------------------------------------------------------------------- DAWN WIRE SERVICE ------------------------------------------------------------------- Week Ending : 19 May 2001 Issue : 07/20 -------------------------------------------------------------------
Contents | National News | Business & Economy | Editorials & Features | Sports
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CONTENTS ===================================================================
NATIONAL NEWS + China may help build Gwadar port project + Pakistan-China ties will continue to grow: Tarar + Pakistan, India test-bed for N-deterrence theory + Lifting of economic sanctions advocated + 20% rise in govt employees salaries + Usmani takes over as Deputy Chief of Army Staff + Parliamentary setup to stay: Musharraf + US may play ties card on India: Just solution to Kashmir dispute + CE okays canals, dams construction + Pakistan not called rogue state: US + Govt decides to withdraw tax exemption: National saving schemes + Provinces agree on refilling reservoirs + Sindh, Punjab water demand fulfilled + Budget on June 16 + Asif's separate trial in SGS case likely --------------------------------- BUSINESS & ECONOMY + Government may abolish withholding tax: Payments and transactions + Shaukat Aziz hints at allowing import of Indian sugar + WAPDA against Rs 700 million waiver to armed forces + Local companies can make foreign investment + AGP audit, account offices to be separated + Relaxation in monetary policy not on cards + SECP chief greeted by demonstrating stock brokers + IMF team meets money changers + Brokers begin confessing faults --------------------------------------- E D I T O R I A L S & F E A T U R E S --------------------------------------- + The Kidney Centre - Nationalized! Ardeshir Cowasjee + Canker in an ideal relationship Ayaz Amir + Welcome to the dark side Irfan Husain ----------- SPORTS + Rains wash way opening day of Lord's Test + Pakistan seek revenge against England + Overrated Shoaib fails to convince team coach

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NATIONAL NEWS
20010518 
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China may help build Gwadar port project
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Reporter

ISLAMABAD, May 17: Pakistan has asked China to help build the 
Gwadar Deep Sea Port which could be to export its industrial output 
from western China to rest of the world. An official of the 
ministry of communications, associated with the negotiations, told 
Dawn that the Chinese response regarding Gwadar Deep Sea Port was 
expected next month, at the time of the Chinese communications 
minister's visit to evaluate the Gwadar Deep Sea and Coastal 
Highway Project.

However, the Chinese have categorically ruled out funding the 
entire Gwadar port project worth US$1.16 billion, are prepared to 
give serious thought to it due to its geo-strategic importance.

To a question the official said that it was true that the US was 
not in favour of the port, but the Pakistan's foreign minister's 
visit to the US just before the Chinese premier's visit was not 
linked to the construction of Gwadar port.

During the four-day visit, the Chinese premier was given a thorough 
briefing on Gwadar port project; 653 kilometres long Coastal 
Highway from Karachi to Gwadar; Thar Coal development plans, and 
Kachi Canal.

Pakistani authorities have gathered indications, though not clear 
enough, that China might fund the Phase-I of Gwadar port (located 
at the tip of the strait of Hormuz/Persian Gulf) with the estimated 
cost of US$248 million.

The policy makers think that the Gwadar port has the potential to 
become a regional hub, an alternative to Gulf ports and also a 
vital link to Central Asian Republics.

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20010513 
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Pakistan-China ties will continue to grow: Tarar
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ISLAMABAD, May 12: President Rafiq Tarar on Saturday described the 
Sino-Pakistan friendship as "a model of inter-state relations", and 
expressed his confidence that " we will continue to co-operate 
closely during the new millennium.

"We seek to build an international order which is just and 
equitable," he said while speaking at a banquet he hosted in the 
honour of visiting Chinese Prime Minister Zhu Rongji.

Mr Tarar said: "Our friendship and co-operation does not merely 
benefit our two peoples, but it is also in the interest of peace, 
security, stability and progress of the entire region. "It is a 
model of inter-state relations. Our two countries adhere to the 
United Nations Charter and to the five principles of peaceful co-
existence."

Mr Tarar said: "We seek to build an international order which is 
just and equitable. We are opposed to regional and international 
hegemony. We work closely together in the United Nations and other 
international fora. " We face many common political and economic 
challenges in the new era. I am confident that we will continue to 
co-operate closely during the new millennium, as we have done in 
the last fifty years," he said.

The Sino-Pakistan friendship, Mr Tarar said, was time-tested and 
deep-rooted. He said Pakistan greatly appreciated the important role 
China had played in the development of Pakistan's economic 
infrastructure. In this context, he referred to major projects 
like the Karakoram Highway, Heavy Mechanical Complex and Chashma 
Nuclear Power Plant, etc, and said these were shining examples of 
Pakistan-China economic co-operation.

Mr Tarar said: " The chinese prime minister's visit to Pakistan is 
a landmark event. It commemorates the 50th anniversary of the 
establishment of diplomatic relations between our two countries. It 
is also the first such high-level visit between Pakistan and China 
in the new century."

"As we celebrate 50 years of our partnership, we cannot forget the 
services and sacrifices of hundreds of Chinese workers and 
engineers who worked shoulder to shoulder with their Pakistani 
brethren in the construction of the Karakoram Highway."-APP

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20010517 
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Pakistan, India test-bed for N-deterrence theory
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LONDON, May 16: Troubled relations between Pakistan and India are a 
"rapidly evolving test-bed for nuclear deterrence theory", the 
International Institute for Strategic Studies (IISS) said in its 
annual report on Wednesday.

The balance of forces in the Subcontinent is opaque, "as expected 
for nuclear-weapons states early in the development and acquisition 
cycles", the London-based think tank said

IISS said that by the end of 1999, non-governmental assessment of 
fissile material stockpiles in South Asia credited India with the 
means to make 65 nuclear weapons and Pakistan to make 39.

"Word has leaked out, however, that India used reactor-grade 
plutonium for one of its detonations, suggesting that its nuclear 
potential - as well as that of any other similarly inclined state 
with a civilian nuclear power industry - is greater than 
anticipated."

The relative balance of capabilities was clouded by reports in June 
last year asserting Pakistani advantages in missiles, nuclear 
weaponization for missiles and command-and-control arrangements, 
IISS said.

"While Pakistani officials assert that they do not intend to 
compete with India in nuclear weapons, they have certainly invested 
heavily in doing so," it said. Although India's nuclear 
infrastructure is far greater, Pakistan's military programmes, 
especially the nuclear and missile ones, have first call on 
available resources, IISS said.

India's more complex political and military circumstances pose a 
more demanding problem: New Delhi will establish requirements 
against Beijing's strategic modernization programmes as well as 
against Islamabad's.

The institute went on to say that the search for stability, 
reassurance and nuclear risk-reduction between Pakistan and India 
was stymied by the absence of official talks last year.

Nuclear risk-reduction and stability talks between India and China 
were frozen last year for different reasons, IISS noted. "Beijing 
refuses to compromise on the subject of India's nuclear tests and 
is unwilling to talk to India about them in any way that might 
suggest equality."

The central diplomatic developments during last year were former US 
President Bill Clinton's trip to the region in March and visits to 
New York by Chief Executive Gen Pervez Musharraf and Indian Prime 
Minister Atal Behari Vajpayee.

"The first Clinton term had followed a 'Pakistan first' approach 
that alienated India without changing Pakistan's policies. "At the 
outset of the second term, Clinton shifted to an 'India first' 
posture, which was chilled by New Delhi's surprise tests of nuclear 
devices."

The freeze in Indo-US relations following the 1998 tests was thawed 
by an extended dialogue, the IISS said, and went on to note that at 
least publicly President George W. Bush appears inclined to follow 
Clinton's lead in South Asia.

"The new administration did, however, tone down its anti-
proliferation position with respect to both countries, courting 
India diplomatically and focusing its harshest criticism on 
Pakistan for its support of Islamic extremists in Afghanistan and 
Kashmir."

The Bush administration may capitalize on the warming of US-Indian 
relations by lifting economic sanctions imposed in 1998, the report 
said.

On the domestic front, India has been relatively stable, though 
rocked by a devastating earthquake in February, it said. A 
corruption scandal led to high-level resignations, but India was 
unlikely to face serious disruptions to its democratic stability in 
the medium term, IISS said.

Pakistan, is by far the more "precarious" state, the report said, 
observing that Gen Musharraf has not been an improvement over Nawaz 
Sharif. -AFP

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20010519
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Lifting of economic sanctions advocated
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By Tahir Mirza

WASHINGTON, May 18: Describing Pakistan and India as the "two 
anchors of South Asia", US Assistant Secretary of State-designate 
Christina B. Rocca on Thursday expressed her belief that sanctions 
against the two countries had outlived their utility and comprised 
an obstacle to America's engagement with the subcontinent.

She said a general review of the sanctions was in progress as well 
as of policy on the subcontinent as a whole, and it would be a 
mistake on the part of the US, India and Pakistan to "allow 
ourselves to be trapped in the mistakes of the past". The time had 
come, she stressed, to move forward, individually and together.

Ms Rocca will be the key official in the State Department dealing 
on a day-to-day basis with the South Asia policy. 

Her remarks came during her confirmation hearing by the Senate 
foreign relations committee, which was presided over by Senator Sam 
Brownback.

It is almost certain after Ms Rocca's remarks that US economic 
sanctions with regard to the subcontinent will soon be lifted, but 
Pakistan also has democracy sanctions against it which are unlikely 
to be withdrawn till the military regime gives way to an elected 
government.

Neither in Ms Rocca's written statement nor during the question-
answer session was Kashmir ever mentioned, nor Osama bin Laden. But 
she did say the Taliban continued to pose a grave threat to the 
people of Afghanistan, to their neighbours and to the international 
community. Afghanistan, she stated, was an "enormous challenge" 
because of its emergence as the "world locus of transnational 
terrorism".

