------------------------------------------------------------------- DAWN WIRE SERVICE ------------------------------------------------------------------- Week Ending : 23 June 2001 Issue : 07/25 -------------------------------------------------------------------
Contents | National News | Business & Economy | Editorials & Features | Sports
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CONTENTS ===================================================================
NATIONAL NEWS + Takeover in 'national interest': Assemblies, Senate dissolved + Orders issued to give legal cover to action + Tarar says he was replaced by virtue of PCO + Multan Bar seeks CJ's resignation: Oath to Gen Musharraf + PML to challenge action + Politicians oppose change + Benazir says army's role to be affected + Shock waves in like-minded group's ranks + Move can endanger return to democracy: EU + Shake-up after Delhi summit likely + APHC seeks meeting with Musharraf, Vajpayee + US links normal ties to democracy + Lifting of curbs may be delayed + Powell, Sattar discuss mode of lifting curbs + Pakistan not enemy No 1, says Jaswant + Rhetoric be avoided, CE tells Indian PM + Summit to be held at Agra: Kashmir part of India: Vajpayee + N-alert system to be discussed: Summit from July 14: reports + Nasrullah doesn't share CE's view about talks + PIA might closed down shop if fails to improve + Centre to allocate Rs200m for Gomal Zam dam + People's Party to hold protest rally on Aug 14 + Conviction of Benazir termed 'discriminatory' + Zardari demands computer instructor + Ex-minister gets 3 years RI for corruption + NAB seeks freezing of ex-MNA's assets + Court notice to govt, NAB on Ghous's bail plea + Nawab Marri granted bail in murder case + Ex-naval chief's remand extended --------------------------------- BUSINESS & ECONOMY + Rs752 billion budget for 2001-02: Debt servicing claims 40% + All defence needs to be met, assures govt + No tax on remittances: Shaukat + Govt to promote free-market economy: Usman + Lowest GDP growth in 20 years: Inflation at 4.7pc: Shaukat + Contingency liabilities reach Rs58bn: Losses by corporations + Government appoints mediator to end 'feud': Petroleum sector + Oil import bill up by $600 million + Capital market stays weak amid light trading volume + KSE: pre-budget trading terribly down --------------------------------------- EDITORIALS & FEATURES + Give him a fighting chance Ardeshir Cowasjee + The General as President: a tale foretold Ayaz Amir + But can he walk the walk? Irfan Husain ----------- SPORTS + Pakistan crush Spain 6-2 in first Test + Spain hold Pakistan to a draw in 2nd Test + Waqar's six-wkt haul mauls world champions + England forfeit match after pitch invasion + Pakistan post 290 amidst firecrackers + Pakistan tour of England an outstanding success + Germany outclass Pakistan + Pakistan unlikely to produce champion in next 10 years

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NATIONAL NEWS
20010621
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Takeover in 'national interest': Assemblies, Senate dissolved
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By Ihtashamul Haque

ISLAMABAD, June 20: The Chief Executive, Gen Pervez Musharraf,
assumed the office of President with a pledge that elections would
be held in the country by Oct 2002 as directed by the Supreme Court
of Pakistan. Talking to journalists after being administered the
oath of office by the Chief Justice, Irshad Hasan Khan, at the
Aiwan-i-Sadar, President Gen Pervez Musharraf said he had assumed
the office of the president in the "supreme national interest."

The oath-taking ceremony was attended by cabinet members,
provincial governors, corps commanders, services chiefs and the
diplomatic community. An official announcement made earlier in the
day said that Mr Rafiq Tarar had ceased to hold the office of the
president with immediate effect. This followed the dissolution of
the suspended parliament including the Senate, the National
Assembly and the four provincial assemblies.

Two amendments have been made in the Provisional Constitutional
Order to effect the removal of Rafiq Tarar and induction of Gen
Musharraf as the president. A proclamation order was read out after
the oath-taking ceremony of the President which said: "General
Pervez Musharraf has entered upon the office of the President of
Islamic Republic of Pakistan under the President's Succession Order
2001. Therefore, let it be known to all and sundry that General
Pervez Musharraf took oath of office as President and assumed the
office of the President of Pakistan." After the ceremony, Gen
Musharraf told reporters that his decision to take over as the
president was led by constitutional, political and economic
considerations. He, however, made it clear that general elections
would be held by October next year as was directed by the Supreme
Court of Pakistan.

"I feel in all humility that if I have a role to play for this
nation I will not hesitate whatever decisions are involved. I hold
national interests supreme. I personally think with all sincerity
and honesty that I have a role to play in this nation. I have a job
to do here and therefore I cannot and will not let the nation
down," said the new President who continues to be the Chief
Executive and the Army Chief.

He said he had taken over as the President of Pakistan through an
amendment to a clause of the PCO of Oct 14, 1999, which allowed
continuity of the ex-president of Pakistan. "I have been thinking
of this change for some months. This has been one of the most
difficult decisions that I have taken. It was difficult because it
involved myself, doing something which I have never done in my
life.

In my entire career I have never done anything for myself. God has
been kind and continues to be kind to me. I bow my head before Him
for all the bounties that He has showered on me. I will bow in more
humility as I rise," he said. As far as the political process is
concerned, he said, there was no change whatsoever. "Let there be
no doubt that there is no change in our intentions for the future".
He said the Supreme Court ruling directing the government to hold
elections by October 2002 was very clear. "We will abide by that".
Local government elections up to district level would be completed
by August 14. Provincial and national elections would be held on
schedule next year, he added. Political activity would continue as
before, he assured.

"I think I must tell you why I decided to take over as the
president of Pakistan," he said, adding that the first
consideration was constitutional. As the assemblies, according to
the PCO of Oct 14, 1999, were suspended there was a degree of
uncertainty whether these assemblies were being restored or not.

Then the Supreme Court judgment which validated the action of
suspending the assemblies made it easier for me to decide about the
dissolution of assemblies. "With the dissolution of the assemblies,
the office of the President who was elected by these assemblies,
became untenable." He said the second consideration was political
consideration. He said his major concern for Pakistan was political
stability and harmony. "I have been saying that I would like to
place appropriate checks and balances on superstructure of the
political environment. I will ensure and guarantee the continuity
and sustainability of all the reforms and restructuring that my
government is doing. I will ensure that national interest will
remain supreme over personal and political interest."

President Musharraf said the third consideration was economic
consideration where the entire business community and foreign
investors were waiting and asking for proof of continuity and
sustainability of all the reforms that the government was now
undertaking. "I thought I can give this proof and also help improve
the economic environment of Pakistan, if I undertake this change.
It was basically the constitutional issue, political and economic
considerations which led me to this decision and above all this
decision has been taken in the supreme national interest," he said.

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20010621
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Orders issued to give legal cover to action
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By Rafaqat Ali

ISLAMABAD, June 20: Chief Executive Gen Pervez Musharraf elevated
himself as the President of Pakistan for an indefinite period
through a Succession Order 2001 here on Wednesday.

"The Chief Executive shall hold office as President until his
successor enters upon his office," the CE Order No 3 of 2001,
called as Succession Order 2001, said. The Supreme Court in its
judgement validating the military takeover, had ruled that general
elections should be held before the October 12, 2002.

The CE Order further states: "Upon the office of the President
becoming vacant for any reason whatsoever, the Chief Executive of
Pakistan shall be the President of Islamic Republic of Pakistan and
shall perform all functions assigned to the President by or under
any law." General Ziaul Haq had fixed a five-year period for
himself as the president of Pakistan.

The Order No 2 of 2001 issued by the Chief Executive stated that
the "person" holding the office of the President of the Islamic
Republic of Pakistan, immediately before the commencement of the
Proclamation of Emergency (Amendment) Order 2001, shall "cease" to
hold the office. For dissolving the parliament and provincial
assemblies, the CE order stated that the order of suspending the
same on October 14, 1999, should now be read as: "The National
Assembly, the Provincial Assemblies and Senate shall stand
dissolved with immediate effect."

Chief Justice of Pakistan will be the acting president of Pakistan
in the absence of the president, a departure from the recent
pronouncements by the apex court holding that it was violative of
the principle of trichotomy of power. "If the President, by reason
of absence from Pakistan or any other cause, is unable to perform
his functions, the Chief Justice of Pakistan is also absent from
Pakistan, the most senior judge of the Supreme Court shall perform
the functions of President until the President returns to
Pakistan," Chief Executive Order No 3 of 2001 says.

The practice of holding the executive office by the judges was
abandoned in 1996 after the Supreme Court decision in Judges Case.
The first violation of the Judges Case took place when the military
government appointed Justice Faqir Khokhar as Federal Law
Secretary. Former President Mohammed Rafiq Tarar who "ceased" to
hold office on Wednesday remained president for three years, six
months and 20 days. He assumed office on Jan 1, 1998. He was the
ninth head of the state of the country. He was the candidate of
Pakistan Muslim. Chief Executive Gen Pervez Musharraf called on the
outgoing President Mohammed Rafiq Tarar at the Aiwan-i-Sadar on
Wednesday morning, said an official announcement.

The CE remained with the outgoing president for nearly an hour
during which various issues of national importance came under
discussion, it said. Gen Pervez Musharraf said that there were no
words to express his gratitude to Rafiq Tarar whom he always held
in the highest esteem.

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20010621
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Tarar says he was replaced by virtue of PCO
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Staff Reporter

LAHORE, June 20: Former president Rafiq Tarar, said that he had
been replaced by virtue of the PCO. He said a few days back he was
approached and told that for effective implementation of the
government agenda and attainment of the national goals, elevation
of Gen Pervez Musharraf to the office of the president was
necessary.

Mr Tarar said at his first meeting after the military takeover, Gen
Musharraf had told him that he should continue as president in the
larger national interest and he had agreed. As president, Mr Tarar
said, he avoided confrontation and cooperated with the government.
He said the military leadership consulted him on important national
issues. He thanked the press and the nation for their cooperation.

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20010623
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Multan Bar seeks CJ's resignation: Oath to Gen Musharraf
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Staff  Correspondent

MULTAN, June 22: The working committee of the District Bar
Association, Multan, has demanded resignation from the chief
justice of Pakistan for administering oath to Gen Pervez Musharraf
of the president's office.

A press release said an emergency meeting of the committee was held
to deliberate on the situation arose after the chief executive's
taking over the charge of the president's office in an 'extra-
constitutional' move.

The Bar observed that the sanctity of the apex court had been
completely trampled after the "controversial" oath-taking ceremony.
"Such judges should resign who cannot stand before the tyrannical
rule," it remarked. It urged Pakistan and the Punjab Bar councils
to play their role in restoring the sanctity of the constitution
and the judiciary.

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20010623
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PML to challenge action
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Staff Reporter

ISLAMABAD, June 22: The Chief Justice of Pakistan, Justice Irshad
Hasan Khan, should tender his resignation for becoming a party to
an unconstitutional action of Gen Pervez Musharraf to remove Rafiq
Tarar, an elected president of the country, Javed Hashmi said.

The Pakistan Muslim League (N) would challenge this action in the
Supreme Court ,the acting president of PML (N) told reporters after
a party meeting on Friday. The meeting, which was attended by 29
members, had resolved not to attend an all parties conference which
Gen Musharraf wanted to convene before leaving for New Delhi, Mr
Hashmi said.

"The party will not enter into a dialogue, at any level, with the
government," he said, terming Gen Musharraf's action a continuation
of efforts being made to ruin the federation.

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20010621
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Politicians oppose change
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By Faraz Hashmi

ISLAMABAD, June 20: All political parties criticized Gen Pervez
Musharraf's action to become President of Pakistan, saying the
action has weakened his position vis-a-vis Indian Prime Minister
Attal Behari Vajpayee.

Gen Musharraf's move has increased calls for boycott of the meeting
of leaders of all political parties the general is planning to
convene before leaving for New Delhi. There are indications that
the Chief Executive will hold three separate meetings with
politicians, media people and religious scholars from June 22 to
June 28 to take them into confidence over the talks to be held in
India on July 14.

"All the political leaders should review, whether he (Gen
Musharraf) deserves to be given a mandate to talk to Indian prime
minister," Vice President of PML(N) Syed Zafar Ali Shah said.
Jamaat's Chief Qazi Hussain Ahmed said Gen Musharraf had apparently
assumed the office of the president to be on a par with the Indian
Prime Minister in the forthcoming talks. However, he said, the way
he had adopted to attain the parity was self-defeating.

