------------------------------------------------------------------- DAWN WIRE SERVICE ------------------------------------------------------------------- Week Ending : 26 May 2001 Issue : 07/ -------------------------------------------------------------------
Contents | National News | Business & Economy | Editorials & Features | Sports
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CONTENTS ===================================================================
NATIONAL NEWS + India's formal invitation received: Musharraf to respond shortly + Pakistan refuses Most Favoured Nation status to India + Anti-terrorism law being amended: Bid to curb sectarianism + Provinces asked to make district-based budgets + Former Navy Chief Admiral Mansurul Haq, wife being flown back + United Kingdom invites Pakistan for talks on vital issues + Denmark reschedules Pakistan loans + Sindh amends law on removal from service + Chinese Admiral lauds Pakistan Foreign Policy + Strategy to create 2 million jobs in next fiscal okayed + Judges case to be referred to Supreme Judicial Council + IMF says situation remains difficult + International Monetary Fund opposes direct lending to provinces + Azerbaijan, Pakistan to boost defence ties --------------------------------- BUSINESS & ECONOMY + 4.5% a year growth rate target envisaged + Shaukat sees 8pc growth in large-scale industry + Additional Sales Tax may be doubled + Government plans $20 billion export target by 2005 + PIB's get poor response + Guidelines for exporters + Foreign investment banks role restricted + Mari Gas Field shareholders rate of return hiked + Government meets bank borrowing target + Rupee falls to lifetime low --------------------------------------- EDITORIALS & FEATURES + The Kidney Centre denationalization Ardeshir Cowasjee + You don't shoot admirals, do you? Ayaz Amir + A question of image Irfan Husain ----------- SPORTS + India agrees to send team to Pakistan + Waqar's men disgraced at Lord's + Waqar claims hat trick to rout Leicester

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NATIONAL NEWS
20010526
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India's formal invitation received: Musharraf to respond shortly
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ISLAMABAD, May 25: Chief Executive Gen Pervez Musharraf would
shortly respond to Indian Prime Minister Atal Behari Vajpayee's
formal invitation which was received here on Friday.

"A letter from the Indian Prime Minister, Mr A.B. Vajpayee, to the
Chief Executive, Gen Pervez Musharraf, inviting him to visit India
was delivered today to the foreign secretary by the acting high
commissioner of India," said a statement by the Foreign Office
spokesman here.

"The chief executive will send a reply shortly," it said. It was
delivered to Foreign Secretary Inamul Hague by acting Indian high
commissioner to Pakistan here on Friday, it said.

Meanwhile, an spokesman for the Indian foreign ministry said in New
Delhi that Prime Minister Atal Behari Vajpayee on Friday formally
invited Chief Executive Gen Pervez Musharraf to New Delhi for
summit-level peace talks.

The invitation to Gen Musharraf and his wife was conveyed by
India's acting high commissioner in Islamabad, Sudhir Vyas, to
Foreign Secretary Inamul Haq in Islamabad on Friday morning, the
spokesman said.

In his letter to Musharraf, Vajpayee urged the chief executive to
"pursue a path of reconciliation." "I invite you to walk this high
road with us," Vajpayee said. "We have to pick up the threads
again, including renewing the composite dialogue, so that we can
put in place a stable structure of cooperation and address all
outstanding issues, including Kashmir."

In his letter, Vajpayee emphasized that New Delhi had been pursuing
a path of peace and this meeting was an opportunity to carry
forward the dialogue process.

"India has, through dialogue, consistently endeavored to build a
relationship of durable peace, stability and co-operative
friendship with Pakistan," he said.

"For the welfare of our peoples, there is no other recourse but a
pursuit of the path of reconciliation, of engaging in productive
dialogue and building trust and confidence," he said.

Assuring Musharraf of his "highest consideration" to the proposed
dialogue, the Indian premier also made it clear that the talks
would not just centre around Kashmir.

Foreign secretary-level talks between India and Pakistan have
remained frozen for two years with Islamabad refusing to discuss
any subject other than "the core issue" of Kashmir.

India has drawn up a list of eight subjects, as part of a composite
dialogue process, which includes various confidence building
measures to increase people-to-people contact and strengthening
trade and economic relations.

Recalling his landmark bus ride to Lahore, Vajpayee said the main
objective of the visit was to begin "a new chapter in our bilateral
relations."

"I had recorded at the Minar-i-Pakistan that a stable, secure and
prosperous Pakistan is in India's interest; that remains our
conviction," Vajpayee said in his letter to Gen Musharraf.

No dates of the summit between the two leaders have been mentioned
in the letter. However, according to sources, the visit is unlikely
to take place before July this year as Vajpayee is having a knee
operation on June 7 in Bombay and plans to take the month off for
recuperation.

Mirwaiz: Mirwaiz Umar Farooq, a leader of the All Parties Hurriyat
Conference, said on Friday a summit between Pakistan and India
could be a first step in resolving the Kashmir dispute, but that
the Kashmiris will have to be included in negotiations.-Agencies

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20010523
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Pakistan refuses Most Favoured Nation status to India
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Khaleeq Kiani

ISLAMABAD, May 22: Pakistan has refused to grant most favoured
nation (MFN) status to India, saying it would continue to pursue
its present policy on this issue. "There would be no change in our
policy. We would continue with our existing policy and consider it
at an appropriate time,"

Abdul Razzaq Dawood, Federal Commerce Minister, told Dawn after a
meeting with visiting delegation of Saarc Chamber of Commerce and
Industry (SCCI) here on Tuesday.

The minister said Pakistan would allow trade of items which it
considered in its interest. Responding to a question on
establishment of warehouses near border areas, Razzaq Dawood said a
comprehensive plan would be devised on the issue sometime later.

He said during his talks with the visiting delegation, the
participants mostly discussed issues pertaining to World Trade
Organization and agreed that all Saarc countries should have a
uniform stand. He said expansion of regional trade and adoption of
a joint strategy in the forthcoming Doha meeting of WTO on all
issues particularly TRIMS, TRIPS and ATC related to Saarc region
were essential for the betterment of the people of this part of the
world.

To another question relating to a demand by the India-Pakistan
Chamber of Commerce and Industry (IPCCI) to ease visa restrictions,
the minister said the issue was not discussed in detail. "The
meeting discussed in detail the intra-regional trade and joint
stand on the WTO issue," said the minister in a brief informal
talk.

Sources said the IPCCI President, Chirayu R. Amin, raised the issue
of granting MFN status to India by Pakistan but the minister told
him these matters would be taken up at the Saarc forum.

On the question of intra-regional trade, the participants of the
meeting agreed that the challenges posed by the WTO could be met
through local and intra-regional trade. The meeting agreed that
regional blocs like those in Europe and Africa had 90 per cent of
total trade within their own blocs but it was almost non-existent
in the case of Saarc countries.

Earlier, business leaders of India and Pakistan agreed that
bilateral trade had the potential to reach up to $10 billion though
official trade stood at around $200 million and unofficial at $1
billion, at least five times higher than the official trade.

The businessmen of two countries urged their governments to ease
visa restrictions for business community and expand the list of
tradable items that now stood in the vicinity of 600. The IPCCI
also constituted a joint committee to prepare recommendations to
address issues relating to infrastructure, tariff and list of
tradable items.

Speaking at a press conference, the IPCCI President, Chirayu R.
Amin and co-president Ilyas Bilour, demanded that both countries
should take steps to boost bilateral trade.

Chirayu Amin said: "We should try to take long-term measures for
trade enhancement. We will discuss with the Pakistani ministers the
issue of giving the status of most favoured nation (MFN) to India."

Ilyas Bilour, however, clarified on the occasion that they would
not support this demand by the Indian delegation.

To a question, the Indian business leader said tax tariff,
infrastructure, logistics and travelling were the main issues
hindering enhancement of trade and these were discussed in detail
by the two sides. "Ultimately as neighbours we have to counter the
world which is opening up and we realize that more open and free
trade would tremendously benefit the two economies."

On the question of political disputes, Mr Amin said his delegation
would convey the feelings in Pakistan to the Indian government. "We
are not political people but we know that Kashmir issue is a major
hurdle between Pakistan and India to come closer," he said.

Ilyas Bilour stressed the need for bilateral trade enhancement and
said why couldn't Pakistan and India do business if China and
America could do so. He said there was tremendous potential for
bilateral trade and co-operation in fields like agriculture,
communication, industry, services and information technology.

Earlier, inaugurating the IPCCI meeting, federal minister for
privatisation, Altaf M. Saleem, said interaction between the
business communities of Pakistan and India would be helpful in
resolving disputes, adding both countries could benefit from each
other's experiences.

He stressed that business community should play a key role in the
resolution of bilateral disputes that hinder the two-way relations.
"We should understand much better the issues confronting us," he
said, urging upon the Indian delegation to convey Pakistan's
commitment for having good relations with India.

Iftikhar Ali Malik, President of FPCCI, in his welcome speech asked
Indian businessmen that they could make arrangements with the
Export Processing Zones (EPZs) in Pakistan to buyback finished
products manufactured in these zones using raw material imported
from India. Although the IPCCI meetings concluded here on Tuesday
but most of the Indian businessmen are staying back for the Saarc
Chamber meetings.

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20010523
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Anti-terrorism law being amended: Bid to curb sectarianism
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M. Ismail Khan

PESHAWAR, May 22: The federal government is planning to introduce
major amendments to the Anti-terrorism Act, 1997 to ban sectarian
organizations involved in terrorism, stop fund-raising and
crackdown on militants.