In reply to questions from the committee whether the Bush 
administration would follow the Clinton administration's policy of 
seeking Indian and Pakistan adherence to the CTBT, Ms Rocca simply 
said the US welcomed continuation of a nuclear test moratorium and 
continued to emphasize restraint on both countries.

In her prepared statement, which was fairly non-committal and 
couched in general terms, Ms Rocca described America's friendship 
with Pakistan as of "long standing" that must be sustained and 
enhanced.

"Pakistan", she said, "is an important regional power and an 
important Islamic power. For these reasons and many more, the Bush 
administration is committed to working through difficult economic, 
political and social challenges now facing Pakistan. Where we can 
cooperate, in areas such (as) counter-narcotics, we must continue. 
Where we do not cooperate optimally, for example on Afghanistan, we 
must work harder to show Pakistan the shared threat we face from 
the regime in Kabul."

She also underlined the importance of aid to Pakistan's education 
sector.

On India, Ms Rocca said the Bush administration would continue the 
Clinton policy of substantive bilateral engagement. "The past few 
years have seen the beginning of a transformation in our 
relationship with the world's largest democracy. Now is the time to 
complete that transformation," she said. "India's economic 
potential, following a decade of market reform, is immense. We are 
India's largest trading partner, but bilateral trade remains far 
below where it should be."

She said she would work to devote time to remedying this situation.

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20010518 
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20% rise in govt employees salaries
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Ihtashamul Haque

ISLAMABAD, May 17: A high-level meeting here on Thursday approved 
an across-the-board 20 per cent increase in the salaries of 
federal, provincial and armed forces employees to help offset the 
impact of price hike in the country.

According to informed sources, the meeting presided over by the 
Chief Executive Gen Pervez Musharraf discussed the recommendations 
of the Pay and Pension Committee and approved 20 per cent increase 
in the salaries of federal and provincial governments' employees as 
well as the personnel of the armed force. The relief is to take 
effect from the next financial year.

The meeting, which was attended by finance minister Shaukat Aziz, 
secretary Moeen Afzal, chief of general staff Lt-Gen Mohammad 
Yousef, chief of staff of the chief executive Lt-Gen Ghulam 
Mohammad, and chairman CBR Riaz Hussain Naqvi, discussed and 
approved a comprehensive compensation package for the civil and 
military employees of the government.

The sources said that a decision had also been taken to merge 
various benefits of the senior government employees. There will be 
an amortisation to help the government employees get various 
benefits in their salaries on continuous basis. This will 
considerably take into account the aspect of inflation.

The sources said the government would not be offering housing to 
its employees. They would be offered a substantial amount in cash, 
instead. But some senior employees would be offered cars, and not 
cash.

Various options were discussed in the light of the recommendations 
of the Pay and Pension Committee to offer relief to the government 
employees. Originally, the committee had proposed to offer 30pc 
increase in the salaries. But, this was not accepted in view of the 
poor state of the public purse.

The chief executive told the meeting that instead of offering any 
increase in one go there must be some system that should ensure 
continuity in pay increases in keeping with the rate of inflation 
as well as financial position of the government.

"IMF has not opposed any increase in the salaries of the government 
employees," said a participant of the meeting. When contacted, he 
told this correspondent that IMF was expressing its concern over 
budget deficit.

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20010518 
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Usmani takes over as Deputy Chief of Army Staff
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Reporter

ISLAMABAD, May 17: Lt-Gen Muzaffar Hussain Usmani took charge of 
Deputy Chief of Army Staff and called on the Chief Executive Gen 
Pervez Musharraf here on Thursday, defence sources said.

Before meeting the chief executive, Lt-Gen Usmani also held 
discussion with Chief of General Staff Lt-Gen Muhammad Yousaf and 
Principal Staff Officers at General Headquarters.

Lt-Gen Tauqir Zia assumed charge of Inspector General of Training 
and Evaluation at GHQ, the post where he had been transferred last 
week from the post of Corps Commander Mangla. The post fell vacant 
on the retirement of Lt-Gen Tahir Ali Qureshi.

Lt-Gen Ghulam Mustafa, who has recently been promoted to the rank 
of Lieutenant General, replaced Lt-Gen Zia at Mangla Corps.

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20010517 
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Parliamentary setup to stay: Musharraf
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ISLAMABAD, May 16: The Chief Executive, Gen Pervez Musharraf, said 
on Wednesday that parliamentary system of government would remain 
in tact. "The parliamentary system would remain in tact," he told 
BBC Radio's Urdu Service in an interview.

In reply to a question, the CE said there was no "magic wand," 
rather there could be many formats. He said his government "can 
introduce constitutional changes while remaining within the ambit 
of the mandate given to it by the Supreme Court."

These changes would be brought in in such a way that the framework 
of the constitution could stay maintained, said Gen Musharraf. He 
sated that the government was laying the foundation of a democracy 
which would rise from the grass roots. "Our local government plan 
is a step in this direction."

In the past, the CE pointed out, democracy was not allowed to 
flourish in the true sense. The elected governments came to power 
but there "was no real democracy in the country".

Under the present plan and strategy, "the government wants 
political structuring to start from the grass roots". He said 
democracy which would come into being through this process would be 
an asset for the country. When this democracy would function then 
"I fully believe that a true leadership will emerge," he said. "So 
I have total faith in the future of democracy in Pakistan."

In reply to a question about the future role of the army in 
politics, he said the army would be relieved of its responsibility 
in future. "Army does not want to take part in politics, neither 
should it take part in politics."

He said the protection of the nation's future would be ensured with 
the participation of the armed forces. The army would fulfil the 
basic responsibility assigned to it, he added.

He further said there were circumstances that had forced the army 
to take part in politics. "Army comes when the politicians fail." 
He said: "We are taking steps to ensure that politicians do not 
fail. We are bringing the kind of democracy so that the politicians 
should not fail".

Every political issue had to be resolved through constitutional 
means, he said, adding that one had to look for the "super 
structure" in which the power did not concentrate in a single 
entity.

In reply to another question about the army, the CE said there was 
complete unity and solidarity in its ranks... which was manifested 
in October of 1999.-APP

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20010517 
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US may play ties card on India: Just solution to Kashmir dispute
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Tahir Mirza

WASHINGTON, May 16: The United States on Tuesday gave a clear 
indication that it might be willing to use its new relationship 
with India to encourage a "peaceful and just" solution to the 
Kashmir problem, and expressed concern at the "nuclear genie" that 
has been let out of the bottle in South Asia.

In his first public reference to the Kashmir question since he took 
over as secretary of state in the Bush administration, Gen Colin 
Powell said there was a role the US could play in helping to 
resolve it, and added: "I think the progress we have seen over the 
last several years in relations between the US and India, 
especially, gives us a new entree, a new opportunity to encourage 
the sides to find a peaceful and just solution to the problem of 
Kashmir."

Pakistan has been exerting itself to persuade the US to take a more 
active interest in problem-solving in S. Asia, a proposition that 
is opposed by India.

Secretary Powell's statement, made during the hearing before a 
Senate appropriations committee, is bound to be welcomed in 
Islamabad and provide an opening for Foreign Minister Abdul Sattar 
when he meets Gen Powell in Washington on June 16. Indian Foreign 
Minister Jaswant Singh met the secretary of state here last month.

But Gen Powell, who was replying to a question from Senator Tim 
Johnson on what role the US could play in relation to a settlement 
of Kashmir, especially in view of the fact that the problem was a 
potential source of nuclear conflict, also said it was a "very 
difficult issue". However, given the fact that Washington's focus 
was on both Pakistan and India, the US could be helpful to both of 
them.

The secretary repeatedly underlined the new US relationship with 
India. He said for most of his military career, "India was just 
over there. I mean it was sort of connected to the Soviet Union and 
we didn't pay a lot of attention to it. Our focus was really on 
Pakistan. Well, now our focus is on both of them, and I think we 
can be helpful to both of them, and we really have to make sure 
that this nuclear genie doesn't get any further out of the bottle 
than it already is out of the bottle. On a regular basis, we 
consult with them (Pakistan and India). We make sure they 
understand the seriousness with which we view the potential for 
something getting out of control in the region, and I do think we 
have a helpful role to play because of the new relationship we have 
with India."

Senator Johnson had referred to the continuing conflict between 
India and Pakistan, particularly as relating to Kashmir, and said 
this was destabilising all of South Asia and perhaps the world.

Obviously, the senator said, there was no possibility of imposing a 
solution on sovereign nations, but nevertheless "I would hope that 
there would be increasingly constructive role that the United 
States might play in this particular conflict".

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20010516 
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CE okays canals, dams construction
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ISLAMABAD, May 15: The chief executive, Gen Pervez Musharraf, has 
approved, in principle, the construction of Gomal dam, the Katchi 
canal, Thar-Rainee canal and the Mirani dam to augment water 
resources.

He has directed the finance ministry to raise funds so that Wapda 
can undertake these projects beginning next financial year.

Official sources told APP on Tuesday that the CE had directed Wapda 
to develop small hydropower projects on small falls and barrages at 
different sites to meet water requirements in the country.

Meanwhile, Wapda has identified 591 such sites that can generate 
1000-1500 MW of electricity, besides providing irrigation water. 
Wapda would soon start feasibility studies of projects like the 
Thal reservoir, Sehwan dam, Hingol dam, three flood-fed canals in 
Punjab, the Jinnah hydropower project, Malakand hydropower project, 
Katchi canal, Mithan Kot barrage and other such projects in 
consultation with provincial governments.

Wapda would also set up four hydel projects in the NWFP at a cost 
of $1.5 billion having a capacity of 1,000MW. The water and power 
ministry has completed feasibility report of these projects.

The proposed hydel projects would be Allai Khwar, Khan Khwar, Daral 
Khwar and Battal Khwar. Wapda would start work by the end of this 
year and complete all the projects till 2006.