The Jamaat chief said that the image of the military had also been
tarnished. Only two decades ago, the people used to demand holding
of elections under the military supervision and now they suspected
elections results were tampered in the GHQ, he added. A spokesman
for Pakistan People's Party termed Gen Musharraf's action
unconstitutional and a step which would increase political
instability in the country.

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20010622
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Benazir says army's role to be affected
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Staff  Correspondent

ISLAMABAD, June 21: Benazir Bhutto has said that the dissolution of
the assemblies shows that Gen Pervez Musharraf had lost confidence
that the parliament would elect him or give him the vast powers he
had desired.

In a statement issued she said "Musharraf has benefited himself by
the self-proclamation and many will see this as an abuse of office
for self benefit. However, the nation, its constitution and
democratic aspirations have all lost. The professionalism of the
Pakistan Army would also be affected by combining the two offices
of the President and the Army Chief in one person, she added." The
last military president bequeathed the country with the drugs and
guns culture in his bid to divide and rule. The one before him
disintegrated the country. The precedents augur ill for what
Musharraf has done.

"The assumption of the Presidency by the Army Chief is another dark
chapter in the history of Pakistan and its people. While Musharraf
has assumed the Presidency, he remains unelected and
unrepresentative and thereby an illegitimate holder of the office.
Each act of his will be subject to validation by the future
parliament. "Musharraf lacks political support and unless he can
muster it, he will be forced to do what his predecessors Gen Ayub
and Zia did by holding a fake referendum or forcing the local
councilors to vote for him. "Each one of these acts will further
contribute to political instability in the country." "Musharraf
would like to see powerful president which is at odds with the
dream of Pakistan's founder who had envisaged the country as a
federal, democratic and parliamentary state.

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20010621
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Shock waves in like-minded group's ranks
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By Ahmed Hassan

ISLAMABAD June 20: The oath-taking as president by Gen Musharraf
and later dissolution of assemblies has sent shockwaves in the rank
and file of PML like-minded group, threatening its very existence.
Prominent among those who attended the meeting were Ijazul Haq,
Gohar Ayub Khan, Chaudhry Shujaat Hussain, Lt-Gen (retd) Majeed
Malik, Col (Rtd) Sarwar Cheema and Eng Fazal Hussain.

Informed sources told Dawn that the participants of the meeting
criticized Mian Azhar for failing to convince the Chief Executive
during his meeting in Lahore not to dissolve the assemblies and
instead gave a go ahead to what had happened today. A prominent
party leader even accused the leadership of having failed to muster
sufficient numerical support for the general in the suspended
assemblies that would have ensured restoration of the assemblies.

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20010622
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Move can endanger return to democracy: EU
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By Shadaba Islam

BRUSSELS, June 21: The European Union joined the United States and
the Commonwealth in criticizing General Pervez Musharraf's decision
to become president of Pakistan, saying the move could endanger a
return to democracy in the country. But the EU statement, issued
after rapid consultations between the 15 EU capitals, was less
strident than much-tougher comments by US officials in Washington
and British Foreign Secretary Jack Straw.

Diplomats said the EU declaration struck a compromise between the
bloc's traditional hard-line stance against military leaders and
governments and a more pragmatic recognition that Europe must work
to encourage Pakistan's moves to democracy, not isolate Islamabad.

The statement said that the 15 EU governments "noted" General
Musharraf's installation as Pakistan's president and "reiterated
calls for a transition to democracy." The EU said it was
"concerned" that General Musharraf's actions could "jeopardize
progress made in this path," and also urged Pakistan to "remain
committed to a timely return to democracy."

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20010623
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Shake-up after Delhi summit likely
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Special Correspondent

ISLAMABAD, June 22: In the wake of Gen Pervez Musharraf's elevation
to the office of president intense jockeying has started both
within the federal cabinet and in the top military brass with the
possibility of the corps commanders of the four provinces assuming
the respective offices of provincial governors replacing the
present incumbents.

These four governors in uniform will sit in the reconstituted
National Security Council with the president who would also be in
his COAS uniform, the Chairman Joint Chiefs of Staff Committee who
is likely to be Lt-Gen M. Usmani, the present deputy army chief,
the chiefs of staff of Navy and Air Force and the Vice Chief of
Army Staff, a new post expected to be created for which both the
present Chief of General Staff (CGS) Lt-Gen Mohammed Yousuf and the
present ISI chief, Lt-Gen Mahmood, are said to be serious
candidates. Military experts, however, said Mahmood's chances are
slim because of his ISI background.

The civilian side of the NSC would be made up of the prime
minister, the finance minister, the defence minister and the
interior minister. Since finance minister Shaukat Aziz is being
tipped to become the senior minister with added responsibility of
looking after routine cabinet meetings, the present Secretary-
General Finance, Moin Afzal, whose contract is expiring in a month
or so, is expected to be given the portfolio of minister of state
for finance.

The possibility of Shaukat Aziz becoming the prime minister is not
being ruled out. However, there are still many ifs and buts in the
way of his elevation to the office which at present is with the
president. At best for the time being Shaukat Aziz would perhaps
assume the office of deputy prime minister in which case Moin Afzal
would be elevated to a full minister for finance.

The donors, it is said, would feel more comfortable with the team
of Shaukat and Moin remaining intact for the next three years at
least in the interest of continuity. The one person from among the
now almost defunct Like-Minded Group who is expected to get a slot
in the new cabinet is Chaudhry Shujaat Hussain who is being
rewarded for proposing the other day an establishment-inspired
formula for the solution of Kashmir issue. This perhaps was done to
test the waters on both sides of the LoC.

The fact that no Jihadi faction has so far taken any serious note
of Chaudhry's advice to the nation to forget the UN resolutions on
Kashmir is being regarded here as a further confirmation as to who
the real authors of the formula are. All these changes and many
more are likely to be made after President Pervez Musharraf returns
from his visit to India.

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20010623
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APHC seeks meeting with Musharraf, Vajpayee
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By Jawed Naqvi

NEW DELHI, June 22: The All Parties Hurriyat Conference formally
sought a meeting Prime Minister Atal Behari Vajpayee and President
Gen Pervez Musharraf into a purposeful political exercise.

In identical letters delivered in New Delhi to the Prime Minister's
Office and the Pakistan High Commission, APHC chairman Prof Abdul
Ghani Bhat said the decision to approach the two leaders was taken
at an extraordinary meeting of the APHC's executive council on June
13.

The APHC's letters came after some key members of the 23-member
umbrella group, fighting Indian rule in Kashmir, felt betrayed by
New Delhi and Islamabad, who have both brushed aside their
proposals to involve the Hurriyat in a Musharraf-Vajpayee summit,
even if the tone and tenor of the two governments might have
varied. In a stinging attack on the proposed summit, Yasin Malik,
head of the Srinagar-based Jammu and Kashmir Liberation Front, said
it was a meeting of two imperialist powers.

Malik told BBC on Thursday that he did not expect the summit to
achieve much on Kashmir without the involvement of the principal
party to the dispute. Claiming that his party had taken a
principled stand, the JKLF leader said he wanted India and Pakistan
to resolve the issue by discussing it with the "principal parties -
the genuine leadership of Kashmir."

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20010623
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US links normal ties to democracy
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Staff Correspondent

WASHINGTON, June 22: The United States has reiterated its desire to
build a cooperative bilateral relationship with Pakistan, but
stressed that democracy is an aspect of it and Gen Pervez
Musharraf's action in becoming president "pointed in the wrong
direction".

Answering questions on the continuing Sattar/presidency saga,
deputy spokesman Philip Reeker said at the regular State Department
briefing that the US had a desire to rebuild cooperative relations
with Pakistan. It was important that a bilateral relationship was
developed.

But, Mr Reeker said, "clearly democracy is an aspect of that. And
we have expressed for a long time now our concerns about the
original actions taken by Gen Musharraf 18 months ago, and our
hopes to see Pakistan return and make progress on the path back to
democracy."

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20010622
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Lifting of curbs may be delayed
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Monitoring desk

WASHINGTON, June 21: The US does not endorse Gen Pervez Musharraf's
takeover as president and called upon Islamabad to immediately
restore democracy, sources in administration said.

Administration sources said Secretary of State Colin Powell felt
"blindsided" and "angry" because Foreign Minister Abdul Sattar had
one day earlier outlined Islamabad's plans to return to civilian
rule. "It made him (Powell) look foolish because only yesterday he
was saying how happy he was by Sattar's report talking about a
return to democracy," the source said.

According to these sources, Powell and top US officials felt "so
betrayed" because Sattar had kicked off his 90-minute meeting and
luncheon by declaring that Pakistan would hold elections next year.
They said Musharraf's decision would "certainly complicate"
Washington's consideration in lifting any of the multiple layers of
sanctions imposed on Islamabad by the US. State Department
spokesman Richard Boucher said Musharraf's move to dissolve "the
elected assembles and to appoint himself president severely
undermines Pakistan's constitutional order.

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20010620
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Powell, Sattar discuss mode of lifting curbs
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By Tahir Mirza

WASHINGTON, June 19: Pakistan and the United States had "very, very
good and fruitful discussions" during the highest level contact so
far between Islamabad and the Bush administration.  This was how US
Secretary of State Colin Powell characterized his discussions with
Pakistan Foreign Minister Abdul Sattar while talking to reporters
outside the State Department after a meeting lasting almost 90
minutes.

Gen Powell said all the items on the agenda were discussed, and the
US was encouraged by what Mr Sattar had to say in respect to
preparations for elections next year. "We talked about sanctions
and we talked about how one gets through the process of eventually
lifting sanctions," Powell told reporters after the meeting.

Afghanistan was considered at length. The US has been anxious to
see Pakistan exercise more influence over the Taliban and militant
organizations. China was also taken up with respect to its role in
the region, and US sanctions against Pakistan were among issues
dominating the talks which also touched on the subject of non-
proliferation.

There was apparently no commitment from Gen Powell about what had
been decided about sanctions, but he said the meeting was marked by
the openness that had been a feature of US-Pakistan relations over
the past half a century. Mr Sattar reciprocated the sentiments
expressed in Gen Powell's short statement and noted particularly
the words used by the secretary in his letter inviting Mr Sattar to
Washington that the US attached value to 50 years of friendship
with Pakistan. The minister said he had informed the secretary of
the expectations centered on next month's Musharraf-Vajpayee
sunmmit, and said it marked a moment of hope in relations between
Pakistan and India.

Sattar also said that he told Powell Pakistan would not be the one
to break a moratorium on nuclear testing. "We talked also about
nuclear issues and I have informed the secretary of state that
Pakistan will maintain the moratorium on further tests, that
Pakistan will not be the first country to resume testing in the
future," Sattar said.

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20010622
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Pakistan not enemy No 1, says Jaswant
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Monitoring Desk

SYDNEY, June 21: External Affairs Minister Jaswant Singh said that
India never regarded Pakistan as " Enemy No 1", and asserted that
Kashmir was not a territorial dispute. "Of course not. We've never
regarded Pakistan as such. That's your classification. We wish
Pakistan well," he said when asked during an interview to SBS
Television's ' Dateline' program if India regarded Pakistan as
Enemy No. 1. Prime Minister Atal Behari Vajpayee had, on his
historic visit to Lahore, made almost exactly the same point, Mr
Singh said.

"After all, Pakistan, Bangladesh and India were born of the same
womb. It is true that Pakistan pursues a policy of compulsive
hostility towards India, but we have always believed in dialogue
process," he said. On the Kashmir issue, Mr Singh said, "It's not a
conflict over Jammu and Kashmir. It's not a territorial dispute. We
do not believe in denominational nationalism. We believe in civic
nationalism. Pakistan believes otherwise" .On why India rejected
plebiscite in Kashmir, Mr Singh said: "We deal directly with our
citizens. The government has been dealing with them for years".

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20010621
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Rhetoric be avoided, CE tells Indian PM
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ISLAMABAD, June 20: Chief Executive Gen Pervez Musharraf and Indian
Prime Minister Atal Behari Vajpayee discussed details of the
forthcoming visit of the former to India.

Mr Vajpayee had telephoned Gen Musharraf following an announcement
of the dates for the visit. Responding to the telephonic call of
the Indian prime minister, the chief executive referred to the
rhetoric emanating from some quarters recently which, he suggested,
"should be avoided to create the necessary environment for holding
of the talks in an atmosphere of cordiality."

