parties which make up in fervour what they 
lack in popular support. From both these sources a stream of 
volunteers went forth to fight in Afghanistan. Thirdly, those army 
circles, especially in the ISI, which for logistic and training 
purposes were closely connected with the fighting in Afghanistan. 
It is in these sections of society that the passionate belief is to 
be found that the example of Afghanistan can be reproduced in 
Kashmir.
    
The majority of the people of Pakistan, however, may not subscribe 
to this thinking. For most of them the legacy of the Afghan war 
lives on in the form of drugs, kalashnikovs, refugees and a 
worsening law and order situation. But the government of Mian Nawaz 
Sharif is clueless and the people, by an extension of this 
circumstance, uninvolved in higher decision-making which continues 
to be made in circles where the Afghan war remains an important 
point of reference.
    
With all this as background, now to the Kargil operation. Who can 
tell it may turn out to be a signal success. If it does not lead to 
anything wider  that is, if the Indian army does not launch a 
diversionary or flanking blow elsewhere along the Line of Control  
the boldness and indeed audacity of its planning will have been 
justified. The courage and skill of the fighters ranged against the 
Indian army will not go in vain. But is the Kargil operation just a 
summer furlough or part of a wider strategy? If the latter, how 
long can it be sustained? There is a deafening silence on this 
score.
    
In any event, the real danger is not that the present low-intensity 
fighting in Kashmir will lead to outright war between Pakistan and 
India. On current evidence it probably will not. The real danger 
lies in something altogether different. The spirit of jehad so 
magnificently exemplified by the fighters of Kargil and Drass is at 
odds with the nature of Pakistan's polity, the reality of its power 
structure. Right from the Afghan war till now in Kashmir, 
volunteers for jehad (or whatever else the finicky may call it) 
have come from social classes far removed and indeed alienated from 
this structure. How many people from the intelligentsia or the 
newspaper-reading classes fought in Afghanistan? How many of them 
are fighting in Kashmir? These causes have drawn active (as opposed 
to rhetorical) support from a narrow section of the Pakistani right 
wing.
    
This certainly does not mean that these causes are unjust. How can 
the liberation of Kashmir by force of arms be considered an unjust 
cause? But it does mean that if we are to sustain this policy it 

must become the common property not only of madrassa students, 
great as their contribution is, but of all Pakistanis, including 
those from the affluent classes. Why must only the poor go to 
Kargil? Why not others? Who provides the volunteers for such 
organizations as Lashkar-I-Tayyaba, Harkat-ul-Mujahideen, etc? Is 
mainstream Pakistan represented in them? If not, this represents a 
serious fissure in society, a divide which has affected our polity 
already  by weakening the foundations of democracy and giving free 
rein to social extremism and bigotry  and which can be expected to 
affect it more as time passes.
    
There is another contradiction brought to the fore by the spirit of 
jehad in Kashmir. Can righteous wars be waged by corrupt emperors? 
Let us liberate Kashmir by all means but let us first look within 
ourselves a bit. Blundering leaders have taken the country to 
disaster before. The people of Pakistan deserve better than to be 
led into further disasters by a ruling coterie which does not pay 
taxes, defaults on loans, amasses flats in London and uses power 
for personal enrichment.
    
Let us, therefore, have the sense to decide what we want. If a 
liberation war in Kashmir, so be it. But let us break our begging 
bowl first. Kow-towing to the IMF is not a mark of dignity or a 
sign of preparing for war. When the North Vietnamese went about 
liberating the south they had all too vivid a sense of the hard 
road before them. But convinced of the righteousness of their 
cause, they were undeterred by the consequences and lived to see 
their dream fulfilled. Are we ready for similar sacrifices? Not if 
we look at the grasping ways of our present rulers and indeed of 
the governing classes as a whole. What kind of a war of liberation 
then are we thinking of?

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990612
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Passions and paranoia                           
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Irfan Husain
THE Hindi broadcasters on the Indian electronic media have invented 
a marvellously evocative word for the current occupants of the 
bunkers in Kargil: they are calling them "ghusbaithyas" (literally 
"intruders").
   
But whatever the legal status of these individuals, it is clear the 
Indian authorities are having a lot of trouble evicting them from 
their mountain redoubts. While their exploits might provide some 
solace to Pakistanis still smarting from the hammering their 
cricket team received from the Indians in the recent World Cup 
encounter, the fact is that their continuing presence across the 
Line of Control is raising the stakes in the unending confrontation 
between India and Pakistan.
   
As you read this, our Foreign Minister will be in New Delhi in an 
attempt to defuse the situation. But given the heady rhetoric and 
the sound of sabres rattling in both capitals, it is difficult to 
see what will be achieved through these talks. Basically, Pakistan 
is saying that we are only providing the fighters in Kashmir `moral 
and political' support, while the Indians accuse Islamabad of not 
only arming and training the `ghusbaithyas', but also sending 
Pakistani soldiers across the LoC. The truth, as always, probably 
lies somewhere in between these two positions.
   