New small dams would be constructed in all the provinces keeping in 
view the expected shortage of reservoirs in the time to come.

The ministry has constituted a team of experts to expedite the 
engineering and feasibility study of Bhasha dam in the NWFP, Thal 
development project and associates schemes in Punjab, Karachi canal 
scheme in Baluchistan, and Sehwan barrage complex and Rainee canal 
project in Sindh.-APP

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20010515 
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Pakistan not called rogue state: US
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Correspondent

WASHINGTON, May 14: The United States State Department on Monday 
clarified that Deputy Secretary of State, Richard Armitage, called 
Pakistan a "rogue state," when visiting New Delhi.

In a statement issued here following a protest by Pakistan 
government conveyed by Ambassador of Pakistan Maleeha Lodhi, the 
spokesman said that in response to a question at a press conference 
Mr Armitage said the US considers four countries - Iran, Iraq, 
Libya and North Korea - rogue states. He did not call Pakistan a 
"rogue state", he reiterated.

The spokesman said that during the press conference Armitage was 
asked several questions about the US's perception of the global and 
regional security environment. He did say that he was concerned by 
proliferation of nuclear weapons by Pakistan.

Asked whether Deputy Secretary, Armitage conveyed the United States 
concern about India's role in proliferation of nuclear weapons in 
the region, particularly because the race began after it exploded 
the bomb, the spokesman said "of course that is one of the concerns 
we conveyed during our meeting with the Indian officials."

Pakistan embassy source told Dawn that in the meeting with acting 
Assistant Secretary of State for South Asia, Alan Eastham, 
Ambassador Lodhi made a "Demarche" to the United States government.

"We conveyed our deep concern, and we rejected the implication that 
Pakistan was a "rogue state." Pakistan was assured that Mr Armitage 
did not make such comments," the source said.

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20010515 
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Govt decides to withdraw tax exemption: National saving schemes
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Ihtashamul Haque

ISLAMABAD, May 14: The government has decided to withdraw tax 
exemption from all the National Saving Schemes (NSS) and make their 
interest rates market-based from July 1, 2001.

Official sources said here on Monday that the decision has been 
taken to overhaul the NSS with a view to removing tax exempt status 
of all NSS instruments from the next financial year.

All subsidies under the existing export finance scheme (EFS) will 
also be eliminated by mid 2001 for which, the sources said, a 
formal announcement will be made by the finance minister in his 
budget speech likely to be made on June 15 or 16.

The special audit of the Central Directorate of National Savings 
(CDNS) was completed in late 2000, and a follow-up actions on 
resolved issues and accounting problems as well as the audit of 
1999-2000 accounts have been initiated. A new market-based medium 
and long-term instrument, the Pakistan Investment Bonds (PIBs) was 
launched in December 2000 and interest rates on new Defence Savings 
Certificates were formally linked to PIB yields.

The sources said the authorities also intended to accelerate their 
drive to strengthen the financial soundness of the banking system, 
especially the major nationalized commercial banks, and promote 
competition among banks. In addition to ongoing operations, which 
include the closures of non-profitable branches in the rural sector 
and efforts to recover non-performing loans, the government is 
discussing World Bank support plans involving major labour shedding 
of the nationalized commercial banks and the liquidation or merger 
of a number of development financial institutions (DFIs).

However, a substantial recapitalization of some of these 
nationalized banks will be needed before their privatization.

In the financial sector, although important progress has been made 
with regard to national savings and export finance schemes, much 
remains to be done to strengthen the financial soundness and 
efficiency of the banking system, especially the major nationalised 
banks, officials said.

The World Bank, the IMF and the Asian Development Bank (ADB) had 
been assured that the government remained committed to moving 
towards a market-based exchange rate system to achieve the external 
sector objectives. To this end, the State Bank will stop providing 
foreign exchange to the interbank markets to finance petroleum 
imports, limit its interventions to smoothening out the temporary 
effects of bulk transactions in the thin interbank market, and for 
the 2001 as a whole, the central bank will not be a net provider of 
foreign exchange to the interbank market after taking into account 
government debt service payments effected through commercial banks.

The donors believed that a market-based exchange rate will require 
the deepening of the interbank foreign exchange markets and 
cessation of SBP purchases in the kerb market. However, they were 
of the view that given the low level of reserves, these would need 
to be implemented gradually and cautiously. 

As a first step the SBP's practice of dealing for same day value in 
foreign exchange has been changed to two day value for spot 
dealing, in line with best international practices. Nostro limits 
on bank's balances held abroad on account of trading activities 
will be relaxed around mid 2001, the donors were assured.

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20010518 
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Provinces agree on refilling reservoirs
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Faraz Hashmi

ISLAMABAD, May 17: The provinces on Thursday gave a go-ahead signal 
to Irsa to replenish all the country's water reservoirs. "Without 
indulging in controversy or raising objections, the provinces 
agreed on storing water in all the reservoirs," secretary Irsa 
Sohail Ali Khan told reporters after the authority's technical 
committee meeting.

The country has a little over one million acre feet of water stored 
in the three major reservoirs - Tarbela, Mangla and Chashma - which 
is half of the average of the last ten years.

The average of storage of last ten years during the month of May 
was 2.3 MAF, whereas this year the country has only 1.764 MAF of 
water stored in the reservoirs meeting irrigation requirements of 
all the four provinces.

The data of storage released by Irsa showed that 0.366 MAF was 
available at Tarbela, 0.105 MAF at Chashma and 0.763 MAF at Mangla. 
With the rising water level in rivers, the provinces have also 
revised their "indent" (demand). Sindh has increased its indent for 
the next five days to 100,000 cusecs per day.

Chief engineer Irsa Amanullah Khan said they would meet Sindh's 
demand to a "reasonable" extent. On a specific question whether 100 
per cent demand of the provincial governments would be fulfilled as 
the water was a "little" in excess, he said "only reasonable demand 
would be met."

He said Sindh indent was 60,000 cusecs a day which they revised to 
80,000 cusecs a day and their latest indent for five days from May 
16 to May 20 was 100,000 cusecs a day. Punjab, he said, was getting 
106,800 cusecs a day including 42,000 cusecs from the Indus arms. 
The rest of around 60,000 cusecs was coming from Jehlum and Chenab.

In addition to 106,800 cusecs, Punjab was also storing 25,000 
cusecs in Mangla which Irsa officials said the province was storing 
from its own share. The water stored in Mangla would be accounted 
for when it would be utilised, Mr Khan said.

The technical committee of Irsa which was attended by 
representatives of all the four provinces and Wapda also reviewed 
the water availability situation during the Kharif season. "The 
provinces expressed satisfaction over the amount of water being 
supplied to them," he said.

On a question about additional water supplied to Sindh from 
Punjab's share in the month of April on the orders of the Chief 
Executive, he said, "it was a gift of Punjab to Sindh".

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20010515 
-------------------------------------------------------------------
Sindh, Punjab water demand fulfilled
-------------------------------------------------------------------
Faraz Hashmi 

ISLAMABAD, May 14: Sindh and Punjab will start receiving water as 
per their demand from Tuesday as the flow in all the rivers has 
reached a total of 197,000 cusecs.

"With an increase in the flow due to the sharp rise in temperatures 
the storage at Tarbela and Mangla are also being replenished," an 
Irsa official told Dawn.

>From May 15 Sindh will be supplied 60,000 cusecs and, Punjab will 
get 27,000 cusecs from Indus arm, 25,000 from Mangla, and 38,750 
cusecs from Marala.

A technical committee of Indus River System Authority (Irsa) in its 
last meeting had decided to maintain the level of Mangla at 1,106 
feet, until Sindh's objection on storage of water in Mangla is 
disposed of.

With the improvement in water availability, water is being stored 
in Mangla and its level has already gone up by three feet in 24 
hours.

A total of 42,100 cusecs was flowing in Mangla dam from Jehlum 
River on May 14. Out of the total inflow 17,000 cusecs was being 
retained and the rest was being released for irrigation in Punjab.

In the River Indus upstream Tarbela a flow of 81,700 cusecs was 
recorded out of which 50,000 cusecs was being released. The water 
level at Tarbela reached at 1380.1 feet about 10 feet above the 
dead level.

The level in Kabul River had also improved and a flow of 35,300 
cusecs was recorded on May 14. Chenab River has also come alive and 
a flow of 38,750 cusecs was recorded at Marala. 

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20010516 
-------------------------------------------------------------------
Budget on June 16
-------------------------------------------------------------------
Reporter

ISLAMABAD, May 15: Finance minister Shaukat Aziz has said that 
budget for 2001-2002 will be announced on June 16.

Talking to reporters here, Aziz reiterated that the new budget will 
be business-friendly, investment-friendly and growth-oriented. "And 
let us wait for all the details on 16 of next month", he said.

Nevertheless, sources said, the officials of the ministry of 
finance and the Central Board of Revenue had been directed by the 
military authorities to avoid proposing new taxation measures. They 
were told to broaden the tax base, especially by getting hold of 
the 'underfilers' as was recommended by both the World Bank and the 
IMF.

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20010517 
-------------------------------------------------------------------
Asif's separate trial in SGS case likely
-------------------------------------------------------------------
By Our Staff Reporter

ISLAMABAD, May 16: The government has decided to separate the case 
of Benazir Bhutto from that of Asif Zardari in the SGS case, Dawn 
learnt from official sources.

The SGS case which was remanded for retrial by the Supreme Court on 
April 6, would be taken up in the accountability court No 2 of 
Rawalpindi on May 25.

"The government has decided to make a request to the court to 
separate the trail of Benazir Bhutto as she was outside the 
jurisdiction of the court," an official source said.

If the request is allowed, the prosecution would concentrate on 
proving that the pre-shipment inspection contract to the Swiss 
company, SGS, was awarded at the behest of Mr Zardari for 
consideration of 6 per cent of the commission of the total 
receipts.