Mr Vajpayee agreed with the suggestion and "held out the assurance
that comments and statements that were not conducive to a cordial
environment would be avoided." He, however, told Gen Musharraf that
"quite often statements were quoted out of context, which conveyed
a wrong message." An official statement said: "The two heads of
governments talked by telephone in an atmosphere of cordiality and
frankness." Mr Vajpayee also said that he was eagerly looking
forward to Gen Musharraf's visit to India.-APP

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20010620
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Summit to be held at Agra: Kashmir part of India: Vajpayee
-------------------------------------------------------------------
By Jawed Naqvi

NEW DELHI, June 19: The much-awaited Pakistan-India summit will be
held in Agra it was officially announced.

According to the official version of the plan, leaked earlier Gen
Pervez Musharraf and his wife Sehba Musharraf would arrive in New
Delhi on July 14. Gen Musharraf, and presumably his wife, will
visit Ajmer to pay their respects at the shrine of the sufi saint
Moinuddin Chishti (RA). "Their stay in India will include a
ceremonial welcome in Delhi, a retreat in Agra, where discussions
will be held between the two leaders, and a visit to Ajmer Sharif,"
a foreign ministry spokesperson said.

Vajpayee told reporters in Mumbai he was optimistic that next
month's peace summit with Pakistan would yield results. He,
however, stressed there would be no compromise on sovereignty over
Kashmir. Vajpayee refused to confirm the venue or dates of the
summit, which the Pakistani officials had indicated would take
place on July 14-16 in Agra.

Vajpayee said there would be no compromise on India's territorial
claim to the region of Kashmir. "We are clear that Kashmir is an
integral part of India. We will stress this issue in the dialogue,"
Vajpayee said. "One-third of Kashmir is with Pakistan and we will
raise this issue also."

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20010618
-------------------------------------------------------------------
N-alert system to be discussed: Summit from July 14: reports
-------------------------------------------------------------------
By Jawed Naqvi

NEW DELHI, June 17: Chief Executive Gen Pervez Musharraf is
expected to hold talks with Indian Prime Minister Atal Behari
Vajpayee in New Delhi over three days from July 14, Indian Express
said.

Another newspaper, regarded as close to the ruling BJP, said the
two leaders would discuss among other key issues, a mechanism to
prevent nuclear accident between their forces.

Reporting that India and Pakistan were likely to discuss the
establishment of a 'Nuclear and Ballistic Missile Stabilization
Regime' in the forthcoming summit talks, Pioneer newspaper said: "A
Nuclear Risk and Ballistic Missile Reduction Centre may be set up
to avert a nuclear flashpoint."

Such a mechanism was sought in the 1999 Lahore Declaration agreed
by the two countries.

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20010617
-------------------------------------------------------------------
Nasrullah doesn't share CE's view about talks
-------------------------------------------------------------------
Staff Reporter

LAHORE, June 16: Nawabzada Nasrullah Khan told reporters he did not
share Chief Executive Gen Pervez Musharraf's optimism about
progress in talks with Indian prime minister Vajpayee next month.

The ARD leaders said he had gathered the impression at a meeting
with the chief executive a couple of days ago that the CE was
optimistic that his meeting with Mr Vajpayee will yield results.
The Nawabzada said Gen Musharraf was of the view that India could
no more ignore the pressure built by the sacrifices rendered by the
Kashmiris over the years.

The politician, however, said in view of India's track record he
would rather be more cautious. He said he had told the general in
clear terms that the statement issued by India's External Affairs
and Defence Minister Jaswant Singh, that all of Kashmir was an
integral part of India was very significant. He said the statement
came after Mr Vajpayee had sent the invitation to Gen Musharraf and
could not be ignored. Nawabzada Nasrullah said bilateral talks held
in the past had produced no results. He said he feared that the
outcome would not be no different this time.

The ARD president said he had also gathered the impression that the
chief executive planned to hold a joint meeting with political
leaders by the end of the current month. The meeting, he said,
could take the form of an all-parties conference. He said the
general had invited him to the meeting, but it would not be
possible for him to participate.

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20010622
-------------------------------------------------------------------
KARACHI: PIA might closed down shop if fails to improve
-------------------------------------------------------------------
Staff Reporter

KARACHI, June 21: The deputy managing director of the PIA,
Khursheed Anwer, said that the airlines was in a very bad shape,
and if it did not show any sign of improvement in a year the
government would close it down.

He said the government had promised to provide Rs20 billion
shortly, but all of it would be spent on clearing the liabilities.
He said that the Rs20 billion deficit comprised around Rs10 billion
loss in the past three four years, and another Rs10 billion was the
accumulated loss. He said the earlier management had even taken Rs4
billion from the employees provident fund. He said that the open-
skies policy and opening up of the northern airports to the foreign
airlines introduced by the past governments had played havoc with
the PIA economy, crippling it down slowly.

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20010618
-------------------------------------------------------------------
Centre to allocate Rs200m for Gomal Zam dam
-------------------------------------------------------------------
By Intikhab Amir

PESHAWAR, June 17: The federal government would provide Rs200
million for the multi-purpose Gomal Zam dam in NWFP during the next
financial year, official sources told Dawn.

The dam being built with the main objective of controlling flood in
the D.I. Khan district and the South Waziristan Agency of the Fata,
would be completed in six years at an estimated cost of Rs13
billion.

The federal government has intimated to the NWFP about the
allocation of Rs200 million for the execution of Gomal Zam dam's
project in its next financial year's Public Sector Development
Program, said the sources. The project, considered important for
giving boost to the NWFP's agriculture sector, would bring 163,000
acres of the currently rain-fed area under irrigation in the
D.I.Khan district.

Apart from irrigation and flood control purposes, the project also
involves setting up of a small power generation unit with 17MW
power generation capacity.

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20010618
-------------------------------------------------------------------
People's Party to hold protest rally on Aug 14
-------------------------------------------------------------------
Staff Reporter

ISLAMABAD, June 17: Pakistan People's Party will hold a protest
rally on August 14 and will not seek permission from the present
non-elected government for it, PPP deputy secretary-general and
former law minister, Raza Rabbani said.

Speaking at a press conference after the meeting of the PPP Central
Executive Committee, he said that his party would reinstate the
retrenched workers when it came to power. He deplored retrenchment
on a large scale and termed that against the common men. He said
that all retrenchment, downsizing and right-sizing was being done
under the pressure of international financial institutions.

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20010617
-------------------------------------------------------------------
Conviction of Benazir termed 'discriminatory'
-------------------------------------------------------------------
Staff Reporter

ISLAMABAD, June 16: The Central Executive Committee of Pakistan
People's Party rejected the recent conviction of former prime
minister Benazir Bhutto by an accountability court, terming it
"arbitrary, discriminatory, capricious and based on mala-fide."

Three-year rigorous imprisonment awarded to Benazir Bhutto in
absentia under section 31-A of Accountability Ordinance was the
only issue on the agenda of CEC's meeting. Conviction of PPP
chairperson was a part of Chief Executive Gen Musharraf's plan to
eliminate her from the political scene, PPP Deputy Secretary
General Mian Raza Rabbani told a press conference.

He charged Gen Musharraf of maintaining double moral and legal
standards. A former prime minister from Punjab was allowed to leave
the country while a former prime minister from Sindh was being
hounded, he said.

Mr Rabbani said the regime was desperate to convict Benazir Bhutto
since she had been exonerated by the Supreme Court in a corruption
case and bias of a judge of accountability court had been exposed
by the apex court. "The section 31-A of NAB Ordinance was Bhutto
specific," he said adding that under the same section Nusrat Bhutto
had also been convicted. Benazir Bhutto, he said, had gone abroad
with the prior permission of the court and in full view of the
press and the nation.

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20010619
-------------------------------------------------------------------
Zardari demands computer instructor
-------------------------------------------------------------------
By Nasir Iqbal

RAWALPINDI, June 18: Asif Ali Zardari, the main accused in the
Pakistan Steel Mills (PSL) reference filed an application before
the Accountability Court No 1 for the provision of a computer
instructor for two hours, four times a week.

He stated that he wanted to attain computer literacy, which was
essential in the modern day world. He added that he had been in the
jail for the last many years, and was earlier allowed by the court
to keep a laptop in the prison. The court is likely to take action
on the application at the next hearing.

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20010617
-------------------------------------------------------------------
Ex-minister gets 3 years RI for corruption
-------------------------------------------------------------------
Staff Correspondent

QUETTA, June 16: Accountability Court No.1, Quetta, convicted Mir
Faiq Ali Jamali, a former provincial minister for labor and
manpower, and awarded him three-year rigorous imprisonment and a
fine of Rs600,000 in a reference pertaining to embezzlement in
Baitul Maal funds.

Judge Mohammad Anwar Khan Kasi, while announcing the reserved
judgment, also convicted an ex-deputy commissioner, Jafarabad,
Wahid Bukhsh Baloch. His arrest period would be considered as
imprisonment. It was the 9th reference against Mir Faiq Ali Jamali
in which he was convicted. The judge also ordered that in case of
default in payment of fine, Faiq Jamali would undergo another one
and half year rigorous imprisonment.

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20010620
-------------------------------------------------------------------
NAB seeks freezing of ex-MNA's assets
-------------------------------------------------------------------
Staff Reporter

LAHORE, June 19: An accountability court issued notice to former
MNA Chaudhry Zulfiqar for June 26 on an application filed by the
National Accountability Bureau chairman seeking an order for
freezing his assets.

Chaudhry Zulfiqar is accused of acquiring assets disproportionate
to his known income. The list of properties mentioned in the
application include several bank accounts, four petrol pumps in his
own name and five in his brother's name besides shares in four
companies and some real estate.

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20010623
-------------------------------------------------------------------
Court notice to govt, NAB on Ghous's bail plea
-------------------------------------------------------------------
Staff Reporter

KARACHI, June 22: A division bench of the Sindh High Court has put
the government, including NAB authorities, on notice for June 25,
in a petition for grant of bail on medical grounds to Syed Ghous
Ali Shah.

The petition, in which Mr Shah has prayed for being released on
bail and be allowed to go abroad for treatment as per medical
experts' advice, had come up before Justice Ataur Rahman and
Justice Ghulam Rabbani.

Mr. Rabbani was tried and acquitted by an anti-terrorism court
against which the Sindh High Court rejected the state's appeal. But
Mr Shah was subsequently detained under MPO, which has been
extended. On Jan 27, he was implicated in corruption cases by the
Regional Accountability Bureau authorities.

The petitioner developed cardiac problem in custody. He was shifted
to hospital. In view of his health condition whenever he is
required to appear in accountability court, the hospital deputes a
doctor to accompany him to deal with unseen situation. He has cited
the certificate of Dr Imran Afridi of the NICVD who had stated that
"it is medically unsafe for Syed Ghous Ali Shah, the petitioner, to
be moved from the hospital. Such activity may put his life at
risk."

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20010621
-------------------------------------------------------------------
Nawab Marri granted bail in murder case
-------------------------------------------------------------------
By Saleem Shahid

QUETTA, June 20: The Special Court for Suppression of Anti-
Terrorist Activities headed by Judge Mohammad Akbar Achakzai has
accepted the bail application of Baloch leader Nawab Khair Bukhsh
Marri on medical grounds in Justice Nawaz Marri murder case.

The court after hearing the arguments of the defence lawyers on new
bail application filed by them on medical grounds accepted it and
ordered the release of Nawab Marri on bail. The court directed the
accused that he should furnish two bail bounds of Rs.5,00,000 each.
However, despite acceptance of the bail application on medical
ground, Nawab Khair Bukhsh Marri could not be released from the
District Jail, Quetta. Authorities of the jail said that Khair
Bukhsh was also facing four other cases including murder of three
persons in Chamalang area of Barkhan.

Earlier the same court had rejected the bail application of Nawab
Marri filed which was also filed on medical ground but later the
defence lawyers filed another bail application with some changes
which was accepted by the court.

The defence counsel of Nawab Marri, Sajid Tareen advocate told Dawn
that four more bail applications would be moved in the same court
on medical grounds.

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20010623
-------------------------------------------------------------------
Ex-naval chief's remand extended
-------------------------------------------------------------------
By Nasir Iqbal

RAWALPINDI, June 22: The remand of ex-naval chief Admiral (rtd)
Mansurul Haq was extended for another 15 days by the Accountability
Court (AC) No I. He is required to appear before the court again on
July 7.

This is the third time that the remand of the former naval chief,
who is facing the charges of receiving kickbacks and commission in
defence deals, has been extended.