A draft of the ordinance, expected to be promulgated sometimes next
month, has been circulated among the four provinces which would
submit their views by May 31, the official sources said.

With the promulgation of the ordinance to incorporate amendments -
by far the most comprehensive law to deal with growing sectarianism
in the country. The Suppression of Terrorist Activities (Special
Courts), 1975 would stand repealed, the draft document says.

The Anti-Terrorism Act which hitherto was enforced in the Punjab
and Sindh only, with the proposed amendments will also be extended
to the NWFP and Balochistan.

The Anti-Terrorism (Amendment) Ordinance, 2001, as it will be
called upon promulgation, in section 6 defines terrorism as a) the
use, or threatened use, designed to coerce and intimidate or
overawe the government or the public or a section of the public.
And b) the use or threat is made for the purpose of advancing
political, religious, ideological or ethnic cause.

According to the proposed ordinance, an action will be called
terrorism if it involves serious violence against a person,
involves serious damage to property, endangers a person's life,
other than that of a person committing the action, incites hatred
and contempt on religion, sectarian or ethnic to stir up violence,
creates a serious risk to health or safety of the public or section
of the public, is designed seriously to interfere with or seriously
disrupt an electronic, communications system or public utility
service.

Section 6 of the proposed ordinance provides for punishment for
certain acts of terrorism. It provides death sentence or life
imprisonment and or fine in cases where death is caused whereas in
case of grave bodily harm or injury, the guilty could be awarded
life-term and or fine. Damage to property is liable to sentence of
imprisonment not exceeding 14 years.

According to the draft ordinance, an organization which commits or
participates in terrorism, prepares for terrorism, promotes or
encourages terrorism, supports and assists any organization
concerned with terrorism, or patronizes and assists in the
incitement of hatred and contempt on religion, sectarian or ethnic
lines that stir up disorder, makes no attempt to expel from its
ranks or ostracise those who commit acts of terrorism and presents
them as heroic persons will be declared as terrorist organization.

Such organization, says the draft amendments in the Anti- Terrorism
Act, will be proscribed if the federal government has reasons to
believe that the organization is involved in terrorism.

Such proscribed organizations, however, will have the right of
review to the federal government whose decision would be final.

The draft amendments also provides for sealing of offices of any
proscribed organization besides freezing of its accounts, movable
and immovable property and seizure of literature, posters, banners,
printed or electronic material.

The draft ordinance also bars proscribed organizations from issuing
press statements or press conferences and makes it an offence for
any person who abets or aids its publication and dissemination.

Under Section 11F of the draft ordinance, a person is guilty of an
offence if he belongs or professes to belong to a proscribed
organization, solicit or invites support for a proscribed
organization or arranges, manages or assists in managing, or
addressing any meeting to support proscribed organization, wears,
carries or displays any article, symbol, slogan or any flag or
banner connected with or associated with any proscribed
organization.

According to the draft amendments, a person who commits such an
offence may be arrested by a police officer without a warrant and
shall be liable on summary conviction to a simple imprisonment for
a term not exceeding six months or to a fine or both.

A person who addresses a meeting whether from within the country or
abroad, and the purpose of his address is to encourage support for
a proscribed organization or to further its activities will also be
liable to punishment for a term not exceeding 10 years.

The proposed amendments also prohibit and make it an offence for
any person who raises funds, provide money or property, receives
money or other property or uses and possess money or property with
the intention or suspicion that it will be used for terrorism.

The draft ordinance declares money-laundering, retention or control
by or on behalf of another person, of terrorist property an offence
in which case the onus to prove innocence shall lie on the
defendant.

It also provides for the protection of witnesses and says that the
court may give due protection to witness by maintaining anonymity
of their names from the court records and during proceedings and
that the proceedings may be held in camera, where necessary.

More importantly, the draft ordinance also makes it an offence for
any person who provides or receives instruction or training in the
making or use of firearms, explosives, chemical or other weapons
and any person found guilty of such an offence shall be liable to a
term not exceeding 10 years.

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20010523
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Provinces asked to make district-based budgets
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Reporter

ISLAMABAD, May 22: The federal government has directed all the four
provinces to prepare their budgets on "district-by-district basis"
under the new budget preparation and expenditure assignments.

According to official sources, under the new system, important
expenditure assignments will be devolved to districts, including
primary and secondary education, primary healthcare, public works,
irrigation services, and some police and judiciary functions.

Ultimately, the districts will have to prepare and manage a large
share of what is currently part of the provincial budgets,
considering also that spending on social sectors and poverty
alleviation is expected to increase significantly in the coming
years. As it will take time to build necessary capacity to do this,
the authorities have decided that during the transition period
(which could last up to three years), provinces will remain
responsible for personnel payments and ongoing development
projects, while the districts will be responsible for non-wage
recurrent budgets and new development projects.

Cognizant of the shortcomings in the current system of provincial
and local government finances, the authorities are currently
engaged in preparing a fiscal framework for the devolution plan. A
local government law is under preparation, and the authorities have
established an institutional framework for the preparatory work,
including the Fiscal Decentralization Committee (FDC), the
Provincial Finance Commissions (PFCs), and District Implementation
Committees (DICs).

Sources said the new local government structure (district, tehsils
and unions) would require substantial institutional strengthening
through hiring of trained staff and offering incentives to those
willing to be posted from the provinces to local administration.

As regard tax assignment and revenue sharing, the Provincial
Finance Commissions have been asked to identify taxes that should
be devolved from the provinces to the districts, and rationalize
plethora of local taxes.

According to some proposals, tax on immovable property and some
other minor taxes, like entertainment tax and professional tax,
could be given to the districts. For the provinces, it is proposed
that number of taxes may be reduced and the agriculture income tax
may be developed into one of the major provincial revenue sources.

It is also suggested that the revenue from a number of taxes, like
stamp duties and motor vehicle tax could be shared by provinces and
districts. However, little consideration appeared to have so far
been given to how the federal and provincial revenue sharing
formula should be adjusted under the new system.

The Provincial Finance Commissions have also been asked to
determine the modalities of fiscal transfers from provinces to
districts. The authorities intend to establish an equalization
framework, which will take account of needs and capacities of each
district. Although the specifics of this framework are still under
discussion, the government wants to devise a system by which grants
to each district would be determined on the basis of a set of
indicators, focussing on need, quality of service delivery, and own
revenue mobilization effort.

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20010523
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Former Navy Chief Admiral Mansurul Haq, wife being flown back
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Masood Haider

NEW YORK, May 22: The US marshals are expected to hand over former
navy chief Admiral Mansurul Haq, to Pakistan's deputy prosecutor
general Azmat Saeed, on board the Pakistan Airlines flight Pk 704
at JFK Airport here an hour before the departure of the flight to
Pakistan, embassy sources here told Dawn. Admiral' Haq's wife would
also leave for Pakistan by the same flight.

The flight was expected to depart around 6:45pm New York Time
(i.e., 3.45am Pakistan time). No one was available from the PIA
staff at the airport to comment on Admiral Haq's transfer.

It was learnt, however, that Admiral will be escorted by the
Pakistani team and would fly without handcuffs and shackles. This
will be the first time that US will extradite any Pakistani wanted
in connection with corruption charges in Pakistan.

The PIA has kept its executive class exclusively for the transfer
and travel of admiral Haq and reportedly 13 passengers booked to
travel in the club class were offered seats on Wednesday flight or
were told that their tickets would be endorsed to other airlines.

At the Manchester airport, PK 704 aircraft would not be allowed to
gate at the airport instead it will remain outside on the tarmac.

The ex-naval chief who is wanted in Pakistan on corruption and
kickback charges, has agreed to be voluntarily repatriated to
Pakistan to face proceedings.

His extradition was sought by Pakistan and agreed to by the US, and
he was taken into custody in Austin, Texas, which he had made his
home for the past two years or so.

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20010522
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United Kingdom invites Pakistan for talks on vital issues
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Syed Talat Hussain

ISLAMABAD, May 21: Britain has invited Foreign Minister Abdus
Sattar for formal talks in London, western diplomatic sources told
Dawn on Monday. The invitation has been extended to the foreign
minister by his British counterpart Robin Cook , in the shape of a
letter sent last week.

The British High Commission in Islamabad confirmed that a written
invitation has been extended to the foreign minister.

"Mr Robin Cook has written to Mr Sattar inviting him to London for
formal talks. There has not yet been a formal response to the
invitation from Pakistan," a spokesperson of the British High
Commission said.

The visit is likely to take place in June and will be the first
contact between the two countries at the foreign minister level
since the military government assumed charge in October 1999.

The British government's first reaction to the political change in
Pakistan was harsh with some of its ministers including Mr Cook
strongly criticizing the development, and being in the forefront of
the move to suspend Pakistan's membership of the Commonwealth.
Members of the British government have also been expressing
concerns over the proliferation of nuclear weapons pointing fingers
at Pakistan as the source of the problem.

The Musharraf government on several occasions raised the issue of
the lack of cooperation from Britain on the extradition of the
accused wanted by the National Accountability Bureau. Diplomatic
sources said the visit in part is meant to straighten the tangles
left behind by that episode in the relations between the two
countries.

"I do not expect a major change in the UK's policy towards the
Musharraf government. But obviously there is great interest in
Great Britain about which direction Pakistan will be going, both
domestically and on important foreign policy fronts. The invitation
is an expression of that interest and concern," said a western
diplomat. No official word was available from the Pakistan Foreign
Office on the British invitation for the visit.