Under the NAB law, no judgement can be passed against a person who 
is outside the jurisdiction of the court. Ms Bhutto left the 
country a few days before the Ehtesab Bench judgement came on April 
15, 1999.

Ms Bhutto, settled in Dubai and England, is not expected to come 
back. Sources said that the government wanted to separate her case 
so that it would remain pending and whenever she returns, the 
option of reopening it would be available. Experts, associated with 
the case, are of the view that little evidence was available 
against Ms Bhutto in the SGS case.

The only evidence available was that she had presided over a 
meeting at which the pre-shipment inspection contract to the SGS 
had been awarded and that she had allegedly purchased a necklace 
worth 117,000 pounds for which payments were made by Boomer 
Finance, an off-shore company allegedly owned by Mr Zardari.

Ms Bhutto had accepted that she had presided over the meeting, but 
disputed the motive attributed to her for approval of the contract.

She did not accept that she owned the necklace. She is in 
possession of an affidavit issued by Chatilla Jewellers, London, 
that nobody by the name of Benazir Bhutto had purchased the 
necklace.

=================================================================== 
                 B U S I N E S S  &  E C O N O M Y
===================================================================
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20010518 
-------------------------------------------------------------------
Government may abolish withholding tax: Payments and transactions
-------------------------------------------------------------------
Reporter

ISLAMABAD, May 17: The Federal Government is considering to abolish 
withholding tax on sales through public auction, rent of house 
property, gas bills of commercial and industrial consumers and 
commission/discount of petrol pump operators from the next 
financial year.

Official sources in the Central Board of Revenue (CBR) told Dawn on 
Thursday that the proposal came from a nine-member committee, 
formed to recommend amendments in the 1979 Income Tax Ordinance. It 
termed the revenue generated through it as meagre.

The officials concerned in the CBR were of the opinion that they 
have partially shown their unwillingness on the abolition of 
withholding tax on these payments and transactions, however, they 
admitted that the revenue generated through it is very small as 
compared to its total cost. Now, the finance ministry will take the 
final decision in this regard, they said.

They said that the tax collected through commercial and industrial 
gas connections earned very small revenue to the government as 
compared to the expenditure involved on its collection.

Under Section 50 (G) of the Income Tax Ordinance 1979, the tax is 
levied at a rate of Rs 150 to Rs 3000 on commercial and industrial 
gas connections. The net revenue yield through it is Rs 0.017 
billion. The federal and provincial government officers, other 
government agencies, local authorities and embassies are already 
enjoying the tax exemption on it. Therefore, the committee 
recommended to the government to abolish the withholding tax on it.

Sources said that the net yield from the sale of petroleum products 
to petrol pump operators on the value of their commission or 
discount is Rs 0.237 billion. The withholding tax at 10 per cent of 
the commission is collected from the petrol pumps and the committee 
proposed that since the revenue yield is very small and the number 
of recipients of connection is too large, therefore, it should also 
be abolished.

The committee also recommended to abolish the 5 per cent 
withholding tax on sale of property as net yield from this tax is 
0.171 billion, which is very nominal as the equator has already 
been abolished by the former government.

Under 50 (7B) of the Income Tax Ordinance 1979, withholding tax at 
a rate of 7.5 per cent is levied on payment (including advance) of 
rent of house property (including rent of furniture, fixture and 
services), which the committee proposed is adjustable and need to 
be abolished. The sources said that revenue generated through this 
tax is Rs 0.204 billion, which, they said, is too less and tax can 
be easily collected on global income basis.

The withholding taxes were first introduced in late sixties, since 
then there has been growing emphasis on expanding the withholding 
tax net, a major source of income tax collection. In 1979, there 
were only seven kinds of payments/transactions subject to 
withholding taxes, which increased up to 19 in 1994-95 and 25 in 
1999-2000 (including an on bonus shares, which remain dormant).

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20010516 
-------------------------------------------------------------------
Shaukat Aziz hints at allowing import of Indian sugar
-------------------------------------------------------------------
Parvaiz Ishfaq Rana

KARACHI, May 15: The Federal Finance Minister Shaukat Aziz has 
hinted at importing sugar "even from India" if the domestic market 
situation warrants such a move.

"The government's priority is to keep sugar prices under control, 
for which we can provide foreign exchange and can even consider 
reduction in import duty", the minister informed Raees Ashraf Tar 
Mohammad, Chairman, Pakistan Commodity Importers Association, in a 
telephonic conversation from Islamabad on Tuesday.

Raees has been in touch with top government functionaries in 
Islamabad for last many days on supply and prices of sugar in 
domestic market, with particular reference to import prospects and 
duty structure.

Dispelling the impression that a change in sugar policy was on the 
anvil, the finance minister said, "no decision has yet been taken 
in this regard and assured to consult the stakeholders - growers, 
importers and sugar industry - before taking any such decision.

Rasees Ashraf told Dawn that the minister informed him that the 
government was keeping a close watch over the sugar stocks and its 
prices and would safeguard the interest of consumers, as well as 
other stakeholders in the trade.

The finance minister also assured to look into the matter relating 
to a sugar consignment held-up at Wagah border following government 
decision to ban imports from India about three months back, the 
Chairman PCIA said.

The government allowed around 350,000 tons of sugar import from 
India but some ugly development on political front compelled 
Islamabad to immediately ban further imports from India.

As a result of it only 100,000 tons of refined sugar could reach 
Pakistan and around 60,000 to 70,000 tons was in the pipeline. The 
minister also hinted at allowing import of balance quantity of 
around 200,000 tons, if such a situation arises, Raees Ashraf said.

Presently, the refined sugar in open market is available at the 
rate of Rs23.75 per kg, but some analysts feel that there would be 
a shortfall of around 0.3 million tons to meet the country's 
consumption of around 3.4 million tons.

This year the local production of sugar stood at around 2.4 million 
tons and adding to 0.6 million tons extracted from imported raw 
sugar and 0.1 million tons of Indian commodity, a shortfall of 
around 0.3 million tons is being feared.

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20010514 
-------------------------------------------------------------------
WAPDA against Rs 700 million waiver to armed forces
-------------------------------------------------------------------
Khaleeq Kiani

ISLAMABAD, May 13: Power utility WAPDA has opposed to write off 
around Rs700 million the armed forces are required to pay as late 
payment surcharge on electricity dues.

Sources in the finance ministry told Dawn that various limbs of the 
armed forces owed slightly over Rs3 billion outstanding dues to 
WAPDA till early last month. The total amount rose up by another 
Rs700 million due to accumulation of late payment surcharge.

Under the normal procedure, all the utilities including telecom, 
gas and electricity are entitled to charge late payment surcharge 
from all consumers in case monthly bills are not paid within the 
given date.

The general headquarters (GHQ) had asked the chief executive to 
waive the late payment surcharge on electricity dues in view of 
this undue cash burden. WAPDA Chairman Lt. Gen. Zulfiqar Ali Khan 
has however objected to the proposed waiver on the ground that late 
payment surcharge was a uniform policy and a right of the utility 
to be compensated in lieu of late payment.

WAPDA is of the view that it has never been given a special 
treatment in financial matters and instead the federal government 
has been providing loans to it on much higher interest rates when 
compared with original loan secured by the government.

In some cases, WAPDA is charged at as high as 18 to 24 per cent 
interest rates on loans and aids the government obtained from the 
World Bank, Asian Development Bank (ADB) and Kuwait Fund etc at 1.5 
per cent service charges.

Official sources said that the late payment surcharge could not be 
changed to the benefit of one consumer group otherwise it would set 
a wrong precedent for others to follow. 

WAPDA is of the view that in case the government wanted to give any 
relaxation to any consumer, the finance ministry should do so from 
its own resources or pay compensation to the utility. A final 
decision on the subject is expected within a couple of days, 
official sources said.

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20010518 
-------------------------------------------------------------------
Local companies can make foreign investment
-------------------------------------------------------------------
Reporter

KARACHI, May 17: The State Bank on Thursday allowed tax paying 
Pakistani companies to make equity investment abroad through inter-
bank foreign exchange market. SBP said in a press release that the 
companies could also make equity investment abroad from the funds 
available in the foreign currency accounts of the investors held in 
Pakistan or abroad.

The companies would only be asked to repatriate to Pakistan the 
profits and dividends earned on their foreign investment. The SBP 
decision came after the federal cabinet on Wednesday gave a go-
ahead to the local companies to make equity-based investment 
abroad. Now tax paying Pakistani companies can invest their funds 
abroad for setting up joint industrial ventures and for seeking 
undertakings in any business or listing on foreign stock exchanges.

"This policy has been enacted to encourage leading Pakistani 
companies to compete in the international market place and benefit 
from the growing opportunities in world trade." Foreign investment 
made by Pakistani companies will also create a demand for Pakistani 
managers, labour, locally built equipment and machinery and 
services in addition to earning foreign exchange for the country.

Pakistani financial sector institutions, consulting firms and IT 
companies are particularly suited to avail of this facility as 
these ventures are relatively skill-intensive and require small 
capital outlays. Bankers said the central bank might issue a 
detailed procedure to be followed for making foreign investment in 
a day or two.

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20010517
-------------------------------------------------------------------
AGP audit, account offices to be separated
-------------------------------------------------------------------
Reporter

ISLAMABAD, May 16: The Federal Cabinet on Wednesday approved the 
separation of audit and accounting functions of the office of 
Auditor General of Pakistan. The decision has been taken to accord 
greater authority and autonomy to AGP office.

The meeting, presided over by the Chief Executive, Gen Pervez 
Musharraf, also authorized the State Bank of Pakistan to allow 
equity-based investment abroad, by resident Pakistani companies. 
"The separation of audit and accounting functions was one of the 
conditionalities of the IMF and the World Bank which we have today 
implemented in the larger interest of the country", said Additional 
Secretary, Ministry of Finance Dr Waqar Masood Khan.