BUSINESS & ECONOMY
20010619
-------------------------------------------------------------------
Rs752 billion budget for 2001-02: Debt servicing claims 40%
-------------------------------------------------------------------
By Ihtasham ul Haque

ISLAMABAD, June 18: Finance Minister Shaukat Aziz presented a
modest budget of Rs751.7 billion, showing a gap of nearly Rs187
billion to be filled by borrowing while allocating over 40 per cent
of the outlay for debt-servicing and capping the defence budget at
the current year's level of Rs131 billion.

The budget, which carries a number of tax reliefs and reform
measures, has also adopted the self-assessment scheme as a primary
mode of assessment. Income tax has been made the tax of future with
a view to promoting a uniform application of income tax rates,
eliminating exemptions, concessions and immunities from assessment.
The tax liability will be assessment-based and use of presumptive
taxes will be minimized, the finance minister said.

A comprehensive scheme of general sales tax has also been adopted
in the new budget, making the GST all pervasive. Total tax revenue
receipts of Rs457.7 billion have been envisaged in the new budget
against the revised revenue receipts of Rs400 billion in the
current financial year. In view of the number of tax relief’s
offered, which would certainly reduce the revenue collection, it is
not clear how the budget proposes to raise the additional income of
Rs57.7 billion.

Provinces will get Rs190.0 billion during 2001-2002. Subsidies
worth Rs20.7 billion have also been allocated in the new budget.
The government is expecting to obtain Rs261.1 billion external
resources to fund the new budget which include Rs48.7 billion
project aid, Rs190.6 billion non-project aid and Rs21.8 billion
debt rescheduling. The amount of Rs10.5 billion has been earmarked
for bank borrowing in the revenue receipts.

The major chunk of the resources amounting to Rs329.2 billion has
once again been appropriated by debt-servicing against an
allocation of Rs305 billion under this head in the current
financial year. An allocation of Rs80.6 billion has been made for
running of civil expenditure. Similarly, provision for Rs49.3
billion has been kept for grants.

The share of current expenditure in the total budgetary outlay for
2001-2002 is 82.7 per cent as compared to 82.8 per cent in the
budget and 85.0 per cent in the revised estimates for 2000-2001.
The allocation of Social Action Program for the provinces has been
made at Rs110 billion for 2001-2002.

According to the details announced by the finance minister, the
present income tax exemption limit of Rs 40,000, which was fixed in
1994, has been raised to Rs 60,000. The number of slabs have been
reduced from 7 to 5, with the minimum at 7.5 per cent and maximum
at 35 per cent. Tax-payers earning income up to Rs400,000 shall get
relief. In this behalf those in the higher income tax bracket will
face some additional liability. Surcharge on corporate and personal
income will be abolished with effect from the assessment year 2002-
2003.

The finance minister also said that banking companies income tax
has been reduced from 58 per cent to 50 per cent with effect from
2002-2003. Similarly, the effective tax rates for public and
private limited companies, after merger of surcharge, are being
fixed at 35 per cent and 45 per cent, respectively.

Five types of withholding taxes such as withholding tax on
industrial and commercial gas consumers and from auction of
properties belonging to government, local authorities and
companies, bonus shares, etc, have been removed. In case of
brokerage and commission income of travel agents, advertising
agents, insurance agents and shipping agents, presumptive tax will
be converted into adjustable withholding taxes.

Similarly, the withholding tax from interest on bonds,
certificates, debentures and securities issued by the banking
companies or other companies or authorities is also being made
adjustable. The finance minister said that the new self-assessment
scheme had been designed to encourage tax-payers to declare their
true income without any fear. Only 20 per cent of returns
qualifying for this scheme shall be subjected to audit. The time
limit for companies for completion of assessment under the scheme
is being reduced from two years to one year.

In order to offer incentives for capital market, it has been
decided to give exemption on capital gains for another three years.
In addition, the bonus shares issued by a company would not be
treated as its income. It has also been proposed that the listed
companies distributing 40 per cent of their after-tax profit or 50
per cent of their paid-up capital, which ever is less, would not
attract 10 per cent tax on excess reserves. Also investment in new
shares will be deductible up to 10 per cent of personal income with
a maximum of Rs100,000. This concession will also be available to
buyers of shares offered to the general public of the companies
being privatised by the Privatisation Commission.

It has also been decided that the income of insurance companies
from dividends will be taxed at the same rate as applicable to
other taxpayers. A longstanding demand of the leasing companies has
been accepted to offer first year allowance to be effective from
assessment year 2001-2002.

The finance minister also announced incentives for the housing
sector. He said it had been decided to allow tax deductibility on
markup paid on housing loans up to 25 per cent of income with a
maximum of Rs50,000. A number of concessions for pension funds and
annuities have also been finalized according to which it has been
decided to allow a rebate on investment in an approved pension
funds. In addition, for the benefit of self-employed persons or any
other persons pension contributions to approved annuities of
insurance companies up to 5 per cent of income subject to a maximum
of Rs50,000 will be given tax rebates. Retirement products being
introduced by banking, non-banking financial institutions under the
approved framework of the Security and Exchange Commission of
Pakistan will also qualify for this incentive.

Overseas Pakistanis have been allowed to move their money freely
for consumption, investment or any purpose to Pakistan without
harassment of tax authorities. An ordinance is being issued to
provide necessary protection in this regard. The salary income of
Pakistani seafarers working on foreign vessel remitted to Pakistan
through normal banking channels is being exempted from levy of
income tax.

At present the maximum limit on value for depreciation of allowance
on motor-cars is Rs600,000 which was fixed in 1991. Keeping in view
the increase in prices of cars, it has been decided to enhance the
limit to Rs750,000.

The finance minister also announced removal of a number of tax
exemptions, including on income from FEBC, TFCs, income from
national savings sachems exceeding Rs300,000 and income from a
number of special purpose relief funds. He said central excise duty
was being eliminated from 11 items, including from enameled cooper
wire, filter rods, carbon black, etc. "For other items, there are
legal as well as revenue considerations that make it difficult at
this stage to remove the excise duty," the finance minister added.

According to him, even with the CED regime, substantial
simplification will be introduced. The two major irritants of the
excise system, he said, were the labyrinth record keeping and the
cumbersome process of supervised clearance under the physical
presence of excise officials. In this behalf appropriate amendments
to the central excise act are proposed to prescribe simplified
record-keeping, replacing the outmoded requirements. The system of
supervised clearance is being replaced with self- clearance and no
excise official will be posted in the units subject to excise duty.

As regard customs, he said, it had been decided to reduce custom on
4,000 items from 35 to 30 per cent and reduction in number of slabs
from 5 to 4. The new slabs would be 30 per cent, 20 per cent, 10
per cent and 5 per cent. He said it has been decided to give relief
to major inputs used in the construction industry. Since iron and
steel bars and sheets are important ingredients of construction
work, duty on iron and steel scrap is being reduced from 15-25 per
cent to 10 per cent. Further duty on construction machinery such as
crane lorry’s and concrete mixers is being reduced from 90 per cent
to 30 per cent and on graders and levelers from 25 per cent to 10
per cent. In the engineering industry, 10 per cent rate has been
reduced on basic raw material. Duty on scrap from ship-breaking
industry is being reduced from 15 per cent plus Rs 1000 per lDT to
10 per cent only.

It has also been decided to reduce the rate of duty on stainless
steel from 25 per cent to 10 per cent. Also duty on SAN, ABS,
polystyrene, polycarbonate has also been reduced from 15 per cent
to 10 per cent to help the small and medium industries. As regard
the textile industry, duty on woolen yarn and nylon has been
reduced from 35 per cent to 10 per cent and 20 per cent,
respectively. The government also reduced duty on CKD for
manufacture of trucks from 30 per cent to 20 per cent. Also duty on
tyres of buses and trucks has been reduced from 15 per cent to 10
per cent to discourage smuggling.

To boost the agriculture sector, duty on inputs of fertilizer
industry such as sulphur and zinc dust has been reduced from 10 -35
per cent to 5 per cent. Similarly, duty on pesticides as well as
formulated pesticides has been reduced from 10 per cent-25 per cent
to 5 per cent.

Also import duty on soybeans meal, which is an important element of
chicken feed, has been reduced to 10 per cent. A number of duties
have been removed on SMEs, and concessions to the cement industry
and chemical industry have also been given by reducing duties on
related items.

The finance minister said that in order to encourage wider
readership of newspapers, it was necessary to offset the rising
cost of newspaper printing. For this purpose the new budget
proposed to reduce the duty on several inputs such as photographic
plates, plate processors, film processors, image setters, printing
frame from 25-35 per cent to 10 per cent.

The government has also decided to further reduce the duty on
refined sugar from 15 per cent to 10 per cent. But duty on some of
the consumer goods such as microwave oven, electric cattle, radio,
grinders and mixers has been increased from 25 per cent to 30 per
cent with a view to encouraging the local industry. Duty on the
import of VCR, DVD, VCP, LDP, etc, has also been increased from 10
to 20 per cent.

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20010620
-------------------------------------------------------------------
All defence needs to be met, assures govt
-------------------------------------------------------------------
Staff Reporter

ISLAMABAD, June 19: Minister for Finance Shaukat Aziz has said that
all necessary requirements of armed forces are being met to ensure
strong defence of the country. "We have kept our defence budget
flat during 2001-2002 but I assure you it will not hurt the
operational efficiency of our armed forces," he said. He said the
move would not affect the country's sovereignty.

The finance minister said the overseas Pakistanis were also being
allowed to import many items duty-free. He said three categories
had been made for them in this connection. He said anybody
transferring $2500 through normal banking channels would be offered
$700 allowance for importing duty-free items.

Those sending $10,000 dollars through banks, would be given $1200
allowance. The third category would have more allowances to buy
duty-free items, he added. He said the National Investment Trust
(NIT) had planned various schemes for overseas Pakistanis. He
expressed the hope the overseas Pakistanis would take part in these
schemes once they were announced. "A package of incentives will be
offered by the Board of Investment (BoI) for those overseas
Pakistanis who plan to invest in the country," Aziz said.

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20010619
-------------------------------------------------------------------
No tax on remittances: Shaukat
-------------------------------------------------------------------

ISLAMABAD, June 18: Finance Minister Shaukat Aziz that the bona
fide remittances made through the normal banking channel by
overseas Pakistanis would not be subjected to any kind of taxes.

Presenting the budget, he said the step would enable the overseas
Pakistanis to remit money freely for consumption, investment or any
purpose to Pakistan without harassment of tax authorities. An
ordinance would be promulgated to provide protection in this
regard, he added. He further said that the salary income of
Pakistani seafarers working on foreign vessels remitted to Pakistan
through normal banking channels would be exempted from levy of
income tax.-APP

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20010621
-------------------------------------------------------------------
Govt to promote free-market economy: Usman
-------------------------------------------------------------------

LONDON, June 20: Minister for Petroleum and Natural Resources,
Usman Aminuddin the government is committed to pursuing agenda of
promoting a free market economy in oil and gas, as well as in other
sectors of the economy.

The minister said, as a result of the investment policy reforms of
December 2000, the entire services sector has been opened for FDI,
adding, minimum foreign equity for non- manufacturing sector has
been reduced from and technical fees for non-manufacturing
enterprises have been relaxed, he said, adding, foreign investors
are allowed to select any field of investment, barring a few
industries. Usman Aminuddin said, foreign investment on repatriable
basis is now allowed in service, infrastructure, social and
agriculture sectors.

The minister said, the government would continue to deregulate
prices of oil products and the distribution system and eliminate
subsidies over a three-year period. He said, the government will
vigorously pursue the privatization program on a realistic but
ambitious basis with no fire sales contemplated, adding, in the
meantime, good corporate governance will be promoted in public
sector companies.

The minister said, we will support the Oil & Gas Regulatory
Authority in developing a transparent environment, building
consumer confidence through public participation and timely
adjustment of oil products and natural gas prices. Concurrently,
acceptance of private sector participation and investment will be
promoted in the lower echelons of government, he added. Usman
Aminuddin said, the government would encourage investment in
exploration and production activities by continually updating
policies for both onshore and offshore activities with a view to
consolidating, enhancing and improving the previous terms.
Procedural bottlenecks relating to equipment, taxation and land
acquisition will be eased, he added.

The minister said, keeping in mind the supply/demand balance for
natural gas in the long-term, we would pursue further the import
option of natural gas and would expand the transmission and
distribution system to accommodate the additional availability. The
government will promote use of CNG as a replacement of liquid
fuels, particularly high speed diesel oil, for environmental
improvement and import substitution, he added.