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20010522
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Denmark reschedules Pakistan loans
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Reporter

ISLAMABAD, May 21: Denmark has rescheduled Pakistan's loans worth
14.640 million krones for 20 years, including a grace period of 10
years free of interest. These loans were to be repaid by Pakistan
from March 1, 2000, to September 30, 2001.
 A bilateral agreement to this effect was signed here on Monday by
Seven B. Bjerregaard, the charge d' affairs of Denmark, and Nawid
Ahsan, the secretary for the economic affairs division.

The agreement has been signed in pursuance of agreed minutes of the
Paris Club for consolidation and rescheduling of debt service
payments.

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20010522
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Sindh amends law on removal from service
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KARACHI, May 21: Sindh Governor Mohammedmian Soomro on Monday
promulgated the "Removal from service (special powers) (amendment)
ordinance-2001." The ordinance, which amends a similar ordinance
promulgated last year, shall be deemed to have taken effect from
August 30, 2000.

It says that in sub-section (I) of the removal from service
(special powers) ordinance-2000, the marginal note, for words and
comma removal, suspension, the words and commas dismissal, removal
and compulsory retirement shall be substituted.

In clause (a) of the ordinance-2000, words "Or is guilty of being
habitually absent from duty without prior approval of leave" have
been added. Similarly, in sub-clause (iii) of clause (c), following
sentence has been inserted: He has entered into a plea-bargain
under any law for the time being in force and has returned the
assets or gains acquired through corruption or corrupt practices
voluntarily.

The amended ordinance further states that before passing an order,
the competent authority shall, by order in writing, inform the
accused of the action proposed to be taken in regard to him and the
grounds of the action and give him a reasonable opportunity of
showing cause against that action within seven days or within such
extended period as the authority may determine.

No such opportunity shall be given where the competent authority is
satisfied that in the interest of security of Pakistan or any part
thereof, it is not expedient to give such opportunity.

Similarly, no such opportunity shall also be given where the
accused is dismissed or removed from the service or reduced in rank
on the ground of conduct which has led to a sentence of fine or of
imprisonment or where the competent authority is satisfied for
reasons to be recorded in writing that it is not reasonably
practicable to give the accused an opportunity of showing cause.

The dismissal or removal of premature retirement from service or
reduction to lower post or pay scale of a person under sub-section
(I) shall not absolve such person from liability to any punishment
to which he may be liable from an offence under any law committed
by him while in service, the ordinance says.

It further envisages that the competent authority shall, before
passing an order under section 3, appoint an inquiry officer or
inquiry committee to scrutinize the conduct of person in government
service or a person in corporation service who is alleged to have
committed any of the acts or omissions specified in section 3.

The inquiry officer or the inquiry committee shall communicate to
the accused the charges and statements of allegations specified in
the order of inquiry passed by the competent authority.

It shall require the accused within seven days, from the day the
charge is communicated to him, to put in a written defence. It
shall enquire into the charge and may examine such oral or
documentary evidence in support of the charge or in defence of
accused as may be considered necessary and the accused shall be
entitled to cross-examine the witness against him.

The inquiry officer or committee shall hear the case from day to
day and no adjournment shall be given except for special reasons to
be recorded in writing and intimated to the authority.

Where the inquiry officer or the committee is satisfied that the
accused is hampering or attempting to hamper the progress of the
inquiry, he or it shall record a finding to that effect and proceed
to complete the inquiry in such a manner as he or it deems proper
in the interest of justice and submit the findings and
recommendations to the competent authority within 25 days of the
initiation of the inquiry.

The competent authority may dispense with the inquiry if it is in
the possession of sufficient documentary evidence against the
accused or for reasons to be recorded in writing, or if it is
satisfied that there is no need of holding the inquiry.

Where a person who has entered into a plea-bargain under any law,
for the time being in force, and has returned the assets or gains
acquired through corruption or corrupt practices voluntarily, the
inquiry shall not be ordered.

However, show-cause notice shall be issued on the basis of such
plea-bargain to such person informing him of the action proposed to
be taken and requiring him to submit written reply within fifteen
days of the receipt of the notice. On the receipt of the reply, the
competent authority may pass such orders as it may deem fit.-PPI

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20010522
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Chinese Admiral lauds Pakistan Foreign Policy
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KARACHI, May 21: Rear Admiral Zhang Yan, Deputy Commander, North
Sea Fleet, China, has said that Pakistan has maintained peace and
stability in South Asia by means of its peaceful, independent and
non-aligned foreign policy.

 He was addressing a ceremonial parade held at the Pakistan Navy
dockyard in connection with the 50th anniversary of Pakistan-China
diplomatic relations.

Rear Admiral Zhang said Pakistan was a great nation. The people of
Pakistan were very hard-working and courageous, he said and added
that the two countries were close neighboursm, shared common waters
and mountains and their friendship enjoyed a long history and was
time-tested.

The Chinese rear admiral said that they had come a long way to this
beautiful city of Karachi and were impressed by the warm welcome
accorded to them by the Pakistan Navy. He said he was confident
that the visit would strengthen the relations between the navies of
the two countries and open a new chapter in the Pakistan-China
friendship.

Rear Admiral Zhang wished prosperity and further development for
Pakistan and its people. Earlier, on his arrival at the venue, he
was presented a guard of honour. He inspected the guard and
appreciated its turnout. Flags of the two countries were also
hoisted and national anthems of Pakistan and China were played by
Pakistan Navy and PLA (Navy) bands.

In his welcome address, Rear Admiral Shahid Karimullah, Commander
of Pakistan Fleet, said that Pakistan-China relations represented a
model for peaceful, co-operative and friendly relations between
countries with different political and social systems and cultural
backgrounds. "Our friendship has stood the test of time under all
circumstances, whether it be war or peace, economic or political
difficulties or even international pressure. It has never wavered",
he added.

Rear Admiral Karimullah said: "Since the induction of PNS Nasr ,
the fleet tanker from China, our mutual relations had improved at a
steady pace. Development of Jalalat- type missile boats, equipped
with state-of-the art anti- ship missile, acquisition and
successful testing of surface-to-air missile system on board Type-
21 destroyers are the hallmark of our developing naval relations",
he added.-APP

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20010526
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International Monetary Fund opposes direct lending to provinces
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Ihtashamul Haque

ISLAMABAD, May 25: The International Monetary Fund has opposed the
provinces demand that they should be allowed to directly negotiate
and borrow from the international donor agencies.

Official sources said here on Friday that the IMF review mission,
which left for Washington on Thursday after having spent about
three weeks in Pakistan, had told the government that external
assistance to provinces must be approved by the federal government
and that they, in principle, should not be allowed to seek any
foreign funding directly.

Sindh Finance Minister Abdul Hafeez Sheikh had demanded of the
federal government on Thursday in Karachi to allow provinces to
have direct lending from the foreign donor agencies.

However, the sources said donors were not ready to offer any
loaning facility to the provinces directly. They said the federal
government should continue with the practice of negotiating loans
from foreign lending agencies, which could be extended to the
provinces later.

The government of Sindh, sources said, needed additional funding to
run its affairs. However, it was told that unless the National
Finance Commission was revised or constituted afresh, no new funds
could be made available to the province.

According to sources, in the first half of 2000-2001, Sindh's
overall spending was limited to Rs30 billion, compared with a
budgetary target of Rs39 billion. Only 80 per cent of the
authorized amount on non-wage outlays was spent, and except for
poverty alleviation programme, no "major expenditures" were
authorized. For the Annual Development Programme, only Rs1.4
billion were disbursed compared with a half-year target of Rs4.5
billion, reflecting in part the fact that the provincial finance
managers had started reviewing the "graveyard of development
projects" with the objective to stop spending on low priority, half
finished projects.

On the recurrent side, savings were achieved through a ban on new
recruitment (with the exception of health and education staff) and
the elimination of approximately 12,500 civil service positions
(out of a total of about 450,000).

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20010520
-------------------------------------------------------------------
Strategy to create 2 million jobs in next fiscal okayed
-------------------------------------------------------------------
By Our Staff Reporter

ISLAMABAD, May 19: The Chief Executive Gen Pervez Musharraf here on
Saturday approved a pro-active national employment strategy
targeted to create nearly two million additional jobs during the
next financial year. He highlighted construction, in particular
housing, together with small- and medium-scale industries and IT as
the areas of special focus and attention in view of their high
employment generation capacity.

He was reviewing a presentation on employment strategy by the
Planning Commission.

Faced with an economic slowdown due, in large part, to the vicious
debt trap and the ongoing drought, Gen Musharraf emphasised the
need for major supporting policies by the Government to maintain
the present employment levels and generate additional job
opportunities. In this regard, he referred to construction and
housing as areas carrying the twin advantage of providing housing
to the shelterless millions as well as generating major economic
and manufacturing activities leading to creation of jobs for the
skilled and unskilled hands.

The chief executive also accorded approval, in principle, to the
launching of major low-cost housing projects both in the urban and
rural areas. He directed that consideration be given by the
provincial governments to the possibility of allowing ownership
rights to small houses built on state land in the rural areas on
nominal payment.

He also directed the ministry of housing to draw up housing
programmes for the urban areas and in particular for dwellers of
the Kacha Abadis to enable their shifting to cleaner and healthier
environs.

The chief executive also directed the ministry of finance to work
together with the State Bank to generate special funds for the
housing sector to be disbursed as loan at affordable cost to the
middle and lower-income groups. Pakistan is estimated to require
400,000 additional housing units every year against the 160,000
units being added annually.

The ministry of commerce was asked to focus on labour-intensive
export growth as each billion dollars' of exports is estimated to
create two million jobs.