Dr Khan, who is also spokesman of the ministry of finance, informed 
Dawn, this decision is one of the most important steps to improve 
the overall governance and the country's financial management.

He said, IMF and World Bank had been asking Pakistan for the last 
six years to separate the functions of audit and account but it 
could not be carried out. "The decision has been taken by this 
government as it does not have any political interest", he said 
adding, "now there will be real transparency in the financial 
affairs of both centre and provinces.

He said it is not true to presume that this decision of the Cabinet 
will promote federalisation and will undermine the authority and 
powers of provinces. Dr Khan said, Cabinet has ensured that 
employees of provincial governments and as well as those in 
districts, working in accounting departments, will not be removed 
from their jobs on account of this decision.

To establish a credible distance and separation between audit and 
accounting functions, Cabinet approved two draft ordinances vesting 
greater authority and autonomy in the office of the Auditor 
General, while creating a separate office of the Controller General 
of Accounts for preparing and maintaining accounts of federation, 
provinces and district governments.

The Controller General of Accounts will accredit all payments and 
withdrawals from government funds against approved budgeted 
provisions through offices at federal, provincial and district 
levels.

While approving draft laws on the subject, Cabinet noted that the 
establishment of a separate office of Controller General of 
Accounts was in line with the principle that the authority which 
prepares accounts ought not certify the same as this creates 
conflict of interest.

 As part of governance reforms, the government had established a 
committee in February last year on separation of audit and accounts 
headed by H.U. Baig, former finance secretary. This decision has 
been taken on committee's recommendations, which includes members 
of the profession from public and private sectors. The two draft 
ordinances were formulated in consultations with the committee and 
the Auditor General of Pakistan.

The Cabinet decided to allow State Bank of Pakistan to grant 
permission for equity-based investment abroad by resident Pakistani 
companies. Such investment will also create a demand for Pakistani 
managers, labour, goods and services abroad in addition to earning 
foreign exchange through repatriation of profit and dividends. It 
will discourage Hundi as channel of remittance and encourage 
funding through official channels.

The Cabinet approved initiation of negotiations for an agreement on 
avoidance of double taxation and prevention of fiscal evasion of 
taxes on income between Pakistan and Jordan. The purpose is to 
clearly define the tax rules in case of cross-border business 
transactions.

Signing of an agreement between Pakistan and Iran on co-operation 
in the field of quarantine and plant protection was also approved 
in the meeting. The cabinet gave its consent to introduction of a 
Tariff Ticketing System in Islamabad Capital Territory, for 
improvement in regulations and collection of fines from the 
violators of traffic laws.

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20010517 
-------------------------------------------------------------------
Relaxation in monetary policy not on cards: SBP-Fed rate-cut 
-------------------------------------------------------------------
By Our Staff Reporter

KARACHI, May 16: The State Bank of Pakistan (SBP) is not going to 
ease off its monetary policy in line with the trend prevailing in 
the international markets.

"Easing off of monetary policy is not on cards," SBP Economic 
Advisor Dr Mushtaq A. Khan told Dawn here on Wednesday. He was 
asked over telephone whether SBP was going to lax monetary policy 
after a half per cent cut in the US benchmark interest rates on 
Tuesday.

The half a per cent lowering of short term benchmark interest rates 
as well as discount rates by Federal Reserves on Tuesday is the 
fifth such move during this year aimed at reinvigorating the 
sluggish US economy. The central banks of Japan and European Union 
have also eased off their respective monetary policies recently to 
ward off a global economic slowdown as a result of the sluggishness 
in US economy.

"In view of the existing stabilization programme the interest rates 
in Pakistan are not linked with the international markets," Dr 
Khan. He was referring to the $596 million IMF standby credit 
programme currently in operation in Pakistan. "We are on track of 
the IMF programme which should take us to Sept-Oct this year," he 
said. Pakistan entered into the 10-month programme at the end of 
November last year and has so far got two trenches of the $596 
million programme. An IMF mission is currently in the country to 
see if Pakistan has done enough home work to qualify for getting 
the third and final tranche.

Pakistan has secured the two trenches after meeting a number of 
tough IMF conditions that effectively leaves no room for the 
country to lax its monetary policy. What exactly makes it very 
difficult for Pakistan to lower interest rates in line with the 
international trend is that the Fund wants the country to manage 
its quasi-free exchange rate regime through interest rates. Of 
course a country like Pakistan with a huge negative balance of 
payments cannot go for lowering interest rates at a time when this 
is bound to have immediate adverse impact on its currency.

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20010515 
-------------------------------------------------------------------
SECP chief greeted by demonstrating stock brokers
-------------------------------------------------------------------
Dilawar Hussain

KARACHI, May 14: Securities and Exchange Commission of Pakistan 
(SEC) Chairman, Khalid Mirza was greeted by a demonstrating crowd 
of brokers and their agents, when he reached the Karachi Stock 
Exchange on Monday.

Mirza had sought to hold a meeting with members of the bourse, but 
none except 10 or 12 of the 200 strong-member fraternity gave him 
the listening ear; the remaining either abstained or joined the 
crowd of around 100 people who had gathered outside to voice their 
displeasure at the role of the regulator.

Never on an exceedingly cordial terms, the relationship between SEC 
and the KSE soured further since February, after the newly 
appointed Managing Director Noman Ahmed started calling shots, 
which brokers allege were being 'dictated' from Islamabad. "MD 
should be responsible to the board and not the SEC", one irate top 
broker, who asked not to be identified, told Dawn, adding that a 
three-fourth majority of directors should have the power to fire 
him (the MD).

Similarly, he said, the non-member directors were playing to the 
tune of the Regulator, since the members had been stripped of the 
authority to appoint them. He affirmed that these were the issues 
at the heart of the problem. "T+3 system, transaction fee and 
others were the matters of secondary importance", he argued.

When questioned, SEC chairman Khalid Mirza told Dawn on Monday 
evening that all of those matters (appointment of MD, outside 
directors) had earlier been amicably settled with the exchange's 
leadership. He contended that MD had to be independent of the 
members so as to enforce the self-regulatory role of the exchange. 
KSE, he said is a 'mutualised body', and it was the responsibility 
of the Regulator not only to protect the interests of the members, 
but also the issuers of capital and the investors. "Just as the 
central bank approves the appointment of CEO for banks, the SEC has 
the authority to approve the MD of bourses, so what's wrong with 
that?", he queried.

Mirza claimed that the transaction fee proposed to be levied at 
0.0009 per cent was one-eleventh of what India charges and the 
'lowest fee in the world'. About the T+3 System, he said, the 
bourse had itself proposed to adopt it in a meeting on June 12, 
2000. While Mirza contended that the exchange was adopting the 
system at "its own pace", a major member disagreed saying that the 
bourse wanted to prepare the ground work before launching it in 
June.

Mirza said that with the installation of an independent CEO; 
implementation of brokerage registration rules; T+3 system and 
financial autonomy of the SEC, the Pakistani capital market would 
be ahead of all of South East Asia in the enforcement of 'last 
instalment' of the capital market reforms under the ADB's 
'International Financial Standards'. He claimed that this fact was 
lauded by the ADB at its meeting in Hawaii, conducted under the 
'Financial Stability Forum', where he had presented a paper on the 
Pakistan capital market.

Meanwhile, a stock broker lamented that the community did not 
oppose the SEC when it set out to change the capital adequacy 
regulations; the revision of capital balance and it even conceded 
to the SEC demand that the chairman of the bourse should not be the 
chairman of the CDC. "But the MD should be accountable to someone", 
he insisted.

When Mirza was asked how he thought the thorny issues could be 
resolved, he said he would push along with his reforms programme, 
notwithstanding. He regretted that the brokers did not agree to his 
invitation to a dialogue. The overwhelming majority of stock 
brokers do not clearly see eye to eye with the Regulator, which 
sets the two sides on a coalition course. In the absence of a face-
to-face interaction between the two, 'a third party' intervention 
seems inevitable.

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20010516 
-------------------------------------------------------------------
IMF team meets money changers
-------------------------------------------------------------------
By Our Staff Reporter

KARACHI, May 15: Money changers on Tuesday told the visiting IMF 
mission that the Fund must restore previously-approved long-term 
loans for Pakistan to pull it out of financial crisis.

Senior representatives of Forex Association of Pakistan met three 
of the five-member delegation at State Bank office and gave them a 
briefing on how open currency market works in this country. Two of 
them were (i) Jean Lea Dem and (ii) Marcio Ronci. The name of the 
third member of IMF delegation could not be known.

The Association team, led by its president Malik Bostan, told the 
IMF people that by blocking the inflow of already-approved long-
term loans for Pakistan the IMF has complicated financial woes of 
the country, Bostan told Dawn on telephone. He said FAP 
representatives also made it clear to the IMF team that some 400 
licensed money changers had nothing to do with hundi system- the 
network involved in informal transfer of foreign exchange.

"We told them that almost the entire inflow in open market is in 
the shape of foreign exchange brought home by overseas Pakistanis," 
said Bostan. He said the IMF people explained to the money changers 
that the Fund wanted proper use of foreign funds by Pakistan. He 
quoted them as saying that unless the country channels foreign 
funds into the areas vital for economic reform how can it get rid 
of foreign debts.

Bostan said FAP members explained to the IMF team how open currency 
market operates in Pakistan, and told them that money changers in 
Pakistan do not run any foreign branches or have links with money 
changers in international markets except for those in Dubai. He 
said the Fund people were also briefed about the reasons for recent 
cancelling of licences of 18 money changers by the SBP. "They just 
listened to and made no comments," he said.

SBP had cancelled licences of 18 money changers for their failure 
in providing sale and purchase data for six consecutive weeks.

Bostan said FAP members informed IMF team about the recent 
arrangement between the state-run National Bank and licensed money 
changers wherein the latter sell all foreign currencies to the NBP 
that in turn export it to Dubai.