Minister for Petroleum and Natural Resource, Usman Aminuddin said
the government would expand storage and infrastructure facilities
to deliver oil products efficiently and economically to the
customers by increasing marketing company margins and retailer
commissions. "We would develop and construct a network of primary
and secondary product pipelines linking main consuming areas to the
refineries and major installations," he added.

The minister said the refining base will be improved through
upgrading existing refineries and adding new refineries to reduce
deficit oil products imports. While pursuing policies of
sustainable development we shall continue to project and preserve
the environment through updated technology applications with the
support and participation of the industry, he added. Usman
Aminuddin said Pakistan is endowed with a huge coal resource of
about 185 billion tons, the bulk (175 billion tons) is located in
Thar desert of Sindh Province.

The government is giving high priority to coal for its utilization
in power, cement and other processing industries to encourage
promotion of indigenous resources, he added. The minister said we
are studying the possibility of coal gasification as well as mining
feasibility, adding, the possibility of presence of Coal Bed
Methane in the Thar coal deposit is also being looked into.

A task force, drawing experts from both public and private sector,
has been constituted to study the techno-economic feasibility of
conversion of cement and other processing plants from furnace oil
or gas to coal, he added. Usman Aminuddin said Pakistan is fully
conscious of its international environmental obligations, adding,
Pakistan's current energy mix is highly environment friendly with
gas, hydro and nuclear contributing about 52% of energy mix.

The minister invited the prospective investors in coal extraction
and coal-based power generation to avail of these opportunities and
benefit from most attractive terms available. He said the
government's policy focus for the upstream petroleum sector is to
accelerate exploration and production of oil and gas activities
through consolidation, continuation and improvement of policy
terms, and operational flexibility.

In line with these objectives, the government has prescribed
production sharing contracts in offshore with incentives based on
water depths, he said, adding, for onshore exploration, income tax
rate has been reduced to 40% from earlier 50 to 55%.

Furthermore, the onshore zones have been redefined, particularly in
difficult areas where exploration companies were not showing
interest, the minister added. Usman Aminuddin said the new policy
package will considerably improve investors overall return. For
example, for onshore area based on Kirthar existing concession
terms, the IRR will increase from 16% to 19% in real dollar terms
while Government's take will reduce from 70% to 58%, he added.

The minister said the new onshore policy has removed the main
bottleneck of supplying gas to the nearest transmission system
through admissibility of pipeline tariff. This comfort will attract
investment for petroleum expiration in Zone I and II which remained
untapped due to non- availability of gas supply infrastructure, he
added. Giving the details of oil and gas sector in Pakistan, the
minister said, demand for energy in Pakistan currently is 43
million tons of oil equivalent and the main sources are oil (43%)
natural gas (41%), hydro (11%) and coal (5%).

This position is expected to change significantly in favour of
natural gas over the decade, he said, adding, imported crude and
products place a heavy burden on the balance of payments position
and will cost around $3.5 billion in the current year.

The minister said natural gas will have an increasing role in the
energy mix, adding, major effort will be devoted to developing
additional sources of natural gas and if necessary to augment it by
imports. It will be the preferred fuel for electricity generation,
he said, adding, hydro and coal resources would also be developed
and expanded to further reduce the dependence on imported oil.

Usman Aminuddin said, so far, 508 exploratory and 648 appraisal and
development wells have been drilled and 142 discoveries made, which
give an encouraging success ratio of 1:3:6. He said a total of
about 700 million barrels of oil and 38 trillion cubic feet of gas
has been discovered in Pakistan but prognostic potential of total
endowment of hydrocarbons in Pakistani basins has been estimated at
27 billion barrels of oil and 282 trillion cubic feet of gas.

Recently discovered gas fields are Bhit, Zamzama, Sawan, Bhadra,
Miano, Mari Deep, Sui Deep, and Zarghun with estimated reserves of
about 8.0 trillion cubic feet, he said, adding, current production
is 58,000 barrel per day of oil and 2.4 billion cubic feet of
natural gas.

The minister said, oil demand is expected to grow by 3.5% annually
from 19 million tons per year to 27 million tons per year in the
period 2000-2010. Diesel and fuel oil are the major products,
expected to grow by 7% and 3% respectively, he said. Usman
Aminuddin said there are five marketing companies operating in the
market namely PSO, Shell, Caltex, Attock and Total-PARCO, adding,
they represent a wide range of ownership from state-owned to joint
ventures to private/multinational share-holdings.

Refining capacity is 11.2 million tons per year with the shortfall
in capacity of 8 million tons increasing to 16 million tons per
year in relations to demand by 2010, he said, adding, there are
five refineries in the country namely ARL, PRL, NRL, Dhodak and
PARCO with the wide range of ownership.

The minister said, there is an extensive network of transport
facilities with 2 million tons per year (10%) of products moving by
rail, 11 million tons per year (50%) by road and 8 million tons per
year (40%) by pipelines. There is also a comprehensive spread of
retail outlets, consumers, dealers and agents to supply the oil
demand of the consumers, he added.-APP

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20010617
-------------------------------------------------------------------
Lowest GDP growth in 20 years: Inflation at 4.7pc: Shaukat
-------------------------------------------------------------------
Staff Reporter

ISLAMABAD, June 16: The year 2000-01 registered a lowest ever GDP
growth rate of 2.6 per cent since '80s coupled with reduction in
foreign investment and national savings, thus making the job of the
planners difficult to achieve an overall economic recovery during
the next fiscal year.

The Economic Survey 2000-01 released by Finance Minister Shaukat
Aziz showed mixed trends in the economy conceding 2.6pc Gross
Domestic Product growth and registering 6.8pc growth in the
manufacturing in the first nine months of the current financial
year. Till very recently, officials had been projecting a 3pc GDP
growth which was eventually placed at 2.6pc due to what the finance
minister said a continuing drought and water shortage.

The real GDP grew by 2.6pc as against 3.9pc in the last year.
However, non-agriculture GDP grew by 4.3pc this year as against
3.1pc in 1999-2000. Besides agriculture, the value addition in
electricity and gas distribution has been adversely affected by the
drought. After adjusting the impact of drought, i.e. excluding
agriculture, electricity and gas sectors, the real GDP growth
provisionally is estimated at 4.8pc as against 4pc last year.

The agriculture sector growth declined by 2.5pc, as against 6.1pc
last year. As a result, its share in the GDP has declined from
25.9pc in 1999-2000 to 24.7pc in 2000-01. The overall slump in the
growth of major crops is estimated at 10.05pc during the current
fiscal as against actual achievement of 15pc last year. Four major
drops - cotton, wheat, sugarcane and rice - witnessed decline in
production by 4.5pc, 12.1pc, 5.9pc and 6.8pc, respectively.

The services sector grew by 4.4pc as against 4.8pc last year. The
real Gross National Product (GNP) grew by 2.4pc in the current
fiscal as against 3.5pc in last year. The real per capita income
(GNP) stood at Rs4,724 - 0.1pc higher than it was last year. The
per capita income at current market prices is estimated at Rs24,528
which is higher by 6.3pc over the last year.

Total investment and fixed investment fell from 15.6pc and 14pc of
GDP to 14.7pc and 13.1pc of GDP in 2000-01, respectively. The
public sector investment grew by 4.6pc but the private sector
investment remained more or less stagnant at last year's level. The
increase in public sector investment is attributed to 35.9pc
increase in capital formation in the agriculture sector and 16.5pc
increase in the transport and communications sectors.

National savings as percent of GDP declined from 13.7pc in 1999-
2000 to 12.7pc in 2000-01. Domestic savings as percent of GDP also
declined from 15.2pc last year to 14.4pc, but foreign savings
increased marginally from 1.9pc of GDP in 1999-2000 to 2pc in 2000-
01. Due to drought, wheat production is estimated at 18.5 million
tons in 2000-01 as against 21 million tons in the last year,
showing a decline of 12.1pc. Cotton production decreased from
11.240 million bales in 1999-2000 to 10.732 million bales in 2000-
01, registering a fall of 4.5pc.

Rice production is estimated at 4.8 million tons against 5.1
million tons last year, showing a decline of 6.8pc. Sugarcane
production has also declined by about 5.9pc in 2000-01, from 46.333
million tons last year to 43.608 million tons in 2000-01.

The manufacturing sector has witnessed a sharp increase by having a
7.8pc growth, which, according to the finance minister, was not
only impressive but also broad-based. Fiscal deficit as percentage
of GDP averaged 7pc over the last two decades. According to the
finance minister, the budget deficit has reduced from 6.5pc to
5.3pc in 2000-01 which was one of the most significant
achievements. "You must know that this is the lowest budget deficit
in the last 8 years," he claimed. In absolute terms, he said that
the fiscal deficit stood at Rs185 billion.

During July-March, money supply grew by 4.9pc against the target of
10.5pc and against the last year expansion of 3.2pc for the same
period. Credit to the private sector increased by Rs79.7 billion as
compared to an increase of Rs29.1 billion in the same period last
year. Domestic credit also increased by 3.3pc (Rs48 billion) About
the capital market, the survey said that during the first three
quarters of the current fiscal, leading indicators of the stock
market displayed mixed trends. The KSE share index remained between
1300 and 1600 points, and general index of share prices declined by
11.4pc.

The inflation as measured by the changes in the CPI, stood at 4.7pc
during July-April in 2000-01 as against 3.4pc in the comparable
period last year. Exports increased by 7.6pc to $7.4 billion and
imports increased by 6.1pc to $8.8 billion during July-April 2000-
01. Trade deficit is lower by 1pc to $1.3 billion as against $1.4
billion of the last year. Current account deficit (July-March 2000-
01) narrowed sharply by 41.2pc, i.e. from $1.1 billion to $672
million.

Workers remittances (July-April, 2000-01) registered an increase of
15.9pc to $922 million. Foreign exchange reserves on end April 2001
aggregated at $1.1 billion over the last level of $1.3 billion
recorded at end June 2000.

The debt service payment during 2000-01 would be higher by 7.9pc to
$1.6 billion. The commitments and disbursement of loans are likely
to aggregate at $1.5 billion and $1.7 billion, respectively, during
the current fiscal.

The finance minister told a reporter that the CBR was expected to
finally collect over Rs400 billion by the end of June. He said
there had been problems due to international sanctions which had
now been eased to some extent. In this behalf he said that $21
million has been offered by the World Bank for on-farm water
management project in the NWFP. Mr Shaukat said that Pakistan
reserves had touched $1.7 billion mark after the World Bank
disbursed $350 million on account of the Structural Adjustment
Credit.

AFP adds: The survey document said that the country's total debt
obligations stood at more than $37 billion. The foreign payments
would further ease off as a rescheduling of $1.8 billion in debt by
the Paris Club of creditors has been finalized this year, the
survey said.

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20010622
-------------------------------------------------------------------
Government appoints mediator to end 'feud': Petroleum sector
-------------------------------------------------------------------
By Khaleeq Kiani

ISLAMABAD, June 21: The federal cabinet has appointed privatization
minister Altaf Saleem as "mediator" to resolve dispute between
petroleum ministry and cabinet division over the establishment of
Oil & Gas Regulatory Authority (OGRA), authentic sources told Dawn.

The cabinet, however, brushed aside the position of petroleum
ministry to appoint a new chairman and two members of the Natural
Gas Regulatory Authority (NGRA) and sided with the cabinet division
to continue with Muneer Ahmad as chairman, Javed Inam and Iftikhar
Ahmad as director technical and finance respectively of the
proposed OGRA as well. Sources said that the World Bank had desired
that incumbent chairman and members of the NGRA should not be
removed and instead be given the opportunity to head the proposed
OGRA.

The privatization minister was directed to "head a committee to
resolve the issues in consultation with all concerned and bring up
a revised consensus draft of OGRA Ordinance by the second week of
July 2001", said official documents available with Dawn .

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20010617
-------------------------------------------------------------------
Oil import bill up by $600 million
-------------------------------------------------------------------
By Khaleeq Kiani

ISLAMABAD, June 16: Pakistan had to cough up an additional US$600
million over last year's oil spending as POL imports increased by
27.5 per cent during the first ten months (July-April) of the
current fiscal.

According to Economic Survey 2000-01, total imports during the
first ten months of the current fiscal increased by 6.1 per cent.
"The largest component of this increase in imports is accounted for
by the petroleum group (27.5 percent)," the survey notes.