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20010524
-------------------------------------------------------------------
Judges case to be referred to Supreme Judicial Council
-------------------------------------------------------------------
Rafaqat Ali

ISLAMABAD, May 23: The government has decided to refer the case of
two judges to the Supreme Judicial Council in the next fortnight
against whom scathing remarks were made in the SGS case by a seven-
member bench of the Supreme Court.

Reliable sources told Dawn that the government, after giving
sufficient time to the two judges to avail themselves of any legal
remedy, had finally decided that the law should take its course, if
the judges failed to tender their resignations. The government was
in no mood to earn a bad name because of the judges who were
considered "loyal" to the previous government, they added.

A seven-member bench of the Supreme Court had made remarks against
Justice Malik Qayyum and Justice Rashid Aziz Khan on the appeals of
Ms Benazir Bhutto and Asif Ali Zardari against their conviction in
1999 when Justice Rashid Aziz was the Chief Justice of the Lahore
High Court and Justice Malik Qayyum headed the Ehtesab Bench. The
SC bench while sending the case for retrial, had held that
conviction of Ms Bhutto and her spouse was the result of bias.

Sources said that drop scene was expected in the first week of June
when the highest judicial functionary would be back in the country
after a month-long visit to North American countries.

The SC judgement was passed on April 6, 2001, giving sufficient
time to judges to decide about their future line of action. The
sources said in case the judges refused to resign, a reference
under Article 209 would be made by the President to the Supreme
Judicial Council.

The Supreme Judicial Council will be headed by the chief justice of
Pakistan along with two senior judges of the apex court and two
senior chief justices of the high courts.

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20010524
-------------------------------------------------------------------
IMF says situation remains difficult
-------------------------------------------------------------------
Reporter

ISLAMABAD, May 23: The International Monetary Fund has told the
authorities that Pakistan's macroeconomic situation remains
difficult and structural weaknesses persist despite some favourable
developments related to inflation and external current account
deficit.

According to sources, a visiting IMF review mission, led by Clausse
Enders, again held a detailed meeting here on Wednesday with a
government team led by the Secretary-General, Ministry of Finance,
Moeen Afzal, and said that achieving of the programme targets in
the near future, specially with regard to foreign exchange
reserves, would be challenging.

The mission said that sustained implementation of strong-demand
management policies and a steadfast adherence to the structural
reform agenda would be essential to consolidate the achievements so
far made, and build a solid foundation for sustainable high rates
of growth over the medium term.

The sources said that the mission also believed that given the low
level of reserves, careful co-ordination of monetary and exchange
rate policies would be critical for the success of stabilisation
programme in the short term.

 However, the mission observed that the authorities were committed
to continuing to move to genuinely flexible exchange rate policy.
In this behalf the intention of the authorities to discontinue the
sale of foreign exchange to inter-bank market to finance oil
imports, reduce gradually purchases in the kerb market and
implement measures to develop inter-bank market were appreciated.

The sources said that Pakistan was also told that there existed
significant problems in the way of achieving the programme
objectives. Deceleration in agricultural growth and its
implications for economic activity could be more severe than
projected. Exports could be more adversely affected than currently
envisaged by slowdown in the US economy.

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20010525
-------------------------------------------------------------------
Azerbaijan, Pakistan to boost defence ties
-------------------------------------------------------------------

ISLAMABAD, May 24: Pakistan and Azerbaijan have agreed to develop
partnership between the two countries by initiating
institutionalized defence co-operation.

This co-operation would include exchange of visits between the
personnel of armed forces of the two countries in order to promote
military co-operation which may include areas like military
training and education, technical know-how, and information as well
as co-operation in medical, logistics and other military fields.

A joint statement to this effect was signed by the visiting Defence
Minister of the Republic of Azerbaijan, Colonel General Safar
Abiyev and Foreign Minister Abdul Sattar here on Thursday.

According to the joint statement the two sides would further sign
MoUs, protocols and agreements in specific fields relating to
military and defence co-operation.

It was agreed that the ministries of defence of the two countries
would take the above mentioned measures in order to enhance defence
co-operation between Pakistan and Azerbaijan.

The Minister of Defence of Azerbaijan Colonel General Safar Abiyev
is on an official visit to Pakistan on the invitation of the
Foreign Minister Abdul Sattar.

In addition to his meeting with Chief Executive and the Foreign
Minister, the visiting dignitary during his stay also held
consultations with the ministers for interior, petroleum and
natural resources as well as secretary defence.

He also visited the Military College of Signals, Rawalpindi,
National Defence College, Islamabad and the Pakistan Ordnance
Factories, Wah.-APP


BUSINESS & ECONOMY
20010523
-------------------------------------------------------------------
4.5% a year growth rate target envisaged
-------------------------------------------------------------------
Sabihuddin Ghausi

KARACHI, May 22: The government intends to achieve a growth rate of
4.5 per cent a year for next three years and wants to narrow down
the fiscal deficit to 3.5 per cent in 2004 from 5.3 per cent.

In a three-year plan, (01-02, 02-03 and 03-04), circulated among
all the four provinces, the federal government has set for
agriculture, a growth rate target of 3.5 per cent, manufacturing
6.9 per cent and for other sectors 5.2 per cent a year.

Total revenue generation in the terminal year of the plan -2004-is
pitched at Rs851.9 billion. It includes Rs722.8 billion tax revenue
which is more than 80 per cent of the expected tax collection in
the current fiscal year. Non-tax revenue, too, is expected to
increase significantly to Rs129 billion.

The plan has set a target of revenue increase to 18.5 per cent of
the GDP in 2004 from 16.3 per cent of the GDP at present. Current
expenditure is also expected to come down from 18.6 per cent of the
GDP to 17.8 per cent of the GDP. In real terms current expenditure
is targeted at Rs818.5 billion in 2004.

However, the size of the development outlay is set to increase to
4.2 per cent of the GDP from 3.2 per cent at present. If everything
goes according to the plan, the federal planners hope to prepare a
development outlay of Rs 198.4 billion in 2004.

National savings ratio is expected to touch 15.4 per cent mark in
2004 when the government expects a total fixed investment of
Rs762.5 billion. Greater investment-Rs572.1 billion - is likely to
come from private sector while public sector investment is
estimated at Rs190.4 billion.

Narrowing down of the current account to 1.1 per cent of the GDP
and building up foreign exchange reserves is one of the key targets
of the three-year plan, which anticipates 800 million dollars
imbalance after exports have fetched 10.75 billion dollars, import
bill amounts to 11.75 billion dollars, and there is a substantial
improvement in the remittances and inflow of direct foreign
investment.

Inflation rate is expected to be kept within 5 per cent range all
through these years.

With these targets, the government has drawn up a strategy, which
seeks to promote small and medium business enterprises, broadening
of tax base by way of documentation of the economy, reduction of
multiplicity of taxes, application of GST throughout the country,
stepping up resource mobilization efforts of the provincial
governments including tax on agricultural income, generation of
resources at district level, adequate system of user charges,
rationalization of government expenditure and ensuring adequate
flow of funds towards the poverty alleviation projects, improving
elasticity in the federal, provincial and local taxes and a
constant review of the government's tax laws and policies.

Provinces are reported to have expressed serious reservations on
the federal government's ambitions and strategy, and are reported
to be seeking further explanations and details of the plan from
Islamabad.

"A collection of Rs400 billion taxes this year looks doubtful,"
well placed sources in Sindh government said who was skeptical of
Islamabad's political will to enforce GST at all levels and in all
parts of the country. "If this being so, where would you collect
Rs700 billion plus taxes in next three years, " he asks.

Then there is another big question on the operation of this plan
after the devolution programme is put into practice from August
this year. Bureaucrats in Sindh look totally confused on the
political, administrative and economic problems they would
encounter after the nazims, naib nazims, union councilors and
district corporators take charge of their areas.

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20010522
-------------------------------------------------------------------
Shaukat sees 8pc growth in large-scale industry
-------------------------------------------------------------------
Reporter

KARACHI, May 21: Federal Finance Minister Shaukat Aziz estimates 8
per cent growth in the large scale industry in the current fiscal
year but has no idea on the overall economic growth.

"I have not read," quipped the minister on Monday afternoon when a
big group of newsmen drew his attention towards a newspaper report
which quotes him saying in a pre-budget seminar on Sunday at
Islamabad that Pakistan's growth rate in the current fiscal is
below three per cent.

The Minister was the chief guest at the award distribution ceremony
for the corporate excellence to the best managed companies in 1999
on Monday organised by the Management Association of Pakistan
(MAP).

After the prize distribution ceremony, Shaukat Aziz responded to
the questions of the waiting newsmen and said that he expects the
International Monetary Fund (IMF) to release the promised third
tranche under Standby Facility agreement on schedule.

"I believe the IMF review mission is satisfied with Pakistan's
economic performance in last three quarters," he said alluding to
his meeting with the visiting IMF team on Sunday.

Earlier in his speech before the members of the MAP the Minister
spelt out the constraints within which he and his team was busy in
making budget for the next fiscal.

"We want to focus on growth, investment and carry out the economic
reforms that obviously demands cost," he said while pointing out
the fiscal constraints.

"Revival of investors' confidence, investment and growth,
containing inflation and poverty alleviation are few of our budget
objectives," he pointed out while stressing the point that "enough
fiscal space is not available."

Deficit financing, he said, is not the smart solution of the
economic problems as that warrants more borrowing which means
further increase in the fiscal deficit. Within a very limited
fiscal space, he said, the government has decided to compensate the
employees.

He justified the price increase of petroleum products by his
government in the past."We could have cheaper fuel with deficit
financing but after mortgaging our future generations," he offered
logic for his government's policies.