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20010515 
-------------------------------------------------------------------
Brokers begin confessing faults
-------------------------------------------------------------------
Khaleeq Kiani

ISLAMABAD, May 14: Weak brokers and stock agents have started 
volunteer declaration of their wrong doings in the share dealing of 
listed companies in the wake of measures introduced by the 
Securities and Exchange Commission of Pakistan (SECP).

Sources revealed that the chief executive of International 
Investment and Financial Services Limited (IIFSL), who also deals 
in number of shares, has reported large scale fraudulent 
transactions in share trade that could lead to liquidation of over 
a dozen companies.

Documents available with Dawn reveal that head of IIFSL has made 
voluntary confessions before the SECP on the condition of 
forgiveness and official protection, as he received life threats 
from the management's and owners.

The case has come to light after the recent default and arrest of 
former President Lahore Stock Exchange (LSE), Nosher Dastoor. The 
company has a chain of concerns including a leasing company, a 
mutual fund, a Modaraba company and sizeable shares in other 
institutions.

The official said that he placed the entire shareholding of these 
companies at artificial rates as high as 70 to 80 per cent per 
annum. "The entire cost of BADLA was met by the company's fund 
thereby, distorting the financial position of the company. In 
consideration of entering into BADLA transaction. I get the 
kickback outside the books", said the official in his statement.

He said that he transferred his personal loss of Rs1 million in the 
books of mutual fund in 1999-2000 but could not be detected by the 
auditors. He said that he single handedly disposed off the entire 
shareholding of the leasing company at a fairly low price on the 
wishes of the management without obtaining board approval.

The official also caused a loss of Rs13 million to the national 
exchequer in taxes and tailored to conceal the loss of Rs40 million 
in the shape of under provision of receivables hiding badla cost 
under trade creditors.

Back to the top
EDITORIALS & FEATURES
20010513 
-------------------------------------------------------------------
The Kidney Centre - nationalized!
-------------------------------------------------------------------
Ardeshir Cowasjee

ON the morning of February 11, a Sunday, six members of the board 
of governors of The Kidney Centre declared themselves to be shocked 
and grieved having read in this newspaper of record that the Centre 
they had founded, funded or helped to fund, built and nurtured for 
some fifteen years had suddenly been nationalized by an ordinance 
promulgated by the governor of Sindh. They knew nothing of the 
background, or why, or by whom, the governor had been persuaded to 
act.

The six were Mian Mohammad Rafi, chairman, Haamid Jaffer, vice 
chairman, members Marriana Karim, Mushtaq Chhapra, Iftikhar Hussain 
and Munawwar Habib. Two other members, Dr Syed Ali Jafar Naqvi and 
Dr Mir Rehman Ali Hashmi were neither surprised nor shocked for it 
was they who had instigated and engineered the promulgation of the 
nationalization ordinance without the knowledge or consent of the 
board.

It took the six shocked members four days to obtain a copy of 
Ordinance No.XI of 2001 of February 10, which effectively announced 
the virtual nationalization of the Centre. The purpose of the 
founding of the Centre was "to build, construct, erect, maintain, 
administer and operate a hospital together with such ancillary 
facilities as may be deemed appropriate for the prevention, cure 
and treatment of renal diseases; and, inter alia, to make provision 
therein for the free treatment and/or at concessional rates of poor 
and deserving patients."

The governor's ordinance changed the purpose "to provide for care 
and attendance of persons requiring medical attention relating 
exclusively to renal diseases." The poor have been swept away. It 
is silent on free treatment or treatment at concessional rates of 
the poor and needy suffering from any ailment. It lays down eight 
other functions connected with teaching, research, co-operation 
with government and international organizations. It specifies that 
the institute will take all actions which may further it as a place 
of education, learning, research and consultancy. It names Dr 
Jaffar Naqvi as chairman of a nominated predominantly ineffective 
governing board of non-productive government functionaries.

By February 17, two board members managed to get through to 
Governor Mohammadmian Soomro. He arranged for them to meet 
provincial health minister, Major-general Ahsan Ahmad. The minister 
displayed astonishment at the discovery that there existed an alive 
and functioning board of governors of the Kidney Centre, (one 
member of which is at the Centre every day), the majority of whom 
were unaware of the circumstances under which the nationalization 
ordinance was promulgated and notified. He immediately suspended 
the implementation of the terms of the ordinance.

Minister Ahmad was regretful and solicitous. He indicated that two 
doctors had conveyed the impression that there was no functioning 
board, and he told the two members that it would merely take the 
governor's signature to redress the wrong and repeal the ordinance. 
He asked the board to file an appeal for the repeal. Three members 
(Karim, Chaapra and Hussain) did so on February 21, personally 
delivering the appeal to the minister who then asked them to let 
him have a resolution stating that the board had neither resolved 
nor instigated the promulgation of the ordinance and did not 
support it. This was done on February 27.

The minister later informed them that repealing the ordinance might 
be embarrassing for the government, that they should seek legal 
advice and let him have a draft of an amending ordinance which in 
effect would comprehensively undo the damage done by Ordinance 
No.XI/01. This was done, and copies of all documentation involved 
in the repeal were given to Governor Soomro, who assured the board 
members that the required amending ordinance would soon be 
promulgated and the matter resolved.

On March 12, the Minister convened a full board meeting at his 
office. He categorically asked Dr Naqvi as to why the government of 
Sindh had been misled by him, to which Dr Naqvi could make no 
reply. Each member present was asked if he/she supported the 
ordinance. Five who were present (Rafi, alternate governor Nasir 
Jaffer, Karim, Chaapra, Hussain) said no. Naqvi and Hashmi did not 
utter. The meeting was concluded by the minister declaring that the 
matter would be placed before the governor who was then on Haj.

Meanwhile, as the government's shenanigans became known, private 
sector funds on which the Kidney Centre depends dried up. All that 
has come in since February is a trickle of what was promised prior 
to the government's misadventure. Representing my family and 
friends who had made donations upon my recommendation and guarantee 
that money would flow into a privately-run, well-managed 
organization, I asked the board to return our unspent money, of all 
donors to the private Centre prior to its nationalization, so that 
they could divert their support to another private sector 
institute.

The draft of the repealing ordinance was sent to the minister early 
in April. On his return, the governor convened a full board meeting 
on the 9th, at which the board requested me to be present to speak 
on behalf of the donors who wished to retrieve their money, money 
the Board was honour-bound, under the prevailing circumstances, to 
return. Before I went into the meeting, Shahid Feroze of PERKS, on 
behalf of the governor, asked me to remain silent as I was not a 
board member. I replied that if the governor decided to repeal the 
ordinance I would remain silent, otherwise I would have to speak 
up.

At the meeting, I duly remained silent as the governor declared 
that the damaging ordinance, inadvertently promulgated would be 
repealed. He was thanked by all present.

Dr Naqvi, secretary and member of the board, though invited, chose 
not to attend the meeting. He had an office at the Kidney Centre, 
and the day after the governor's meeting he collected the office 
files and left, later declaring to well-wisher Doctor Rashid Jooma 
that he was a man of principles and once he had turned his back he 
would never return.

His absence from the scene has made no difference to the 
functioning of the Centre which continues to be managed by the 
administrator in accordance with the ISO standard certification 
9002.

On April 13, health minister, General Ahmad called a press 
conference at which he conveyed the government's decision to repeal 
Ordinance XI. But for reasons not disclosed, the governor did not 
keep to his word. The repealing ordinance was not promulgated. He 
asked his principal secretary, Brigadier Akhtar Zamin, to inform 
the Board in his own language that the government found it 
embarrassing to promulgate such an ordinance and that since the 
Centre had been built on army land the army wished the board to be 
enlarged and packed with government flunkies, as described in Ord 
XI, so that the in-fighting amongst the board members may end. The 
brigadier was told there was no in-fighting, no divergent opinions 
since Doctor Naqvi had left, and that the Centre was functioning 
normally and efficiently. The members were given time to consider 
the board's expansion and were told that in case they did not agree 
the land and the Centre standing thereon would be taken over by the 
army.

Brigadier Zamin was obviously unaware that when the army land was 
leased in perpetuity the original charter of the Centre provided 
for the quartermaster general of the army to be a member of the 
board. At that time the then QMG sensibly decided that he did not 
wish to interfere in its affairs. As far as the board is concerned, 
it has never had any problem with the QMG representing the army, 
sitting on the board, or deliberating with it.

Stalemate. On May 10, I called on provincial health minister Ahmad. 
No joy. Our governor, following the political pattern set by such 
men as PPP Commuter Qaim Ali Shah, spends most of his time flying 
in the governor's plane between Karachi and Islamabad. He returned 
late in the evening of May 10. I tried to see him on May 11, 
without success. However, he was good enough to telephone me that 
afternoon to tell me that he could not repeal the offending 
ordinance and had acted as he had because of pressure from General 
Headquarters. I reminded him that there was only one General who 
mattered now, General Pervez Musharraf, and that there was no such 
being called Headquarters. It was a mere conglomeration of barracks 
and buildings, old field pieces guarding its gates.

As a result of this government's stance, the privately funded 
efficiently operated educational and health organizations (e.g. 
LRBT) are worried. As a first consequence, Razak Taba's family and 
friends who were in the process of donating Rs.75 million to the 
Jinnah Hospital for the establishment of an MRI centre have 
withdrawn. The government on the one hand, is privatizing and on 
the other, nationalizing and this is bound to shake the confidence 
of private sector donors as well as the World Bank, that unpopular 
maai-baap of beggars and insolvents.

This is no time for nepotistic practices. General Musharraf is 
talking to Zhu, the premier of our re-emerging ally, which should 
remind him of that old saying of Confucius: He who fears losing 
face has no face to lose.