The government had to pay almost $600 million more on petroleum
imports over the last year's level due to higher prices of POL
imports. Despite the non-conducive international environment -
decline in commodity prices and higher POL prices, Pakistan
succeeded in reducing the trade deficit by 1 per cent. Continued
volatility of oil prices remained a concern for Pakistan as higher
prices have kept Pakistan's balance of payment position under
constant pressure. While Pakistan's oil import bill used to be on
average 17 per cent of total imports, it has now increased to 31
per cent of the same.

These shocks have each impacted Pakistan's growth performance in
varying degree during the outgoing fiscal year, the finance
minister claimed. During July-March of this year, the production of
crude oil per day has increased to 57,064 barrels from 56,141
barrels per day during the same period last year, showing an
increase of 1.6 per cent.

The production of gas per day stood at 2,371 million cubic feet
during nine months as compared to 2,217 million cubic feet over the
same period last year, showing an increase of 6.9 per cent. The
total production of gas however increased by 598,590 million cubic
feet in July-March 1999-2000 to 650,727 million cubic feet this
year.

Major policy changes in the gas sector included deregulation of gas
prices by the government and keenness to promote conversion of
petrol vehicles to CNG. More than 700 licenses for installation of
CNG stations have been issued while 165 have already been
established. Total installed capacity of WAPDA for electricity
generation increased by 6 per cent during first ten months of the
current fiscal and stood at 17,772 MW. During the nine months,
49,682 Gwh electricity was produced as against 47,577 Gwh produced
in the corresponding year-ago period. The number of villages
electrified has increased to 69,207 this year from last year's
68,292.

While the electricity sold by WAPDA showed an increase of 16 per
cent, the purchase by WAPDA registered an increase of 59.7 per cent
due to more reliance on IPPs instead of hydel generation due to low
water level. In this way, the value addition in electricity
distribution of WAPDA actually showed a decline of 24.1 per cent.

Power sector has emerged as the largest consumer of gas at 33.8 per
cent followed by fertiliser industry at 24.6 per cent, other
industry at 19.1 per cent, household at 17.7 per cent, commercial
2.9 per cent and cement 1.8 per cent. Household sector emerged as
the largest consumer of electricity accounting for 39,6 per cent of
the total electricity consumption followed by industry at 31.5 per
cent, agriculture at 15.3 per cent, commercial at 5.4 per cent and
other government sector at 7.6 per cent.

The primary energy supplies have increased from 31.968 million TOE
(Ton oil equivalent) in nine months (July-March) of last year to
33.467 million TOE in the same period this fiscal, or 4 per cent
and per capita availability from 0.232 TOE to 0.238 TOE or by 2.6
per cent.

The remaining recoverable reserves of crude on April 1, 2001 were
estimated at 283 million barrels in the country. The recoverable
reserves of natural gas in April this year have been estimated at
25 trillion cubic feet. Estimated coal reserves are at 185 billion
tone which include 175 billion ton or 94.6 per cent of Thar coal
field in Sindh.

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20010623
-------------------------------------------------------------------
Capital market stays weak amid light trading volume
-------------------------------------------------------------------
Staff Reporter

KARACHI, June 22: The KSE 100-share index posted a modest rise of 2
points at 1,353.16, breaching the third resistance level after the
1,370 point barrier as most of the leading base shares ended higher
under the lead of PSO.

Although minus signs dominated the list some of leading shares
managed to put on good gains under the lead of Dawood Hercules,
which rose by Rs3 to 4.10, respectively. Other good gainers were
led by Atlas Lease, Union Commercial Insurance, Universal
Insurance, Fazal Textiles, Al-Ghazi Tractors, Balochistan Wheels,
Pak Elektron and BOC Pakistan, rising by Re1 to 1.75.

Losses on the other hand were mostly fractional barring Shaheen
Insurance, Clariant Pakistan, Sally Textiles, and Attock Refinery,
which suffered fall ranging from Rs2 to 7.00 followed by Pakistan
Oilfields, Berger Paints, Glaxo-Wellcome, and Babri Cotton, off Re1
to Rs1.90.

Trading volume fell to 64m shares from the previous 93m shares
owing to a considerable fall in panic selling and short-covering at
the lower levels but losers maintained a strong lead over the
losers at 109 and 70, with 43 shares holding on to the last levels.
PSO again topped the list of most actives, up Rs4.10 at Rs127 on
17m shares; followed by PTCL, higher 20 paisa at Rs17.90 on 16m
shares; Hub-power, easy five paisa at Rs19.45 on 6m shares; Sui
Northern, lower five paisa at Rs10.25 on 3m shares; and Dewan
Salman, up 25 paisa at Rs17.70 also on 3m shares. They were
followed by WorldCall, off 60 paisa on 2.439m shares; Fauji
Fertilizer, lower 50 paisa on 2.193m shares; FFC-Jordan Fertilizer,
easy 10 paisa on 2.097m shares; MCB, lower 10 paisa on 1.905m
shares; and ICI Pakistan, easy 15 paisa on 1.725m shares.

DEFAULTER COMPANIES: Trading on this counter was relatively dull as
only shares of two companies came in for stray selling. Both Colony
Textiles and Allied Motors, eased by five and 35 paisa at Rs8.25
and 1.90 on 500 shares each.

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20010618
-------------------------------------------------------------------
KSE: pre-budget trading terribly down
-------------------------------------------------------------------
By Muhammad Aslam

Stocks showed signs of recovery at the fag-end of the last week but
the speculative buying and bargain-hunting associated with the pre-
budget trading lacked terribly despite talk of an attractive
incentive package and cut the in corporate taxes.

The reports that the KSE has selected 10 most liquid shares having
a minimum paid capital of Rs1 billion and are being traded through
the central depository system, for forward trading possibly by the
first week of the next month, generated a good bit of optimism as
the system will provide hedging facility against undue risks to the
investors.

The ten selected shares are: PTCL, Hub-Power, PSO, ICI Pakistan,
Fauji Fertiliser, Engro Chemical, Dewan Salman, Sui Northern Gas
Company, Muslim Commercial Bank(MCB) and FFC-Jordan Fertiliser.

The KSE 100-share index though failed to breach through the barrier
of 1,400 points rose modestly to 1,390.07 from 1,368.00 points a
week earlier, a rise of 22 points signalling that the barrier of
1,400 could be breached in the pre-budget session.

The total market capitalization also rose by Rs5 billion at Rs347
billion as compared to Rs342 billion a week earlier as leading
capitalized shares finished higher.

Approval of the $350m credit line by the World Bank was an aiding
positive factor indicating that steady inflow of foreign aid could
give the need push to the economy. Energy shares led the market
advance on active support followed by nine to 14 per cent hike in
oil prices followed by fertilizer and some leading textiles shares
under the lead of Fazal Textiles whose directors decided not to
seek delisting of their share and buyback operations.

Babri Cotton, Amin Spinning and Island Textiles, EFU General, Pak
House International, Pakistan Oilfields, PSO, Abbott Lab, Dawood
Hercules, and many others amid active trading did well. Pakistan
Oilfields, Abbott Lab, Dawood Hercules, Wah Noble Chemicals and
Nestle MilkPak were among the other prominent gainers.

Losers were led by Business Insurance, Gulistan Spinning, Glaxo-
Welcome but largest decline were recorded in Jahangir Siddiqi,
Nazir Cotton, Central Insurance, D.Khalid Textiles, Cyanamid
Pakistan, Kohinoor Genertek and HinoPak Motors. WorldCall
Payphones, which rose to Rs21.50 on the strong speculative support
and received massive battering at the fag-end of the week and was
marked down sharply.

Trading volume fell to 340m shares from the previous 532m shares
owing to mid-week sluggishness and lack of speculative activity.

Volume leaders were led by Hub-Power, PSO, WorldCall, ICI Pakistan,
PSO, PTCL, and FFC-Jordan Fertilizer followed by Fuaji Fertilizer,
Engro Chemical, Bank of Punjab, Nishat Mills, Baifo Industries and
Sui Northern Gas Company.

Back to the top
EDITORIALS & FEATURES
20010617
-------------------------------------------------------------------
Give him a fighting chance
-------------------------------------------------------------------
By Ardeshir Cowasjee

Reading the English transcript of General Pervez Musharraf's words,
spoken from his heart on June 5 at this year's Seerat conference,
it could be said that 'a son is born' for he has in many ways
echoed the creed of Mohammad Ali Jinnah enunciated on August 11,
1947, before the first Constituent Assembly of Pakistan, which he
adhered to up to his death.

The transcript, which was released last week by the government,
should be published in full by our press and distributed to every
school in the county to be made a compulsory text for those few
children of Pakistan who have the opportunity to learn and to
assimilate rightful thinking.

What did he say to the assembled learned pious men? He told them
(and us) a few home truths.

'Where do we stand and which way are we going? We say Islam is a
Deen. It is no mere religion. It provides guidance to us in all
walks of life. And because of this we claim it is superior to all
other faiths. But how do we actually conduct ourselves in life?
Look at Muslims everywhere and in Pakistan, too! Is this what our
Deen teaches us?

'We say Islam is for all times to come because as a Deen it relates
to practical life. But how does the world look at us? The world
sees us as backward and constantly going under. Is there any doubt
that we have been left behind although we claim Islam will carry us
forward in every age, every circumstance, in every land.

'Islam is vibrant and forward-looking. But more than that we claim
it is the most tolerant of faiths. How does the world judge our
claim? It looks upon us as terrorists. We have been killing each
other and now we want to spread that violence and terror abroad.
Naturally the world regards us as terrorists. Our claim of
tolerance is phoney in its eyes...... It is time we took stock of
our position.'

And to the self-righteous, the ignorant know-alls: 'We have no
right to tell anybody that he is bad and we are good, that we are
on the right path and he is on the wrong. Nobody has this right.'

He talked of the 'model society built by the Holy Prophet' and
asked us to try some comparison of our own society with it. Where
do we see justice and equity? Do you see it? In Pakistan? Where?
Look at the performance of the judiciary. Corruption is rampant and
misdemeanours the order of the day. Only 'sifarish' works. Merit
has no taker. The poor are oppressed. To be poor in Pakistan is a
curse.... And let us not talk of character. Can we discover it
anywhere amongst us? Are we honest and truthful? If we had been so
our country would not be where it stands today.'

He then, to use his own words, turned to more mundane 'matters'.
'Pakistan does not live in a void. It is a part of the globe. The
world has actually turned into a global village. No country can
live in isolation or stand-alone. For progress and development,
each country must interact with others.

'Unfortunately we are weak because of the causes I have already
mentioned. We do not suffer from built-in weaknesses. We have all
the resources to develop. We ourselves are responsible for our
weaknesses. As we are weak, we have to keep in step with other
countries. First acquire strength, only then can you tell others to
fall in step with you. We are in no position to dictate to others.
Common sense demands that first you attain the position from where
you can ask others to follow the path you are treading. If you make
a premature attempt you will be crushed and further weakened.'

And even more home truths: 'Seventy per cent of the world's energy
resources are in Muslim countries. But our GDP, of the entire
Muslim Ummah, comes to barely 12 to 13 billion dollars. On the
other hand, Japan's GDP stands at 5,500 billion and Germany's at
2,500 billion dollars. In other words, Germany's GDP is twice that
of the entire Ummah and Japan's four and a half times, though we
are one-fourth of the world's population sitting on 70 per cent of
its energy resources.

'Why is this so? An analysis tells us that it is all because of a
difference in the advancement of human quality, of environmental
development. Other countries have swept forward. Just take
education. In the entire Muslim world there are some 380
universities of which only 25 are of a world ranking. In Japan 1000
universities award PhD degrees. The entire Muslim Ummah can boast
of a total of 500 PhDs. In England, each year 3000 PhDs are awarded
and in India 5000. It is this that should engage our attention.
When we make an assertion we must have strength to back it up.
Wisdom dictates that we should first acquire strength, come out on
top, and then talk.'

And having finally realized the importance of law and order if the
economy is to improve: 'Our first priority is to improve the law
and order situation. Unless foreign investors come in, and our own
people make investments, we cannot make any economic headway. So
far they have not done so, neither foreign nor indigenous
investment has taken place. I confess our government has failed in
this. We have to induce investment... Undoubtedly, law and order is
an important factor which inhibits investment. Nobody will invest
where there is a fear of losing. An investor firstly looks at the
conditions pertaining in a country, particularly at law and
order....

'Religious and sectarian harmony is therefore an inescapable
necessity in Pakistan. It will unite us and bring stability. Only
that will attract others to come to Pakistan. On a recent visit, a
Chinese minister remarked that investment is like a sparrow. It
flies out as a flock of pigeons but returns one by one. So this
sparrow will come to us one by one. We are trying to attract it by
throwing seeds of incentive before it and I ask you to lend us a
helping hand.