Television in both countries is overflowing with crocodile tears as 
newscasters solemnly inform us of the plight of Kashmiri civilians 
on both sides of the Line of Control separating the two armies. Day 
in and day out, we are told about the devastation shelling is 
producing among civilians. Obviously, PTV makes no mention of the 
casualties our shells are causing while Doordarshan and Zee TV are 
equally silent on the mayhem the Indian Bofor guns are dealing out 
to the villagers on our side of the LoC.
   
This approach is the one constant factor in this conflict since it  
erupted over a half century ago: both sides have pretended to be 
greatly concerned about the fate of the Kashmiris, while in reality 
all they have ever cared for is the land. As a consequence, they 
are both prepared to fight until the last Kashmiri. Had they an 
iota of genuine feeling for the people caught up in this 
debilitating and draining conflict, they would have asked them what 
they wanted. Instead, both India and Pakistan cling stubbornly and 
blindly to their respective positions, repeating them like mantras 
that have lost all their original meaning, but continue to be 
mumbled like incantations against evil spirits.
   
Having mortgaged our past, present and future to the Kashmir 
conflict, generations of leaders and successive governments in New 
Delhi and Islamabad are now locked rigidly into their respective 
positions. Powerful vested interests militate against any 
flexibility. Instead of moulding public opinion to accept change in 
South Asia when the world is in flux, opportunistic politicians in 
both countries have used Kashmir as a stick to beat their opponents 
with. The result is that whenever there is a crisis, leaders 
respond with a series of knee-jerk reactions that are as 
unimaginative as they are predictable.
   
Whoever planned the current escalation apparently forgot that India 
is currently (and, it seems in recent years, perpetually) in 
election mode. This puts the caretaker BJP government under 
pressure not to appear soft on Kashmir. As it is, Mr Vajpayee is 
taking flak for his famous bus ride to Lahore, and his Defence 
Minister has not helped the BJP cause by his conflicting signals. 
Congress is in the enviable position of criticising the government 
from the sidelines for not having been aware of the `intrusion' 
initially, and then not responding effectively enough. The danger 
is that in order to limit the political damage it has suffered, the 
BJP might choose to escalate further.
   
In Pakistan, Nawaz Sharif's government is apparently in the 
comfortable position of denying any complicity while offering to 
send Sartaj Aziz to New Delhi. Indian commentators are already 
asking that since Pakistan says it has nothing to do with the 
`ghusbaithyas', what is the point of holding talks with its Foreign 
Minister?
    
Benazir Bhutto is advocating prudence from her self-imposed exile; 
while she was in power, she made the most bellicose noises over 
Kashmir and has repeatedly accused this government (wrongly, alas) 
of wanting to reduce the defence budget. While abroad, she talks of 
peace and co-operation in South Asia because that is what her 
Western audiences want to hear. At home, the opposition is willy-
nilly supporting the government.
   
But this endless domestic point scoring obscures the real dangers 
posed by this posturing and muscle flexing. Given the potential the 
current crisis has of spiralling into the unknown territory of 
nuclear conflict, one would have expected a little more sense of 
responsibility in New Delhi and Islamabad. But alas, it is politics 
as usual. Judging from the macho talk emanating from both capitals, 
one would imagine that the nuclear tests simply did not take place 
last year. Do we really want such immature people to have their 
itchy fingers on the atomic trigger?
   
However, we cannot afford to say "a plague on both their houses", 
and wash our hands of the whole affair. The people of the two 
countries share a subcontinent; ultimately, it is their lives, 
their land and their destinies on the line here. Already, three 
generations have been blighted by this mindless conflict. But if we 
have suffered, the people of Kashmir have suffered even more 
through this unending confrontation. We have to stop blaming each 
other and get on with solving this problem once and for all.
   
Leaders and opinion makers in both countries have to grasp the 
simple fact that neither side can get what it wants through force 
now that nuclear arms have entered the equation. If they consult 
the people of Kashmir instead of the defence and foreign policy 
establishments, they will come to the conclusion that a resolution 
is not impossible, given political will and a degree of humanity. 
Unfortunately, both commodities are in short supply in the two 
capitals. According to an Indian opinion poll, 72% of Kashmiris 
interviewed in Indian-controlled Kashmir wanted independence.
   
If the Hindu and Buddhist areas of the state go to India, we keep 
Azad Kashmir, and the Vale (that beautiful bone of contention) is 
declared independent, we could have the contours of an agreement. 
Both sides would have something to appease public opinion, and the 
Kashmiris would have something to show for their long struggle. 
Open borders would reduce the pain of partition. This is not a new 
proposal, but unfortunately, it has not been sufficiently debated 
because reason and logic are constantly being overtaken by passions 
and paranoia.