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20010518 
-------------------------------------------------------------------
Canker in an ideal relationship
-------------------------------------------------------------------
Ayaz Amir

The canker in an ideal relationship What could be more enduring or 
stable than our friendship with China? Yet somehow we still end up 
protesting too much about it. Basking in the glow and warmth of an 
old and trusted relationship is one thing. But acting in a manner 
that at times comes suspiciously close to hysteria only goes to 
reveal a sense of insecurity.

For a government that is read lectures in democracy by the West it 
is no doubt tempting to play up the iconic status of its ties with 
China, especially a China whose shadow looms ever larger on the 
world stage. Even so, it helps to remember that while China fills a 
vital space in Pakistan's quest for international support and 
sympathy, it is in no position to cover all of Pakistan's needs.

The relationship between Israel and the US is strategic in every 
sense of the word. The US makes sure Israel enjoys military 
preponderance over its neighbours. When Israel goes to war US 
support is automatic and comprehensive.

There is a material aspect to the relationship between Pakistan and 
China. But its essence is emotional and sentimental, fulfilling 
Pakistan's psychological need for an external anchor to shore up 
its position against India. This need was first met by the United 
States which not only helped build up the Pakistan military but 
also, in lieu of Pakistan's client status in the cold war, 
strengthened Pakistan's self-esteem as it sought equivalence with 
India. When the US disavowed this role, Pakistan sought to fill the 
breach by turning to China.

To be honest, Pakistan with its constant and reiterative whining 
over Kashmir and other problems can test the forbearance of friend 
and foe alike. But China has conducted itself in exemplary fashion, 
much like a patient psychoanalyst, lending a sympathetic ear to 
Pakistan's often baffling troubles and proffering, when the 
occasion arises, calm and soothing advice. But it is in no position 
to act as nanny to Pakistan as the US acts towards Israel. Not so 
much from want of inclination as for lack of means. China has not 
the wherewithal - or, to be fair, the reasons - to support us the 
way the US reinforces the bastion of its interests in the Middle 
East.

Chinese weapons we buy out of poverty or necessity, not as a matter 
of first choice. When we have the money, we do our arms shopping in 
the West: F-16s from the US, Agosta submarines from France, even 
tanks from the Ukraine, and so on. Our trade is with the West, our 
sturdy begging bowl tipped in that direction. With China we discuss 
project aid, undoubtedly useful but not urgent. With the IMF we 
talk economic survival. In Chinese company we are infected with 
Maoist enthusiasm and in that mood even dyed-in-the-wool mandarins 
talk sternly of self-reliance. But when the moment passes, as it 
soon does, and grim necessity takes hold, the same mandarins open 
their account books to inquisitors from Washington.

Not to forget an important point, our much-vaunted nuclear 
programme also has a western parenthood. Dr Khan, our Oppenheimer 
now mercifully put out to pasture by the military government, got 
his blueprints from Holland, not from any university in China. And 
over the years most of the components that have gone into the 
creation of the Kahuta complex have originated from western 
countries.

None of this is to decry our China friendship. Far from it. But we 
need not to be victims of our own rhetoric. The Pakistani 
establishment has always been fixated on foreign policy and has 
been slave to the belief that triumphs abroad (most of them 
painfully short-lived) can make up for failures (some of them 
painfully enduring) at home.

In the 50's and 60's the forging of the American connection made us 
neglect more urgent duties of nation-building and constitution-
framing. In 1971 the role we played in opening bridges between the 
US and China was partially responsible for General Yahya's 
arrogance and his belief that he could bypass the necessity of 
seeking a political settlement in East Pakistan. In the 80's the 
role we played in Afghanistan to further American interests made us 
turn a blind eye to our own national interest. The dangers we 
courted then have become more intractable with time while the rest 
of the world has moved on to other things.

In 1965 China issued an ultimatum to India, something which we tend 
to believe prevented India from making any move against a 
defenceless East Pakistan. But Chinese leaders, veterans of the 
Long March, were baffled by our inability to even consider 
prolonging the war beyond 15 or 17 days. In 1971 the Chinese 
leadership advised moderation in East Pakistan. But General Yahya 
Khan was somehow persuaded that China would intervene militarily on 
our behalf. In 1999 when fighting flared over Kargil China 
counselled us to step back. All in all then, a restraining 
influence on our exuberance. But we have always tended to read more 
into this relationship than warranted by the facts.

So we come to the present. Just a day or two after Premier Zhu 
Rongji left Pakistan, General Musharraf at the Institute of 
Strategic Studies in Islamabad said: "Pakistan's security interests 
lie in maintaining regional balance..." While there can be no 
quarrel with this he went on to say: "...and in this (that is, in 
maintaining a regional balance) it would desire an active Chinese 
role...This role will remain vital, specially so in the changing 
geo-strategic realities. The end of the Cold War has led to a 
change in global equation, leading to emergence of regional 
hegemons or countries with hegemonistic tendencies. South Asia is a 
victim of regional hegemonism. This creates regional imbalance 
which, in turn, threatens peace." In plain language this means that 
China should to step in to balance India's growing clout in South 
Asia.

Quite apart from the circumstance that whoever is responsible for 
this tortured syntax deserves a spell in the stocks, the thinking 
behind these words is flawed. A regional imbalance anywhere - East 
Asia, the Middle East, South Asia - is a recipe for instability. 
But whereas in East Asia - Japan, China, the Koreas - the balance 
of power is maintained by the US, and whereas in the Middle East 
the imbalance in Israel's favour is promoted and sustained by the 
US, in South Asia the role or interventionism of no outside power, 
not even China's, is needed to redress any imbalance. If it is, 
then Pakistan's nuclear arsenal and its large army make no sense.

Let us rid ourselves of the notion that South Asia is a victim of 
hegemonism. India is not that powerful nor Pakistan that weak for 
hegemonism to flourish. True, India tends to be overbearing while 
dealing with its neighbours - a tendency arising as much from its 
size as from its parvenu status which goads it to prove that it is 
a great power. But Pakistan needs no outside help to offset this 
tendency or stand up to India when the occasion demands.

If anything, any high profile foreign role in South Asia will 
exacerbate not check instability for it will spur India to spend 
more on defence and missiles. Which in turn will prompt Pakistan to 
match India bomb for bomb and missile for missile. Stability in the 
sub-continent lies in two things: limiting and then downscaling the 
military competition between India and Pakistan; and finding a 
modus vivendi (as opposed to the chimerical notion of an outright 
solution) over Jammu and Kashmir. But this has to be a native 
endeavour. The wisdom to live as good (and wary) neighbours will 
have to come from within the sub-continent, not outside it.

As for Pakistan, it must learn to take its own decisions without 
knee-jerk reflexes to external stimuli. What if the Vajpayee 
government is currying favour with the Bush administration by 
making supportive noises over the bogey of missile defence? It 
doesn't mean we swing immediately in the other direction. Nor 
should it mean we get upset by some ill-judged remarks of a second-
tier State Department official like Richard Armitage. It should 
take more than this to upset our equanimity.

Pakistan must learn to get out of its Indo-centred mode of foreign 
policy. While what India does matters to us, every foolish word 
uttered in New Delhi should not call for a matching Pakistani 
response. Consider the harm we did ourselves when we fell for 
Indian sabre-rattling after India's nuclear tests and went for 
tests of our own. If only we could have checked our horses then.

The best answer to Indian hegemonism is not a China active in South 
Asia but a Pakistan at peace with itself and strong at home, 
something that can only come from its own efforts. If there is one 
thing China's example has to teach us it is this.  

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20010519
-------------------------------------------------------------------
Welcome to the dark side
-------------------------------------------------------------------
Irfan Husain

As the accountability against politicians and bureaucrats grinds 
on, there are occasional complaints in the press that two 
institutions have been left out, namely the military and the 
judiciary.

Actually, there is a third sacred cow that has not been touched, 
nor has it been mentioned very often: the press itself. There was a 
huge furore when General Pervez Musharraf once referred to 'lifafa 
journalism' during a press conference in New York lat year. (The 
'lifafa' is the envelope in which hacks on the tack get their 
alleged kickbacks from their paymasters). The general was told to 
either name names or back off. In the event, our chief executive 
decided that discretion was the better part of valour.

But from time to time, this allegation has surfaced and ruffled the 
feathers of editorial writers and columnists who indignantly and 
forcefully defend the pristine integrity of their colleagues. A few 
days ago in Lahore at a small dinner party, an ex-federal minister 
disclosed that during his stint in government, the then head of an 
intelligence agency had given him lists of journalists who were 
supplied with booze and visas by the Indian high commissions; there 
was also a list of journalists supposedly on the payroll of the US 
embassy.

One only wishes the chief spook had included those journalists who 
get 'lifafas' from his and other federal and provincial agencies on 
a regular basis. Indeed, when he was the federal minister for 
information, Javed Jabbar had disclosed that his minister had 
previously kept an entire stable of newspapermen on its payroll and 
paid them off from its secret fund, but the present government had 
ended this practice.

It is a fact the print media has played a major role in the removal 
of elected governments, and in the final analysis, it is answerable 
to nobody. Each time one political party wins an election, its 
rivals begin a destabilizing campaign aimed at dislodging it, and 
are supported in their efforts by shadowy intelligence agencies 
through their team of journalists. All kinds of rumours and 
allegations are given currency, and after they have been widely 
reported, acquire a life of their own. Soon, mainstream newspapers 
are reporting them as the gospel truth, and the government is put 
on the defensive, using energy and political capital in denying 
real and concocted charges.To illustrate this point, I would ask 
readers to recall a particularly bizarre charge that was laid at 
Asif Zardari's door during Benazir Bhutto's first stint. A British 
businessman of Pakistani origin claimed that he had collected funds 
in the UK for a charitable hospital here, but this money had been 
extorted from his by Asif Zardari's henchmen who had then proceeded 
to tie a bomb around his leg and drove him to the airport from 
where he caught a plane to London.