'We provoke each other through meaningless statements. We can
improve the law and order situation by merely holding our tongues.
If we become a tolerant society where people with different
outlooks can live peacefully, investors will come.'

He cited one example of the never-ending unnecessary and damaging
boastfulness: 'One hears the boast that 'we will hoist our flag on
the Red Fort' in Delhi, that we will do this, and do that. Have you
ever thought of the consequences of such talk on the Muslims of
India? Some have come to meet me and they have told me of the
repercussions our loose tongues have on their position....'

What does bragging and crowing achieve? 'It provides India with the
excuse to call you terrorists and for others to declare you as
such, so that prospective investors stay far away from your
country. When you go around killing each other, who can consider
Pakistan a safe place for investment?'

Musharraf fired a masterly parting salvo at all the ambitious,
irresponsible people of whatever sect or bent of mind who seek
power through any means: 'Above all, religion should never be
exploited for political gains. Do not sully our glorious faith. I
say this to all those who are guilty of it.'

Were the fearsome fighting Ulema and Mashaikh-i-Kiram listening?
Did they fully comprehend what he told them? We are surrounded by
far too many who would have been comfortable and happy riding with
the hordes of Changez Khan. They need to be reminded in the
language they understand that the days of saddling chargers,
unsheathing swords, and galloping into the sunset are long over.

Musharraf's sincerity is not hidden by his SSG jacket. He is going
to meet a man who commands ten times his own weight and size of
force. Non-existent unity, a jihad mentality and bigotry will help
neither him nor his country. Jinnah's exhortations to his people
had all to do with unity, faith and discipline. The last of the
attributes is what is needed now. And the man needs our help.

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20010622
-------------------------------------------------------------------
The General as President: a tale foretold
-------------------------------------------------------------------
By Ayaz Amir

For as long as Rafiq Tarar - the last prisoner on parole to be
given the freedom of the presidential mansion - was allowed to
perform his ceremonial duties, and for as long as General Musharraf
contented himself with just the title of Chief Executive, the
fiction could be sustained that Pakistan would soon be returned to
democracy - democracy as understood not by GHQ's constitutional
experts but by most people around the world.

With Tarar eased out unceremoniously from that architectural
monstrosity, and Musharraf losing no time in easing himself in,
that fiction lies cruelly destroyed. It took no more than a few
scratches on paper (call them what you will) to bring about this
change - a military decree ousting Tarar and another anointing
Musharraf. The true face of military tolerance lies exposed as a
result. It is a form of tolerance hanging by a thread and in ever
danger of snapping should the higher call of military whim or
expediency so demand.

Right from the start no doubts should have been entertained on this
score. For a military order is a military order and only the naive
will see any other colour in it. Just as a tiger is a tiger no
matter whether it smiles or snarls. Still, there was a pretence in
the air which kept the innocent engaged. The latest charade to
enliven Islamabad's skyline - a move dictated, as old hands would
have guessed, by "the supreme national interest" - performs,
therefore, a salutary function. It strips the flimsy veil from the
hard reality and shows like nothing else could that whatever
democratic freedoms exist in Pakistan, and there are several which
limp on, including the openness of the press, have no institutional
basis more enduring than the sufferance of its military reformers.

What a window this opens on the imaginative qualities of Pakistani
militarism. With its vast experience of reinventing democracy, it
might have been supposed the military's witch-doctors would put a
fresh spin on a reality whose outlines go back to the first
military government of General (later self-appointed Field Marshal)
Ayub Khan. But what are the standard items in Pakistan's longest-
running stage show? Assemblies dissolved, the Constitution
suspended, prime ministers and presidents ousted, provisional
constitution orders signed more readily than a conman would sign
cheques. All these actions taking place against a musical score
whose constant refrain is the steady invocation of the national
interest. The very monotony of this script sheds a frightening
light on the poverty of intellect and imagination holding sway in
Pakistan.

The bemused onlooker might well ask why Third World despots are so
insecure. Not content with the reality of power, why do they also
crave so much its outward form and expression? The only explanation
is that somehow this gives them greater assurance. When General
Musharraf opted for the ungainly title of chief executive he was
making a concession to the democratic sensibilities of the western
world. The military government having gained a measure of
international acceptance, the need for window-dressing has receded
and hapless Tarar, having outlived his utility, has been shown the
door.

It would be wrong to think, however, that it is for his India visit
that General Musharraf has upgraded his status. After all, in Mr
Vajpayee's eyes General Musharraf does not become a more effective
negotiator as president instead of plain chief executive. Rather it
is the closeness of the Indian trip which has served as the
setting, if not the excuse, for fulfilling an ambition which falls
within the familiar ambit of military takeovers in Pakistan.

Does royalty impress in the modern world? When Third World
strongmen heap honours on themselves is the spectacle in any way
considered edifying? Will Pakistan be accorded more respect as a
country because General Musharraf has become president? Will
Pakistan get more money? Will its economic pains abate?

But if General Musharraf's elevation makes no difference to the
outside world, it holds enormous significance for Pakistan. For it
tells us a familiar tale: that history is water off our backs, that
we refuse to learn from the past, and that as a nation we are fated
to retrace the steps of failures and blunders past. While Musharraf
practised a form of self-abnegation and eschewed the temptation of
seizing the presidency, the hope, howsoever dim, could be
entertained that perhaps for once our deviation from the democratic
path may not be long or sharp. With Musharraf succumbing to the
temptation and virtually proclaiming his intention to continue in
office past the Supreme Court deadline for the restoration of
democracy, that hope must be lowered solemnly into the ground.

As a result, we must come to terms with the realization that like
military regimes in the past this one too promises to be around for
a long time. There will of course be the window-dressing of
devolution, local elections and elected bodies further up. But, to
judge by experience, what looks likely is that while the military
will retract its naked claws and go back to barracks, a semi-
authoritarian model like the ones we have had before will be in
place. And at least in its initial days it will be all the tighter
in place for facing no organized political opposition. This is not
clairvoyance or rocket science but the iron conclusions flowing
from the repetitious, Persian-wheel turnings of our dismal history.
Put the same ingredients in the pot, add the same herbs and light
fire of the same intensity underneath, and you will get the same
dish.

Musharraf as interim head of an interim order lent himself to easy
and safe analysis. He could be accepted more readily because he
gave the impression of being a transitory figure. Musharraf as
permanent head of a dispensation stretching into the horizon
represents an altogether more grim undertaking.

Ayub was greeted with hope and fervour when he arrived on the
scene. But when his rule lengthened it gave rise to a feeling of
suffocation. Towards the end the new generation which came of age
in the shadow of his rule just wanted to see the last of him. While
some economists and historians make much of the economic
development which took place under Ayub, the most enduring feature
of his rule was the anger and frustration which it bred.

So too with Zia. With money coming into Pakistan as a result of the
Afghan war, Zia presided over a time of economic ease and plenty.
But after a decade of hypocrisy and false sermons about Islam
people were weary of his rule. By 1988 when with Junejo's dismissal
his democratic experiment collapsed, even generals could be heard
muttering that Pakistan needed a change.

Once again we are embarked upon a voyage similar in spirit to the
odysseys of the past. Once again a general catapulted into power by
the force of blind circumstances is speaking the language of
predestination and personal indispensability: "I feel in all
humility that if I have a role to play for this nation I will not
hesitate whatever decisions are involved. I hold national interests
supreme... I think I have a role to play, I have a job to do here,
I cannot and will not let this nation down..." In other words, by
becoming president he has answered the call of higher duty.

What miracles is General Musharraf seeking to protect? What is his
record in office? Are people enthused with the lumbering
performance of his government? The record of the past eighteen
months, if viewed through real-life spectacles, is an invitation to
humility, not chest-thumping. But then none of this is particularly
surprising or new. All of Pakistan's previous soldier-presidents
spoke in much the same vein. But it is profoundly depressing if we
look at the disasters reaped by Musharraf's famous predecessors.

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20010623
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But can he walk the walk?
-------------------------------------------------------------------
By Irfan Husain

By now we all know that General Pervez Musharraf can talk the talk,
but we would like to know if he can walk the walk, specially as he
has signalled his intention to remain in power for the foreseeable
future by donning the presidential mantle.

His recent speech at the Seerat Conference to a large assembly of
religious leaders and holy men of varying degrees of piety has been
widely applauded by drawing room liberals and editorial writers
across the land. Even the Indian prime minister has joined this
chorus. So clearly, by lambasting religious extremism and telling
the assembled worthies that they were out of synch with the real
world, Pakistan's chief executive struck a responsive chord in most
people worried about the increasing number and power of the zealots
in our midst.

So far, so good. But unless the general plans to do something about
the rapidly multiplying jihadi groups and extremist parties that
are hell-bent on spreading hatred and committing mayhem within
Pakistan and across our borders, there is little point in raising
the issue at all. For months now, the interior minister, the well-
meaning and talkative General Moinuddin Haider, has been travelling
the length and breadth of the country, hinting that the government
is "considering" placing a ban on sectarian parties. So what's to
consider? What is stopping the government from banning these
militant organizations? And if the army can't or won't take
decisive action, why make all this noise and raise expectations?

Take the current campaign to make Pakistan a weapon-free society as
an example. After massive publicity accompanied by regularly
announced threats by the interior minister, the number of weapons
surrendered by the deadline of June 20 would not be enough to arm
even a platoon. Had this government been serious, it has lists of
ethnic and sectarian groups that are armed to the teeth. Most of
these organizations have been infiltrated by our intelligence
agencies. The location of training camps run by jihadi groups for
militants to be sent into Kashmir and Afghanistan is well known.

What is stopping the government from disarming all these highly
dangerous people? And now that the deadline has come and gone, what
does General Moinuddin propose to do? For his information, an
alliance of six religious parties banded together under the
appropriate acronym of IMAM (Ittehad Millat Islamia Mahaz), has
recently rejected the deweaponization campaign. Maulana Sherani,
the Balochistan chief of IMAM, and the Amir of the provincial JUI
(F), has declared that "to keep arms and ammunition by a Muslim was
purely Islamic." He went on to argue that if a person "living in a
border area or a tribal area wants to keep a heavy gun or a tank,
he should have the right." I suppose a tactical nuclear weapon is
IMAM's next logical demand.

Another subject General Musharraf loves to expand on is investment.
In his speech at the Seerat Conference, he asked his audience who
would invest in a country where religious leaders were forever
talking of war. Who indeed? But equally, who would want to invest
in a country in which a bench of the Supreme Court had given the
government a year to abolish interest? Clearly, these honourable
judges are as much out of touch with economic realities as are the
fundamentalists who listened to General Musharraf in stunned
silence. And who would want to invest in a country in which any
two-bit ethnic or sectarian party can bring the commercial capital
to a grinding halt by torching buses and threatening to destroy
businesses if they open their shutters on the days "strikes" are
called?

The only possible justification for a military government is the
fact that it is free to act, unrestrained by legal niceties or the
need to get re-elected. But this one has consistently acted like a
weak coalition government, executing a series of tactical retreats
whenever it has met any opposition. Throughout its 20 months in
office, it has talked tough, but then immediately backed down
whenever the extremists have refused to pay heed.

Take General Musharraf's early days as our saviour as an example:
his photograph with his dogs and his sari clad wife, together with
his publicly announced admiration of Turkey's secular reformer
Mustafa Kemal Pasha, encouraged many of us to think he was a
relaxed liberal. But it took one ferocious statement from Qazi
Hussain Ahmad, the Jamaat-i-Islami chief, to make the good general
back off and announce that there was no danger of a Kemalist
revolution in Pakistan.

Clearly, General Musharraf is enjoying his stint as supreme
commander, and as he relaxes, he becomes more and more expansive in
his pronouncements. The problem is that all too often, the line
between vague and woolly declarations of intent and agenda items
for action gets blurred. When the government declares that it is
going to crack down on the holders of illegal arms, for example, we
expect it to actually take action. However, now that we have a
pretty good idea on how this regime functions, nobody has any high
expectations.

But there are some things that are too important to be put on the
backburner. Indeed, there is simply no space left there. For
starters, the whole extremist, jihadi culture that has put down
root here, together with the arms it has inducted into our society,
has to be stamped out if this country is to survive as a modern
state and not be relegated to the pariah status currently 'enjoyed'
by Afghanistan. Ditto for ethnic groups like the MQM. Both
extremist groupings have a history of violence, and both spread
their hate-filled messages through terrorism and the threat of
force.