The Minister claimed that inflation rate in the current fiscal year
has been contained to 4.7 per cent. He, however, acknowledged the
public scepticism on government's claim and hurriedly pointed out
that all government's figures are now being checked and re-checked
by the international donors.

The large scale industry, too, has grown by 8 per cent during this
fiscal year. However, he said that there is all the need to revive
investors' confidence in the government's economic policies to
promote investment and growth.

A very limited fiscal space also inhibits the government to provide
enough funds for social sector. Nonetheless, Shaukat Aziz said that
the government has provided 20 per cent more funds for education
and has also increased allocation for health.

The Minister asked the corporate sector to come forward in a big
way and help government in achieving the social sector objectives
by adopting schools.

Speaking on the corporate and management issues, he said that
change is a permanent factor and hence a successful manager is
expected to be innovative, receptive to the changes going around
the world and maintaining an update information and knowledge.

Earlier Moeen Fudda, President of the MAP informed the Minister
that the Association has so far organised 900 seminars, eight
management conventions and one international seminar.

Those who received the MAP Corporate Excellence award from Shaukat
Aziz were Pervaiz Ali of Al Ghazi Tractors, Pervaiz Khan of Lever
Brothers and Humayun Murad of Orix Leasing. Azhar Khan of Bannu
Wools, Javed Anwar of BOC Pakistan and Mohammad Chowdhry of Adamjee
Insurance received certificates.

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20010522
-------------------------------------------------------------------
Additional Sales Tax may be doubled
-------------------------------------------------------------------
Reporter

LAHORE, May 21: The Central Board of Revenue (CBR) is considering
to double the existing 1.5 per cent additional sales tax on
unregistered traders and firms to three per cent.

The indication to this effect came from CBR member (sales tax) Riaz
Malik during a meeting with businessmen at the Lahore Chamber of
Commerce and Industry (LCCI) here on Monday.

Although Malik did not say it in so many words, he hinted at
doubling the additional sales tax to make the unregistered traders
and firms to register themselves under the sales tax.

He said the revenue collected through additional sales tax had
dropped to about Rs4 billion from around Rs6 billion. He, however,
admitted that the target of forcing unregistered firms or traders
through such penal action had failed to deliver because of several
factors not in the control of the tax authorities.

Malik also said the traders whose turnover exceeded Rs5 million
would have to pay 15 per cent tax from the next financial year
instead of two per cent turnover tax they had so far been paying.
He said the retailers with a turnover of Rs1-5 million would be
exempt from 15 per cent sales tax and would pay two per cent
turnover tax on their sales.

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20010522
-------------------------------------------------------------------
Government plans $20 billion export target by 2005
-------------------------------------------------------------------
Reporter

ISLAMABAD, May 21: The Export Market Development Fund (EMDF) meets
here on Tuesday to consider measures for boosting exports by 100
per cent at $20 billion by the year 2005 and review the export
performance for the current fiscal, commerce ministry sources told
Dawn on Monday.

The meeting, to be presided over by Federal Minister for Commerce
and Industries Abdul Razak Dawood, would also approve Rs142 million
budget for the next fiscal. Officials of Export Promotion Bureau,
State Bank of Pakistan and ministries of finance and commerce will
also attend the meeting.

Pakistan is targeting $20bn exports in 2005 and $30bn by 2010 from
the current year's of $10bn. The current textile exports of around
$6bn are projected to touch $14bn in 2005 and $20bn in 2010.

Leather exports, now at $500 million, are estimated to double at $1
billion in 2005 and triple at $1.5 billion by the year 2010.
Engineering exports are targeted to touch $1 billion in next four
years from the current level of $200 million and further jump to
$2.5 billion in 2010.

The meeting is expected to approve Rs142m budget for the year 2001-
02 - Rs65m for construction of an EPB building in I-9 sector of
Islamabad, Rs18m fund for export promotion purposes, Rs38m for the
accommodation of foreign guests and EPB officials and Rs21m for the
payment of rent of EPB building.

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20010520
-------------------------------------------------------------------
PIB's get poor response
-------------------------------------------------------------------
Reporter

KARACHI, May 19: The State Bank on Saturday borrowed Rs 898 million
for the government by selling Pakistan Investment Bonds of three
year and five year maturity. The amount sucked in from a fairly
liquid inter-bank money market was much lower than the sale target
of Rs 3 billion set earlier by the central bank.

SBP said it sold three-year PIBs worth about Rs 429 million and
five-year PIBs worth Rs 469 million at par value. SBP had received
total bids worth about Rs 978 million of which it accepted bids
worth Rs 898 million and scrapped the rest. Three- year and five-
year bonds carry 12.5 and 13 per cent interest payable through six-
monthly coupons.

The central bank did not sell 10-year PIBs. The auction of 10- year
bonds will be held next month. Senior bankers said most corporates
showed little interest in the auction of three-year and five-year
bonds on Saturday as they were rather interested in 10-year paper.
"Most corporates invest their employees fund in PIBs and since they
are switching over from 10-year defence saving certificates to PIBs
naturally they want to buy PIBs of the same tenure," said treasurer
of a state- run bank.

He said banks themselves were least interested in investing surplus
funds in three and five year PIBs chiefly because they know that
they can earn more profits by employing these funds in much shorter
tenures. Some bankers even say they also fear occurrence of an
inverted yield curve in future meaning that the short term interest
rates might rise above medium and long term rates.

The government launched long term Pakistan Investment Bonds last
year to attract institutional funds into banking sector. It has so
far borrowed a little less than Rs 42 billion through PIBs in five
auctions including that of Saturday. The launch of these bonds has
helped the government in meeting its borrowing requirements and
enabled SBP to mop up excess liquidity from the market.

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20010520
-------------------------------------------------------------------
Guidelines for exporters
-------------------------------------------------------------------

KARACHI, May 19: Pakistan's Embassy in Tokyo has prepared
guidelines for Pakistani exporters willing to export their products
to Japan. According to these guidelines, released by Export
Promotion Bureau (EPB) here on Saturday, there are number of
contacts in Japan, information facilities on various websites and
libraries, list of Japanese importers, etc.

Pakistani exporters can benefit from free facilities and useful
information.

Japan External Trade Organization (JETRO) trade directory provides
list of importers in Japan and their addresses, contact persons.
This directory is now available with EPB on CD-ROM and in book
form. The interested exporters can also get information about
Japanese companies on the website of Japan Chamber of Commerce and
Industry at www.jcci.or.jp/home-e.html.

Exporters can register on this website and post their own offers.
Importers list can also be obtained through Pakistani Embassy
website at www.pakistaniemb.itgo.com. Pakistani Embassy can also
circulate the offer of Pakistani company to Japanese importers
through JETRO Tokyo.

The Embassy has suggested Pakistani companies to send the
photographs of their production units, offices and detail
specifications of products directly to the importers.

Japanese importers are very careful in starting new relationships
and therefore they like to see the past history of the company for
judging the consistency in quality, delivery schedule.

IBO Osaka display centre provide opportunity for display of
products free of cost. Pakistani exporters can contact this display
centre at the following address: IBO OSAKA, Rinku-Orai Tower
Building, Kita-1, Rinku, Izumisano City, Osaka Japan.-APP

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20010524
-------------------------------------------------------------------
Foreign investment banks role restricted
-------------------------------------------------------------------
Khaleeq Kiani

ISLAMABAD, May 23: The government has decided to restrict
international investment banks from winning multiple contracts of
financial or technical advisory service in the privatization of
state-owned entrepreneurs (SOEs).

Official sources told Dawn that a decision to this effect was taken
by the Privatization Commission Board (PCB) recently to avoid
monopolistic role of foreign banks in privatization transactions.
An official at the Privatization Commission (PC), however, said
that it was decided "to exclude, or make very difficult, the
possibility of the same investment bank winning multiple
contracts". It has also been decided that a private sector member
of the PCB should be included regularly in the in-house evaluation
committee of PC for the selection of a financial advisor.

Pakistan is pursuing, though very slowly, the sale of around 50
SOEs, including mega transactions like Pakistan State Oil (PSO),
Pakistan Telecommunication Company Limited (PTCL), Oil and Gas
Development Company Limited (OGDCL), Pakistan International
Airlines (PIA), besides electricity and gas utilities, banks and
financial institutions.

The decision has come in the wake of past experience that staffing
constraints make it difficult for a single firm or investment bank
to carry out three major transactions in one country in a good
manner. Moreover, difficulties with the firm in one transaction
could spill over into other companies as well that could result in
increased risk exposure of the Pakistan government.

The sources said that in financial proposals, focus would be on
reducing the retainer fee instead of success fee by attaching a
higher weight to the retainer fee so that success fee emerged as an
incentive to fetch better price. In technical proposal, weight on
firm qualifications has been increased and weight for team
qualifications reduced.

It has also been decided that focus should be made on experience of
the investment bank in the region and sector while evaluating
investment banks that is now considered more relevant than the
worldwide experience in view of the fact that a bank might have
done a good job worldwide but had no experience in the relevant
sector or other parts of the region.

In the final scoring for the combined technical and financial
proposal, weight for technical proposal has been reduced to 80 per
cent from 90 per cent, while simultaneously ensuring that the
technical scores are recalibrated so that the highest technical
score - like the highest financial score - is 100.

Initially, the commission has been assigning 80 per cent weight to
technical proposal and 20 per cent to the financial bids. Of late,
the procedure was changed to give 90 per cent weight to technical
proposals and 10 per cent to financial bids. This included 25 per
cent points for specific firm or consortium's experience relating
to the assignment, 25 per cent for adequacy of work plan and
methodology, 40 per cent for qualification and competence of key
staff, 10 per cent for qualification and competence of the project
leader.