===================================================================
SPORTS
990612
-------------------------------------------------------------------
Saeed Anwar blasts 103 off 144 balls: Pakistan in Semi-finals
-------------------------------------------------------------------
LONDON, June 11: Pakistan, fired by a Saeed Anwar century and an 
end-of-match hat trick from Saqlain Mushtaq, joined co-favourites 
South Africa in the World Cup semi-finals after routing Zimbabwe by 

148 runs in the Super Six clash at The Oval on Friday.
    
Saqlain took the last three wickets of the match as Zimbabwe 
capitulated for 123 in 40.3 overs.
    
It was only the second hat trick in World Cup history. The first 
was by India's Chetan Sharma against New Zealand at Nagpur in 1987.
    
Saqlain ended the one-sided match with his second hat trick in One-
day Internationals. The off-spinner had Henry Olonga and Adam 
Huckle stumped, before trapping last man Mpumelelo Mbangwa, 
surrounded by a posse of close fielders, leg-before. Saqlain ended 
with three for 16 off 6.3 overs.
    
Saeed's 103 was the basis of Pakistan's challenging 271 for nine 
off their 50 overs, leaving Zimbabwe a task which was beyond them 
once Abdur Razzaq had ripped open their innings with a burst of 
three wickets in 18 balls.
    
Pakistan's win ended India's slim hopes of reaching the last four.
    
Despite their defeat Zimbabwe are still in with a chance of 
reaching the semi-finals for the first time, depending on the 
outcome of the last two Super Six games at the weekend when India 
play New Zealand and South Africa face Australia.AFP/Reuters

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990611
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Champions Trophy: Spain hold Pakistan to 1-1 draw
-------------------------------------------------------------------
Sydney Friskin
BRISBANE, June 10: Pakistan gave an uninspiring performance on the 
first day of the Champions Trophy hockey tournament here and was 
lucky to escape with a 1-1 draw with Spain who missed a penalty 
stroke in the dying seconds of the game.
    
A tendency to panic under pressure caused the undoing of Pakistan's 
defence and the team as a whole suffered from a lack of motivation. 
There was little creative ability among the halfbacks and the 
forwards had to fend for themselves. The best of them was Muhammad 
Sarwar.
    
The first half ended in stalemate with neither side coming into the 
target. Spain forced two penalty corners in this period but did not 
quite know what to do with them. Pakistan's attacks looked so 
inconsequential that Muhammad Shahbaz was taken out and replaced by 
Muhammad Nadeem. Two minutes before the interval Muhammad Shahbaz 
was back on the field to no tangible effect.
    
Spain looked a little more lively at the start of the second half 
but made a complete mess of their first penalty corner in this 
period. There is nothing more exciting in breaking a deadlock than 
the element of surprise and Pakistan produced it in the 40th 
minute. A sudden dash down the right flank by Muhammad Nadeem 
earned him enough space at the top of the circle and he made a 
fierce backhand shot to hit the backboard with a tremendous whack.
    
Pakistan it seemed had put themselves right with a degree of 
comfort which was ephemeral as Spain commenced a series of counter-
attacks. They missed a good chance midway with the centre forward 
Eduard Tubau shooting wide when far placed.
    
Then in the 57th minute Pakistan's troubles began as Spain, having 
squandered another penalty corner, began to make inroads into 
Pakistan's defence. The outside right Pol Amat worked his way into 
the circle and was about to take chance when his stick was hooked 
from behind by Muhammad Usman. The inevitably was a penalty stroke 
which was competently convertetd by Antonio Iglesias who had taken 
the field earlier as a substitute.
    
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990610
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Pakistan face fresh ball-tampering charge
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LONDON, June 10: Pakistan found themselves at the centre of fresh 
ball-tampering allegations at the World Cup on Wednesday.
    
Wasim Akram's side have been reported for interfering with the ball 
by match referee John Reid of New Zealand after the second round 
match against South Africa last Saturday, a Pakistani source told 
AFP.
    
The source said: "Match referee John Reid had an argument with our 
manager Zafar Altaf about the ball after the match.
    
"Reid felt it may have been tampered with."
    
Altaf confirmed speaking to Reid, but said the team was not unduly 
concerned by the allegations.
    
"What's sad is that we are singled out every time," Altaf said. 
"It's made to sound as if we are cheats, which we definitely are 
not."
    
South Africa and Australia have both asked for the ball to be 
changed late in the innings to prevent Wasim Akram and his fellow 
seam bowlers from getting the reverse swing they are famous for.
    
"The excuse is that the dirty ball can't be sighted," the source 
said. "I believe Shoaib Akhtar is being watched very closely."
    
The allegations come amidst a dramatic change in fortunes for the 
Pakistanis, who have lost their last three matches after winning 
the first four.
    
They were stunned by minnows Bangladesh in the last match of the 
first round and then lost to South Africa and India in the Super 
Six second round.
    
They must now beat table-topping Zimbabwe on Friday to qualify for 
the semi-finals.(AFP)

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