This is clearly a tough task, and will require much political will
and determination at every level. General Musharraf still has to
demonstrate that he has the stomach to take on these elements. But
leaders are judged by their actions, not by their words. Making
pronouncements and policies is the easy part; translating them into
reality is far more difficult.

After he has elevated himself to the presidency on the basis of the
role he perceives for himself in the shaping of the future of
Pakistan, General Musharraf needs to reflect on the fact that true
leadership is often about taking the right decisions that may be
initially unpopular but are in the true interest of the country. It
is not about pandering to the lowest common denominator, thereby
gaining fleeting cheap popularity. The new president would do well
to remember this when he goes to India for his talks with Mr
Vajpayee next month.


SPORTS
20010617
-------------------------------------------------------------------
Pakistan crush Spain 6-2 in first Test
-------------------------------------------------------------------

KARACHI, June 16: Pakistan made a victorious start to their
European tour with a convincing 6-2 triumph in the first hockey
Test against Spain at Terrassa.

Pakistan led 1-0 at the breather. Atif Bashir and the penalty
corner expert, Sohail Abbas, played major roles in their side's
win, each scoring twice, while Kashif Jawwad and Mohammad Sarwar
netted one goal a piece. After missing a few chances, Pakistan took
the lead four minutes before halftime when Sohail scored through a
direct drill.

Sohail struck again 11 minutes into the second half. Atif collected
a pass from Naveed Iqbal five minutes later to keep the scoreboard
moving. Kashif made it 4-0 in the 61st minute and Sarwar was on
target five minutes later. Atif sealed the fate the match just two
minutes from time. Pakistan earned six penalty corners, while Spain
had three.-APP

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20010618
-------------------------------------------------------------------
Spain hold Pakistan to a draw in 2nd Test
-------------------------------------------------------------------
Sports Reporter

KARACHI, June 17: Spain came from behind to salvage a 3-3 draw with
Pakistan in the second hockey Test in Barcelona, Spain. Pakistan,
who humiliated Spain 6-2 in the first Test, went 1-0 up through
Sohail Abbas who scored off a penalty corner in the first half.
Right-winger Mohammad Sarwar doubled the lead for Pakistan in the
second period. The Spaniards reduced the margin 2-1 through a
penalty corner but went 3-1 down when Pakistani midfielder Mohammad
Saqlain found the cage.

The hosts scored two more goals on short corners later to level the
game. Both the sides got four penalty corners each.

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20010621
-------------------------------------------------------------------
Waqar's six-wkt haul mauls world champions
-------------------------------------------------------------------

NOTTINGHAM, June 20: Waqar Younis took six wickets to inspire
Pakistan to a thrilling triangular series one-day triumph over
Australia.

Pakistan's innings of 290 for nine at Trent Bridge had looked set
to be marred when the Australians left the field for 20 minutes in
protest after a live firework landed near one of their fielders.
Waqar, however, who claimed the second-best figures in one-day
history of seven for 36 against England at Headingley on Sunday,
ended with six for 59 this time to settle the 36-run win as
Australia were bowled out for 254 in 46.3 overs.

Waugh said: "We got what we deserved. Realistically, we were
outplayed by Pakistan. We have got some work to do before the
final. "Hopefully we can get our revenge." Waqar, though, Man-of-
the-Match for the second game in a row, put the cricket back to the
forefront as he reduced Australia to six for two in his first over.

The right-arm pace bowler had Mark Waugh brilliantly caught behind
off his first ball by the diving Rashid Latif and Matthew Hayden
also fell for a duck. Waqar then bowled Michael Bevan to make it 35
for three. By then, however, wicket-keeper Adam Gilchrist had begun
an extraordinary fight back as 41 runs came off three Waqar overs,
while Wasim Akram was also hammered to all parts. Off-spinner
Saqlain Mushtaq seized the initiative back with two quick wickets,
including Gilchrist, who put on 76 for the fourth wicket with Waugh
before he was comprehensively bowled for a 44-ball 70 which
included 54 in boundaries - 12 fours and a six. Waugh and Andrew
Symonds fought back again with a 77-run stand for the sixth wicket.

They kept the Australians well ahead of the required run rate. But
Waqar returned with another decisive spell. He removed both in one
over, Waugh for 56 - his third half-century of the tournament -
while Symonds was caught at the fourth attempt at deep square leg
by the juggling Imran Nazir, to all but settle the match as the
Australian tail was exposed.

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20010618
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England forfeit match after pitch invasion
-------------------------------------------------------------------

LEEDS, June 17: England conceded their one-day triangular series
match against Pakistan after a pitch invasion by fans caused chaos
just before the end of the game at Headingley.

A steward was stretchered off after being injured in the crush as
hundred of people invaded the pitch and grabbed the stumps with
their team just four runs short of victory.

The incident was a repeat of a crowd invasion involving the same
teams in the opening match of the tournament at Edgbaston, which
led to Steve Waugh of Australia, the other team in the event,
warning that it was only a "matter of time" before a player was
seriously injured.

All three teams had called for more action to control the crowds
after the earlier incidents on June 7. That day, play had been
delayed for 45 minutes before an appeal by Pakistan captain Waqar
Younis led to the crowds finally leaving the playing area, allowing
Pakistan to complete their win.

Sunday's finale wrecked a fine performance by the Pakistan captain
in particular, who took seven wickets for 36 in the second-best
bowling performance in One-day international history.

"It's a very sad day for English cricket," Stewart said. "We saw
some brilliant bowling by Waqar Younis but at the end we saw some
disgraceful scenes. "I don't think the headlines will be about how
great a bowler Waqar is. The ECB (English and Wales County Cricket
Board) can't guarantee player safety so all I could do was concede.
It's very sad."

Pakistan were on 153 for four in the 40th over, chasing England's
156, before the game's premature end. The result condemned England
to their 10th consecutive limited-overs defeat.-Reuters

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20010620
-------------------------------------------------------------------
Pakistan post 290 amidst firecrackers
-------------------------------------------------------------------

NOTTINGHAM, June 19: Saleem Elahi, with 79 runs, inspired his side
to an imposing 290 for nine in their triangular series day-night
match against Australia at Trent Bridge. But the match was hit by
controversy after the Australians left the field for 20 minutes
when a firework was thrown on the pitch.

The incident came after two pitch invasions interrupted matches
earlier in the tournament. Elahi's knock, his highest in One-day
Internationals since his unbeaten 102 on his debut against Sri
Lanka in 1995-96, came off 91 balls and included eight fours.

He provided the anchor role before upping the tempo and, along with
Saeed Anwar (34), Yousuf Youhana (44) and Wasim Akram (29 not out
off 15 balls, including two sixes), made the most of a good Trent
Bridge batting surface after Pakistan won the toss. Elahi and
Youhana provided the backbone of the innings, sharing in a fluent
third-wicket partnership of 93 in 17 overs. Youhana, looking to
work the wrist-spin of Shane Warne to leg, was eventually stumped
by Adam Gilchrist for 44 in the 32nd over. Elahi, back in the
Pakistan side for the rested all-rounder Shahid Afridi, was in fine
touch and reached his fifth one-day 50 in the 24th over with a
sumptuous square drive off fast bowler Brett Lee. He finally
departed in the 36th over, leg before to Warne's top-spinner as he
pushed forward defensively.

The Australian walk-off came with the score on 250 for six after 45
overs. A series of firecrackers were let off in a stand, sending
supporters running for cover, before one cracker landed close to
Brett Lee, fielding on the fine leg boundary at the Radcliffe Road
end. After consulting with umpires Neil Mallender and George Sharp,
Steve Waugh led his team off the field, demanding that his players
safety be guaranteed.

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20010620
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Pakistan tour of England an outstanding success
-------------------------------------------------------------------
By Omar Kureishi

Beset with injuries and tantrums, Waqar Younis and his men have
shrugged them off and focused on team work. That Waqar has led from
the front has helped enormously.

No matter what happens in the final of the NatWest Trophy,
Pakistan's tour of England has been a success, beyond all
expectations. Winning the final will be the icing on the cake and
though the Australians look invincible, if one team can knock them
off the pedestal, it is Pakistan.

There are two ways of looking at Pakistan's thumping win against
England at Headingley. One is to concentrate on the positive, that
is the truly magnificent bowling of Waqar or on the negative, which
was the crowd invasion of the pitch while Pakistan still needed two
runs to win. It was disgraceful and since all of these enthusiasts
were Pakistani supporters, it takes the gloss off Pakistan's fine
win. But first to Waqar. It's all very well to say that the
conditions were ideal for swing and seam bowling, the fact remains
that you have to bowl well to exploit the conditions.

I have seen Waqar and Wasim bowling in tandem, demolishing the
opponents, one of the greatest pairing of fast bowlers in cricket.
But I don't think Waqar has bowled better than that he did at
Headingley or let me say, that this was the original Waqar. He had
England reeling and by the time he had bowled out his ten overs, he
had reduced England to 58 for seven, taking all the seven wickets.

England effected a partial recovery only because Waqar was not
bowling. That the others were not able to exploit the conditions
means simply that the conditions were not decisive and one needed a
bowler of the genius of Waqar to use them with deadly effect, a
point missed by the television commentators who kept on bemoaning
the loss of the toss. And the fact that there was a cloud cover, as
if, this was a freak condition. If England need new players, they
also need new commentators. Bob Willis was so gloomy, he sounded as
if he was reading a sermon at a memorial service.

But there was more than Waqar at Headingley. There was a brilliant
innings from Razzaq, runs of impeccable breeding, a cultured
innings. Abdur Razzaq has been shunted up and down like a goods
train carriage in both the Tests and the One-day Internationals and
appears to have accepted this uncomplainingly. It must surely go to
the character of the young man that he has placed the interest of
the team ahead of his own preferences. I see the future of Pakistan
cricket built around him. He is captain material and he should be
groomed for the job from now.

The tour selection committee does not share the high opinion of
many experts of Imran Nazir.

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20010622
-------------------------------------------------------------------
Germany outclass Pakistan
-------------------------------------------------------------------

Karachi, June 21: Pakistan tasted first defeat of the European tour
when hosts Germany trounced them 4-2 in the one-off Test at
Hamburg.

Pakistan had earlier beaten Spain 6-2 in the first Test in
Barcelona and drew 3-3 in the second Test. Germany's Bjoern Michel
struck two goals while Oliver Hentschel and Christophe Eimar scored
one goal apiece. Ghazanfar Ali and penalty corner expert Sohail
Abbas netted one goal each for Pakistan.

Germany scored all their goals in the opening 29 minutes of the
play. Michel put Germany ahead in 15th minute by converting a
penalty corner. Hentschel doubled the margin with a field goal in
the 27th minute and Michel scored his second goal six minutes from
the interval. Eimar made it 4-0 through penalty corner in 47th
minute.

The Pakistanis got their act together late in the second half.
Ghazanfar reduced the margin in 54th minute with a field goal and
Sohail scored off short corner four minutes from time. Pakistan
will now take part in the four-nation tournament in Hamburg
starting Friday. Other participating teams are Olympic and world
champions The Netherlands, South Korea and Germany.-APP

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20010620
-------------------------------------------------------------------
Pakistan unlikely to produce champion in next 10 years
-------------------------------------------------------------------
By Muhammad Yaqoob and Ilyas Beg

LAHORE,June19: The squash legend Jansher Khan claimed that with
present planning the Pakistan Squash Federation (PSF) would fail in
producing a world champion even in the next 10 years. Criticizing
the PSF for inducting over aged players in the national academy,
functioning at Abbotabad, Jansher said that the federation was
wasting its resources by investing on players who had passed their
peak.

He said that a good player could be produced only by providing him
more and more international exposure and not only practice
facilities. Training was not enough, but international matches gave
confidence to a player which played key role for raising the
strength of a player. He said that the PSF feels proud by claiming
that it was providing eggs and milk to the students of the academy
but claimed these were the basic needs of a player during the
training and advised the federation to arrange international
matches for them if it was serious in producing world class player
from Pakistan.

While replying to a question, Jansher said that he was ready to
take the charge of the national academy if the PSF gave him full
authority. He said that the PSF had offered him to coach the
Pakistani players but added that when he demanded full authority
there was no more call from PSF. He said that he had told the PSF
president Air Chief Marshal Mushaf Ali Mir that if appointed in
charge of the academy, he would also not take dictations from him.
He claimed that if the federation handed over to him six junior
players with full controlling power, he could bring them at least
in the list of world top 10, if not a world champion.

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