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20010524
-------------------------------------------------------------------
Mari Gas Field shareholders rate of return hiked
-------------------------------------------------------------------
Reporter

KARACHI, May 23: The Economic Coordination Committee (ECC) of
Cabinet has allowed Mari Gas Company Limited a 30 per cent Rate of
Return on shareholders' funds, up from the current 22.5 per cent,
and the company has also been permitted to generate $20 million per
annum for exploration outside the Mari Gas Field.

The development comes as two pieces of good news for the
shareholders in Mari Gas Company Limited, who had resigned to a
Return of 22.5 per cent ever since the company was listed on the
stock exchange in 1994. Wednesday's trading saw the share in Mari
Gas gain 25 paisa to close at Rs 20.85.

Mari Gas Company Limited is the main supplier of gas to five plants
of the three fertilizers companies and Wapda's thermal power unit
at Guddu.

Pakistan ranks sixth largest producer of urea in the world. And 70
per cent of all urea produced in the country, uses gas supplied
from the Mari Gas Field.

The company has been operating under the Gas Price Agreement (GPA)
signed with the government, whereby it is allowed a fixed rate of
return on shareholders' equity, irrespective of the amount of
profit it generates. With the enhancement in Rate of Return,
shareholders would receive 30 per cent dividend, effective July 1,
2001, instead of the 22.5 per cent.

Also, the company can generate exploration funds up to $20 million
or 30 per cent of the company's total revenue, whichever is less
per annum, under the GPA. Such funds could be invested for
exploration activities outside Mari Gas Field.

The Company Secretary Khurram Khan said that various options were
being explored to apply for independent blocks or seek joint
venture partnership with the existing concession holders. "The
long-term strategy would be a combination of both these options",
he affirmed.

Mari Gas Field boasts the largest single gas reservoir in the
country. Presently, gas production only comes from the upper (Habib
Rahi) reservoir, which began in 1967. Two exploratory wells were
drilled in 1997-98 and the effort resulted in discovery of a new
and independent reservoir in Goru B formation of Mari Gas Field.
The composition of the newly discovered gas was believed to be
suited best for power generation, a happy augury for the country,
which seeks to substitute expensive and imported furnace oil, with
indigenous gas, for power generation.

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20010525
-------------------------------------------------------------------
Government meets bank borrowing target
-------------------------------------------------------------------
Mohiuddin Aazim

KARACHI, May 24: The government has met the target set for its net
borrowing from banks two months before the end of the fiscal year
and fiscal managers say chances for a reversal in the trend are
slim.

Senior bankers said net government bank borrowing that stood at
Rs18 billion at the end of the first week of April totalled minus
Rs18 billion by the end of the month. In other words the government
retired Rs36 billion of net bank credit within three weeks. Under
the $596 million IMF standby credit programme the government is to
keep its net bank borrowing at Rs14.5 billion at the end of the
current fiscal year in June.

Bankers said gross bank borrowing in the first 10 months of this
fiscal year stood at Rs48 billion but since the government placed
Rs66 billion in its special debt repayment account its net bank
borrowing fell to minus Rs18 billion by end of April.

Bankers say what has helped the government cut its net bank
borrowing is mobilization of about Rs42 billion through sale of
long-term Pakistan Investment Bonds a large chunk of which forms
non-bank credit.

It is yet to be seen if the government can keep its net bank
borrowing within the target level of minus Rs14.5 billion by end of
June but fiscal managers claim the government can do it.

What brightens this chance is the fact that the government will
have at least one more opportunity to raise non-bank debt through
PIBs next month. Bankers believe the government will be able to
sell a substantial amount of these bonds to non-bank sector next
month.

Their optimism is based on the fact that in June the State Bank
will sell 10-year PIBs that are most attractive for the non-bank
sector. Earlier this month the central bank had sold three-year and
five-year PIBs that received poor response as the corporates wanted
to shift pension and provident funds of their employees invested in
defence saving certificates of 10 years maturity to PIBs of the
same maturity.

Much would also depend on the government's ability to collect tax
revenue. The tax revenue target set under the IMF programme is
Rs417 billion for this fiscal year: In the first 10 months the
government has collected Rs306 billion and the target seems bound
to be missed.

If the slippage in the target is big and the government fails to
seek relaxation in the target from the IMF then its ability to keep
net bank borrowing at minus Rs14.5 billion may come under question.

This scenario may become more likely if investment in national
saving schemes fall further - or if the government fails to sell a
substantial amount of its long term investment bonds to non-bank
sector next month.

Investment in national saving schemes has been on the fall for two
reasons: First the government banned institutional investment in
these schemes in April last year and second it has started pruning
the rates of return on instruments of national saving to make them
market-based on the demand of the IMF.

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20010523
-------------------------------------------------------------------
Rupee falls to lifetime low
-------------------------------------------------------------------
Mohiuddin Aazim

KARACHI, May 22: The rupee on Tuesday fell to its lifetime low at
62.12/62.17 to a US dollar in inter-bank market as some banks
started buying greenbacks to make corporate debt payments and to
open import letters of credit.

Senior bankers said the buying euphoria was so acute that for some
time the rupee fell to 62.20 to a dollar but at the close of normal
trading session it finished at 62.10/62.15 for spot buying and
selling.

On Monday the rupee had closed at 61.90 to a dollar - also an all
time low in inter-bank market against the weekend close of
61.73/61.78. In other words the local currency has shed 39 paisa to
a US dollar in inter-bank market within first two days of this
week. In the open currency market the rupee closed at 65.10/65.15
against US dollar on Tuesday down from 64.90/64.80 on Monday.

At the end of last week the rupee had finished at 64.55/64.65 to a
US dollar in open market. Thus in the open market the local
currency has shed 50 paisa in the first two days of this week.

So far during this fiscal year the rupee has depreciated by more
than 17 per cent in inter-bank market amidst a gradual opening up
of foreign exchange market on the demand of the IMF.

WHAT IS WEAKENING THE RUPEE: Senior bankers say the demand for
dollar is growing in the inter-bank market amidst low supplies.
They say in the first two days of the week the market has seen an
outflow of about $40 million through private and official debt
payments; oil import bills and outward remittances by portfolio
investors and others. This has happened amidst slow realization of
export proceeds and in the absence of any financial help from
international financial institutions. Some bankers say the State
Bank has shifted larger parts of oil import bills onto the market
but central bankers are reluctant to verify or deny this statement.

Under an agreement with the IMF in connection with its $596 million
standby credit programme the State Bank is supposed to stop
providing foreign exchange for oil import bills by the end of the
current fiscal year in June.

OPEN MARKET PROBLEMS: Until March this year the State Bank was
purchasing dollars from the open market to fill in the gaps in the
balance of payment. But then it stopped this practice and asked
state-run National Bank to buy foreign exchange from money changers
and convert the same in dollars in Dubai. Sources close to SBP say
they were expecting that NBP would buy at least up to $500 million
in the current quarter but so far it has bought only about $100
million. It is obvious that National Bank would not be able to meet
the buying target anyway.

This shortage is also telling upon the exchange rates movement in
inter-bank market. Lower than targeted purchase of foreign exchange
from open currency market makes it difficult for SBP to meet the
rising demand for dollars. Hence the rupee depreciation.

RUPEE'S FALL IN KERB: Currency dealers say what is weakening the
rupee in kerb is that since the supply of dollar has dried up in
the market. "There has not been any supply for the past one month.
People are only buying dollars," said president of Forex
Association of Pakistan Malik Bostan.

Exactly a month ago money changers were stopped from carrying
foreign currencies to Dubai for conversion into dollars and NBP had
taken up the responsibility. But during the first one month of its
operation NBP only bought foreign currencies from money changers
and did not sell them dollars.

"This has left Forex Association of Pakistan with no weapon to
fight against speculators who are out to buy dollars. Previously
when we are allowed to bring in dollars from Dubai we were able to
intervene in the market," said Bostan.

Back to the top
EDITORIALS & FEATURES
20010520
-------------------------------------------------------------------
The Kidney Centre - denationalization
-------------------------------------------------------------------
Ardeshir Cowasjee

Anyone writing about facts and figures must check and double check
and this is best done at the source of the required information.
For a writer to write, he must be able to get to the source and the
source must be available and co-operative.

In the case of the Pakistani press, all government sources of
information tend towards the belligerent, the bellicose, as not
only do they have much to hide, not only do they fudge and fiddle,
but they are naturally highly suspicious of the motives of the
writer. Their confirmed belief is that the revelation of facts is
contrary to the national interest, that it is somehow bound up with
a personal interest, and that facts are per se strictly
confidential, if not top secret.

Experience has shown that such is the case when checking with our
military government and its officers. During the past two months
twice I have been accused of blackmail, twice I have been directly
called a blackmailer when attempting to establish facts - once by a
retired lt-general and once by a retired brigadier. Our military
officers are not conversant with the meaning of the words
'blackmail' or 'blackmailer'. Since they are likely to mess us up
till Kingdom come, it is strongly recommended that they are all
taught right from the start - from Kakul down to the Staff College
and the National Defence College - how and when, how not and when
not to use the two words or their derivatives.

To the credit of our army officers, it must be said that when
presented with a copy of the meaning of the word as defined on page
250 of Volume II of the XX volume set of the second edition of the
Oxford English Dictionary published in 1989 they have immediately
simmered down and apologized as best as they could, considering how
and what they have been taught.