When the story appeared, all hell broke loose. Lurid details were 
published and the prime minister furiously denied the charge as did 
her husband. The Washington Post carried a long report filed by its 
reporter in Pakistan. All of us were convinced that where there was 
smoke, there must be some fire. But when the PPP government fell, 
and Zardari was tried for this alleged crime a curious story 
emerged. Apparently, the complainant's wife had been allotted a 
plot of land 'on compassionate grounds' in Lahore by the then 
opposition leader and Punjab chief minister, Nawaz Sharif. And when 
cross-examined by the defence lawyer, Aitizaz Ahsan, the accuser 
tipped up every time he opened his month. For instance, when asked 
at what point he ignored the airport authorities that he had a bomb 
tied to him, he had no answer.

It is an unfortunate fact that many newspaper owners grossly 
underpay their staff, closing their eyes to the corruption that 
goes on, or indeed profiting by it.

Having no doubt angered many colleagues, let me hasten to add that 
there are fortunately many honourable men and women in the 
profession who have fearlessly exposed the truth and turned down 
all bribes and blandishments. A number of writers, editors and 
publishers have stood up to authoritarian governments and suffered 
as a consequence. When we talk of the freedom of the press in 
Pakistan, it is important to remember that it was wrested from 
autocrats by brave journalists, and was not handed to them on a 
platter.

However, we must also be honest enough to admit that there is much 
wrong with our profession, and the beginning of the rot lies in the 
pay structure. For far too many owners, this is a business as any 
other in which you squeeze the employee and screw the consumer to 
maximize profits. For ill-paid (or unpaid) hacks, the temptation to 
join the gravy train smut be overwhelming. I suppose I can afford 
to moralize on the subject as I do not depend on journalism for a 
living. But until we openly debate and denounce the corruption in 
journalism, we cannot really condemn it in other institutions.


SPORTS
20010518 
-------------------------------------------------------------------
Rains wash way opening day of Lord's Test
-------------------------------------------------------------------

LONDON, May 17: England's frustrations were completed on Thursday 
when all-rounder Craig White was ruled out of the first Test 
against Pakistan at Lord's after the opening day was washed out 
without a ball being bowled.

The England all-rounder withdrew with a stiff back which also looks 
certain to sideline him for the second and final Test at Old 
Trafford. It could also force him to miss the start of Australia's 
Ashes tour.

The home team had declined naming their line-up on Wednesday to 
give the Yorkshire player a last chance of recovery after he failed 
to take part in a "final fitness test". But coach Duncan Fletcher 
said: "We have released Craig for two weeks. It's very 
disappointing since it's easier to balance the side with him, as 
he's two players in one.

Pakistan play two Tests before taking part in a one-day triangular 
series also involving Australia, the side who beat them in England 
in the 1999 World Cup final. Australia will then take part in a 
five-match Ashes series.-Reuters/AFP

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20010517 
-------------------------------------------------------------------
Pakistan seek revenge against England
-------------------------------------------------------------------

LONDON, May 16: Pakistan will be out for revenge when the first 
Test against England starts here at Lord's on Thursday. The 
tourists lost their unbeaten record at Karachi during the winter 
when England won the third Test of three and took the series 1-0.

But Pakistan will have to be quick about their work: there are just 
two Tests on this tour, which serves as an appetiser for the five-
Test Ashes series here between England and Australia.

The decision to play just two Tests against Pakistan this summer, 
when series between the two sides here have usually been comprised 
of three and sometimes five matches has caused ill-feeling.

Certainly Pakistan, a team with plenty of star names, deserve to be 
more than an Ashes warm-up act and it's hard to imagine Australia 
being treated in the same way. However, Tim Lamb, the chief 
executive of the England and Wales Cricket Board (ECB) insisted no 
slight was intended.

"It is completely wrong to suggest that the ECB's decision to host 
two Test matches against Pakistan this summer reflects poorly on 
the tourists," said Lamb. "Our original plan for this summer was to 
play a six-Test Ashes series against Australia only.

"However, following our new broadcasting deal with Channel Four and 
Sky in 1998, we agreed to expand the international match programme 
to seven Test matches per summer and introduce a triangular one-day 
tournament.

"I can reassure Pakistan supporters that the ECB has the utmost 
respect for their team's ability. "They are one of the most 
exciting sides to watch in world cricket and we will be looking to 
play a minimum of three Test matches and possibly four when 
Pakistan are next due to tour here again in 2006."

England, unusually, will start this series as favourites: they have 
won four series on the trot while Pakistan have won just once in 
their last six, although they did manage a 1-1 draw against New 
Zealand earlier this year.

Nevertheless, a number of their leading players - captain Waqar 
Younis, fast bowler Wasim Akram, leg-spinner Mushtaq Ahmed and off-
spinner Saqlain Mushtaq all have extensive experience of English 
conditions thanks to their time on the county circuit.

England's Graham Thorpe said that Waqar his former Surrey team-mate 
was "an inspring leader of men" and what he may lack in tactical 
experience he may well make up for in force of personality. That 
and the collective Test experience of the other senior players may 
help compensate for a lack of pre-Test match practice.

This has been a particular handicap for two of their key batsmen - 
Yousuf Youhana and Inzamam-ul-Haq, neither of whom has yet played a 
major innings on tour. Yousuf has so far managed nought, five and 
four while vice-captain Inzamam's contribution stands at 18 and 13. 
Waqar admitted that he had yet to finalise his line-up.

Pakistan pin-up boy Shoaib Akhtar has been suffering from the 
after-effects of gastro-enteritis and Waqar said that the 
'Rawalpindi Express' and fellow quick Mohammad Sami were both had 
fitness battles to overcome.

"With Shoaib I don't really know yet and with Mohammad Sami it 
depends on his shin injury," said Waqar. "I'm not sure who will bat 
at three. Abdur Razzaq can bat at three or six but I like having 
him in the middle.

"We depend more on our bowling so Razzaq is a key man for to give 
us balance. Saeed Anwar and Saleem Elahi (the opening batsmen) are 
both in great form and Azhar Mahmood looks good but you can only 
play 11."

Waqar also suggested that only one out of slow bowlers Saqlaim 
Mushtaq (off-spin) and Mushtaq Ahmed (leg-spin) would play. "Both 
have been bowling really well and it will be a difficult choice." 
Meanwhile, Waqar added that captaining Pakistan at Lord's, where he 
had been a member of two winning Test sides, was an inspiration.

"I'm very proud of myself that I'm here captaining Pakistan at 
Lord's, the best cricket ground in the world," he said. "It will 
give me strength to know that I have done well here in the past. 
All we can do now is play hard cricket, do the best we can and 
leave it to God."

England will wait until the final moment Thursday before finalising 
their team in the hope that all-rounder Craig White will be 
declared fit. England captain Nasser Hussain said: "He's such a key 
man - we're going to give him the extra day, the extra night."

The all-rounder, suffering from a stiff back, has failed to train 
with the squad for the past two days and Hussain added after an 
indoor net session: "Craig didn't bowl too much today either."

White, the only genuine all-rounder in the side, had been due to be 
given a final fitness test on Wednesday. If ruled out, he is likely 
to be replaced by debutant left-arm seamer Ryan Sidebottom, 
although pace bowler Matthew Hoggard could also be drafted in 
despite not being named in England's original squad.

Hussain said he was not worried about the prospect of starting the 
game with two new caps - Side bottom and batsman Ian Ward - in the 
side. "This is the stage they want to play on, this is Test cricket 
and they are seasoned professionals," he said.

Hussain said he was not flustered about the prospect of dropping 
down the order from three to number four. "Nasser Hussain's focus 
is on what's best for England - I've scored 207 against Australia 
batting at four. Michael Vaughan has the composure to bat at number 
three and it won't do Graham Thorpe down one place in English 
conditions. He's such a key player for us that we can do without 
him coming in at 10 for two."

England earlier in the day sent their only slow bowler in the 
squad, Robert Croft, back to play for his county Glamorgan. But bad 
weather, not unknown in England at this time of year, could ruin at 
least one Test in this all-too brief encounter.

Possible teams:

England: Nasser Hussain (captain), Michael Atherton, Marcus 
Trescothick, Michael Vaughan, Graham Thorpe, Alec Stewart, Ian 
Ward, Dominic Cork, Andrew Caddick, Darren Gough, Ryan Sidebottom.

Pakistan: Waqar Younis (captain), Saeed Anwar, Saleem Elahi, Abdur 
Razzaq, Inzamam-ul-Haq, Yousuf Youhana, Younis Khan, Rashid Latif, 
Wasim Akram, Saqlain Mushtaq, Mohammad Sami.

Umpires: Peter Willey (England) and Darrell Hair (Australia).

Match referee: Brian Hastings (New Zealand).-AFP/Reuters

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20010515 
-------------------------------------------------------------------
Overrated Shoaib fails to convince team coach
-------------------------------------------------------------------

CANTERBURY (England), May 14: Pakistan pace bowler Shoaib Akhtar's 
lingering hopes of playing in the first Test against England appear 
to be over.

Pakistan coach Richard Pybus suggested on Monday that Shoaib, who 
missed the start of the tour after failing a medical, would not be 
ready for the start of the Lord's encounter.

Shoaib, clearly short of match fitness following a stomach problem 
and a lay-off with injury, has only played one match and was not 
selected for the final warm-up against Kent.

Pybus said: "He was a bit rusty at Derby last week but he's been 
better here in the nets. "I'm not convinced he is in the reckoning 
for Lord's but it's great just to see the kid run in."

Shoaib missed Pakistan's previous tour to New Zealand with a leg 
problem and has also had to remodel his action after being reported 
for a suspect action. Pybus said: "The illness took a hell of a lot 
out of him, but it is important that he is working hard and got a 
smile on his face again.-Reuters

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