Now to the letter emanating from the information department of the
government of Sindh, printed in this newspaper on May 16,
responding to my column of May 13. This provincial department, like
its parent ministry at the centre, is redundant. It informs the
people on the basis of the maxim: If you cannot convince, confuse.
This maxim has been a guiding light of our government 'information'
people since 1948.

The letter of May 16 referred to "The spokesman, health department,
government of Sindh" who had provided a handout to the information
department which they had forwarded to be published in toto. I have
been trying to locate the 'spokesman' for the past three days,
unsuccessfully.

The 'spokesman' defended the government of Sindh's nationalization
of the Kidney Centre on the basis of what was discussed at, and has
been recorded in the minutes of a meeting of the board of governors
held on January 24,1996. The board had approved an approach to the
provincial government in connection with the establishment at the
Kidney Centre of a 'Postgraduate Centre for Nephrology and
Urology.' A preliminary charter of the postgraduate centre was
drafted, the first paragraph of which reads :

Short title. The Centre may be called The Postgraduate Centre for
Nephrology and Urology of The Kidney Centre.

The Board never intended, nor resolved, that the Kidney Centre
should cease to exist or be reconstituted and reorganised in
accordance with the nationalization notification of Ordinance No.XI
of 2001, dated February 10,2001, which reads : The following
Ordinance made by the Governor of Sindh hereby published for
general information : The Dorab Patel Postgraduate Training
Institute for Nephrology and Urology, Ordinance 2001. Sindh
Ordinance No.XI of 2001. An Ordinance to reconstitute and
reorganize The Kidney Centre, Karachi.

The 'spokesman' in his letter stated : It is believed the original
draft [of the ordinance] was prepared by the late Justice Dorab
Patel. This is absolutely incorrect. Who led him to so believe ?

He went on to say, "The Provincial Health Minister has never held a
press conference on the issue of Kidney Centre." May I refer him to
a news report by Sarafaraz Ahmad on page 3 of the Metropolitan
section of Dawn of April 142001 under the heading 'Government
yields to pressure - Kidney Centre deprived of PG status.'
Reportedly, The Sindh Health Minister, Maj-Gen Ahsan Ahmad (Retd),
announced that the provincial government had decided to withdraw
the Ordinance.

To whom did the Health Minister address himself, announce, state,
etc, if not to the press?

The 'spokesman' misquoted Mr Razak Taba. Anyone who has any doubts
why Mr Taba withdrew his offer of a donation of Rs.75 million to
the Jinnah Hospital may ask him directly, or refer themselves to Dr
Rashid Jooma, whose letter mentioning this withdrawl was published
in this newspaper on May 6 2001.

Which donors, which board of governors of a well-run solvent
institution would choose to hand it over to a government and its
chosen functionaries, all so reputedly gifted in the art of
misgovernance and destruction? Ordinance XI does this.

I reproduce an extract from letter No.SO-V(ME)/3-73/2000 dated
1/3/01 from the additional secretary (Tech.), health department,
government of Sindh, to the administrator, Dorab Patel Training
Institute for Nephrology and Urology. [The administrator was
appointed by the ousted BoG of the Kidney Centre. Similar letters
were sent at the beginning of April and May.]

"The Governor of Sindh has been pleased to pass the following
orders :

(i) All salaries and allowances payable to persons in the
employment of The Kidney Centre on 1st March 2001, as are detailed
in the report shall be paid to such employees in the usual manner.

(ii) All payments required to be made to suppliers to the Kidney
Centre which are or will become due on or before 1st March, 2001
and are detailed in the report shall be paid as soon as possible
after falling due.

(iii) All other payments which are, or become due, from the Kidney
Centre to any third parties on or before 1st March, 2001 and are
detailed in the report shall be paid as soon as possible after
falling due.

(iv) Any funds which need to be withdrawn from the funds of the
Kidney Centre and any cheque which needs to be signed and issued
shall be withdrawn, signed and/or issued by the joint signature of
any two of the persons authorized to operate the accounts of the
Kidney Centre as on the day immediately preceding the entry into
force of the Ordinance.

This is the way the government runs the affairs of the Institute
pending denationalisation, the Board having been removed.

Trying to explain to me last week how the ordinance had come about,
Shahid Firoz, Vice Chairman of the Economic Development Council,
termed it a mishap. It had been brought about through a
misunderstanding, a misconception, the misreporting of facts, a
communication gap, and so on and so forth. He later faxed to me a
note :

The government of Sindh is pro-actively pursuing a policy of
private sector participation in its quest of good governance and
efficient service delivery. The creation of the Economic
Development Council is a milestone in this context.

"As a consequence of its mandate, the EDC is soliciting interest
from the private sector to enable a phased denationalization of
over one hundred schools and hospitals, in addition to empowering
the private sector to maintain and upgrade playgrouds, parks, and
the like. These acts of denationalization/ divestment will be on
the basis of appropriate legal agreements which will constitute the
basis of the relationship between the government and the potential
representatives of the community such as to ensure a transparent
and effective functioning of the institutions concerned and to
assure certain levels of service delivery to the citizens. The
regulatory framework for this is in an advanced stage of
development."

Under the present circumstances which private sector man will show
interest ?

On May 15, Governor Mohammadmian of Sindh called a meeting of the
members of the removed board of governors, men of the ministry and
other government officials - a gathering of the damaged and the
damagers. The former members were asked to submit a draft of an
amending ordinance.

On May 17, the former chairman of the board, Mian Muhammad Rafi,
wrote to the Sindh health minister, copying the Governor : "With
reference to our meeting held at the Governor's House on May 15,
2001, as required by the minister of health we are submitting the
amendment to Sindh Ordinance XI of 2001 for notification.

On May 17, Dr Jafar Naqvi, who had left the Kidney Centre, vowing
never to return, returned to his office.

Not the end of the story.

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20010525
-------------------------------------------------------------------
You don't shoot admirals, do you?
-------------------------------------------------------------------
Ayaz Amir

THE air of triumphalism attendant upon the extradition of Grand
Admiral Mansurul Haq deserves to be kept in perspective. The Grand
Admiral was an enterprising person. Of that there can be little
question. What heights would he not have scaled in corporate
finance?

This is just one example, albeit a telling one, of how we mix
priorities in Pakistan. The Grand Admiral should have been head of
the State Bank or an investment corporation. And Amer Lodhi,
reputedly the chief whip in the Agosta submarine deal, should have
headed the navy. Since Pakistani lawyers are not famous for being
choosy in these matters, it should come as no surprise to anyone if
Amer Lodhi has been taken on by Mr S. M. Zafar as a client. On his
behalf Mr Zafar, as eminent and expensive a lawyer as they come,
has issued a plaintive statement disclaiming any Lodhi connection
with arms procurement.

The rewriting of memory is one of Pakistan's most thriving
industries. Scams and disasters that would cause upheavals
elsewhere scarcely cause a ripple on the calm surface of our
national waters. That all responsibility is denied is
understandable. But we go one step further and deny the very
existence of the performances enacted, or the calamities staged.

Next to memory-fixing the most productive industry is the
laundering of reputations. In this dry-cleaning business the
dirtiest linen comes out clean. The National Accountability Bureau
is nailing people for misdemeanours, small or breath-taking.
Otherwise who is guilty in Pakistan? Not Benazir, Zardari, Nawaz
Sharif, Saifur Rehman, Ukraine tank dealers, Agosta submarine
commission agents, second-hand Mirage handlers, high-flying
bankers, hospitality-purveying industrialists or entrepreneurs
whose abilities would leave even fiction writers amazed. What's so
surprising then if Mr S. M. Zafar claims innocence on behalf of
Amer Lodhi, a gent whose enterprising abilities get a tell-tale
reference in newspapers every now and then?

In fact, what scope is there for surprises of any kind in a land
where defeated generals (remember Niazi) have the gall to make tall
claims in public? Where generals who deserted their commands
(remember Rahim?) could rise to further heights of fame and glory?
The army is now building an Army Heritage Museum in Ayub Park,
Rawalpindi. True to its hallowed traditions, GHQ has not been able
to resist the temptation of acquiring (a softer name for taking
over) what remained of the much-abused acres of the Ayub National
Park. Once a serene piece of woodland, it has been turned over the
years into a visible symbol of the horrors we are capable of
inflicting on pristine nature in the name of theme parks and
development.

What will the Army Heritage Museum house? What imaginary victories
celebrate? The memory of which conquistadors - Ayub, Yahya, Zia -
preserve? What ghosts, it is worth asking, will keep vigil in its
sacred grounds?

Military architecture, especially as resurrected in Pakistan, can
have a more pulverising effect on the mind than the heaviest
artillery. Look at some of the old British army messes - Baloch and
Pilfers in Abbottabad, to mention only two out of a long line - and
then take a look at the Armoured Corps mess just outside GHQ's
pearly gates and the meaning of this distinction become clearer.
The first are examples of proportion and spartan restraint, the
second a second-rate architect's idea of a Roman building.

As a patriot and ex-soldier (although admittedly a poor one) I am
constrained to accept on trust the army's ambition to build a brave
new world. But I would the more readily be convinced of its ability
to master cosmic themes if it could first demonstrate its expertise
in smaller things. To someone who fumbles with a tyre puncture,
would you entrust the refitting of your engine?

But I began with the Grand Admiral and have meandered down a
different (if somewhat related) path. The important thing to
remember is that the admiral is no flash in the pan, no lone
ranger, but a representative, even if a bold one, of a tribal order
which has held the country in its clutches for the past 50 years.
The Grand Admiral's real fault, and for which he should be
penalized, is that he made his money in too audacious a manner.
Otherwise, there is no shortage of others like him who have created
adequate pension funds for their declining years.

Come to think of it, even for his audacity the admiral is scarcely
to blame because he operated in the times of Asif Zardari and
Benazir's principal secretary, Ahmad Sadik (the last built like
Falstaff and like him in several other ways), when the only game
worth playing in Islamabad was to make money in the grand manner.
The example set at the top encouraged others to follow suit. For
every unsuspecting person caught there must be at least a score of
other high-flyers still laughing at the people of Pakistan.

Indeed Mansur and Sadik were kinsmen and it was through Sadik that
Mansur became Grand Admiral. A favour was done him and he returned
it in kind. Favour for favour: that's how it happens. And if anyone
thinks that in a billion-dollar deal, which is what our Agosta
submarines are worth, it was only the admiral who benefited, he is
living in a world of his own. Mansur made his pile and others made
theirs. Everyone had a good time.

As I say, the admiral went about it too fast. He was also silly
into the bargain. Imagine being picked up by federal agents in
Austin, Texas. Didn't he know he could be extradited to Pakistan?
There are Americans (ask Denise Rich's husband whom Clinton
pardoned as one of his last acts in the White House) who are wanted
in the US but who have no problem staying one step ahead of the
law. Even Ronald Biggs, the great train robber, was smarter and
until his money ran out had no problem staying in Brazil, safely
out of the reach of Scotland Yard.

Or take Amer Lodhi. He has friends in the US but as Mr S M Zafar
informs us, he is a citizen of Monaco. You can't get any smarter
than this. And here's one of our former navy chiefs, someone who
might have been credited with greater sense, making a mistake any
small-time crook would have avoided.

Even so, let us not lose sight of perspective. In the cesspool that
is Pakistan's defence procurement system the tainted fish are so
many that counting them is an impossible task. What contributed
more than anything else to this state of affairs was our holy war
in Afghanistan. With American dollars and Saudi riyals freely
pouring in, fortunes were made and a whole new class of
entrepreneurs came into existence. Islamabad was no better than a
hick-town previously. All the gleaming villas you see in the outer
sectors came up during that golden period.

Now everyone is moaning and pulling a long face because of the
economic downturn. The economy was buoyant while the good times
lasted. With the end of the American involvement in Afghanistan the
dollars stopped coming, international donors got stingy and we were
left to our own devices. Since we have always lived on external
largesse there was only one direction the economy could go: down.
Then of course we had to be carried away by our exuberance and test
our nuclear bombs. That really did it for us. Since then we are
trying to recover our balance. All we are managing in the process
is to raise gas, utility and fuel prices every few months.

The nabbing of the Grand Admiral is a useful piece of theatre. It
is a sop to the mentality of the Pakistani mob (another name for
the people) which, forgetting its misery for a while, will be led
to believe that the walls of Jericho are tumbling and the great are
being called to account.

That line from Faiz that crowns will roll in the dust - sung
beautifully by Iqbal Bano - is not a call to arms. For those on the
wrong side of the tracks it is a cup of consolation. In Christian
doctrine it is the meek who are supposed to inherit the earth. In
communism's heyday the romanticism of the times was typified by
poets like Faiz (and Neruda) although Stalin who dealt with power
and not poetry had a better appreciation of reality than many of
the poets on whom he conferred Orders of Lenin. The fog of
political metaphysics Stalin was wont to cut through by asking such
simple questions as: how many divisions does the Pope have?

But theatre apart, I am sure there is also a more positive side to
the admiral's fall from grace. Others will be more careful, if not
entirely virtuous, in future. Money-taking will not stop but at
least those doing the taking will look out of the window before
counting their money. Let us not forget that across the world vice
inspectors, and other purveyors of morality, get alarmed when
street-walking comes into the open and spreads to respectable
areas. It is not street-walking they object to but its open and
brazen display.

Money-taking in Pakistan had become too open. It will now go back
into the shadows, which is where in any well-ordered society it
rightfully belongs.

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20010526
-------------------------------------------------------------------
A question of image
-------------------------------------------------------------------
Irfan Husain

POLLY TOYNBEE, the Guardian's columnist, is at the forefront of
liberal causes in the UK: day in and day out, she hammers the
government and right-wing politicians for showing any sign of bias
against any underprivileged community.

And yet she proudly labels herself an "Islamophobe". Fiercely anti-
racist, she sees no contradiction between defending Asians and
Africans in the UK - many of whom are practicing Muslims - and
rejecting their faith. She bases her views on the general
perception of Islam in the West as an aggressive and intolerant
religion that marginalizes women and religious minorities. If a
liberal, well-educated and highly articulate person like Ms Toynbee
can hold such views about Islam, it is easy to imagine how the
average westerner looks at it.

Just as most of us make little effort to understand the essence of
other faiths (or, indeed, our own), ordinary Europeans and
Americans gain their knowledge not through original texts but media
sound bites and images. And these are highly damaging to Muslims,
consisting as they mostly do of bearded fundamentalists carrying
Kalashnikovs; newspaper reports of fathers forcing their daughters
to marry men against their will; and women being forced to cover
themselves from head to foot. In brief, Muslims are seen as violent
and intolerant, and by implication, their faith is seen as the root
cause for this backwardness.

We may protest all we like, pointing to the tolerance and equality
preached by Islam, and to the great cultural flowering it
encouraged in its earlier days. The unpleasant fact is that because
of a relatively tiny minority of the billion or so Muslims around
the world, the entire ummah has been tarnished by the same brush.
Indeed, the Taliban have done more than any other group to ruin the
image of Islam. Their latest decision to make Hindus display yellow
marks smacks of the Nazi policy of forcing Jews to wear the Star of
David on their clothes. And their recent destruction of the great
Buddha statues in Bamiyan reminded us that their stone-age
practices have more to do with tribalism than Islam. But whatever
their motivation, they claim to act in the name of their faith, and
so in the eyes of the West, they represent one aspect of Islam,
never mind that most Muslims all over the world abhor and reject
their policies and behavior.

Against this backdrop of ill-informed condemnation of a faith and
its followers, it is easy to understand western apathy over the
institutionalized repression of (largely Muslim) Palestinians by
Israel and of Chechens by the Russian government. In the western
psyche, Muslims are generally lumped together and seen as
fundamentalists, and the next step to the terrorist label is a
short one. This composite image inspires both fear and loathing.

And yet secular Muslim countries like Turkey, Egypt, Tunisia and
Morocco continue to attract millions of tourists and billions of
dollars. The citizens of these countries are just as devout Muslims
as in the rest of the Islamic world, but are seen as moderates, and
not as threatening, totally alien figures. The point here is that
in a shrinking world, you cannot simultaneously try and attract
western capital and technology while cursing the West and despising
its values.

Mutual respect and tolerance only come through the acceptance of
other points of view and modes of behavior. Unfortunately, many
Muslims who have decided to make their homes in the West have
chosen to alienate themselves from the mainstream, living in self-
created ghettos of the mind. While they accept and enjoy the many
advantages of living in the West, they fiercely reject any moves to
integrate themselves into the society and cultural milieu they live
in. Many members of the younger generation of Muslims in the West
inhabit a twilight zone in between their parents' mental world and
the real world around them. A small minority of them have turned to
a particularly militant brand of fundamentalism that alienates them
further from society. These extremists reinforce the negative image
of their religion, except in their case, the perceived terrorists
are not some distant Taliban; they have infiltrated into the heart
of the western world.

So it should not surprise us when a terrorist outrage occurs in the
West, and Muslims are the first to be suspected. This stereotyping
is obviously harmful and hurtful to the vast majority of peaceful,
law-abiding Muslims who just want to get on with their lives. In a
sense, a small minority of extremists is holding the majority of
believers hostage.

There is a tendency to react to media stereotyping with anger and
defiance, justifying what this handful of zealots is doing by
blaming the West for not intervening when Muslims are clearly the
targets of oppression from Kashmir to Palestine to Bosnia. But this
is a chicken and egg situation: Americans and Europeans are largely
indifferent as they cannot empathize with people who seem so alien.
Public opinion is more sympathetic to nations westerners can
identify with more readily. In world affairs, there is no such
thing as objective truth, and expecting foreigners with little
interest in the legalities of international affairs to side with us
is expecting too much of human nature.

The fact is that like it or not, it is the West that currently
calls the shots in global finance, technology and diplomacy. Most
Muslim countries today are in various stages of underdevelopment,
and therefore require substantial financial and technical
assistance from the West. And here in lies the rub: can these same
countries (or a handful of their citizens) simultaneously afford to
alienate Europeans and Americans by adopting a confrontationist
posture?

Or to use General Aslam Beg's fatuous but memorable phrase, can the
Muslim world maintain an attitude of "strategic defiance"?

The Chinese, ever pragmatic, have courted overseas investments on a
huge scale, sending their GDP soaring, and have been trading
furiously with the West, accumulating enormous surpluses. They see
the strategic advantage of cooperating with the West to strengthen
their country, even though they have major ideological differences
with the countries they are doing business with. Many Muslim
thinkers and politicians, on the other hand, continue to fight
ancient battles. Incapable of logical thought and rational action,
they prefer to live in the past. In doing so, they are dragging the
rest of the Muslim world down with them.

If we are to develop and compete economically with the rest of the
world, we need to break out of the shackles of history we have
placed on ourselves.


SPORTS
20010523
-------------------------------------------------------------------
India agrees to send team to Pakistan
-------------------------------------------------------------------
Monitoring Desk

KARACHI, May 22: The Indian cricket board on Tuesday said the
national team will face no obstacles in touring Pakistan for next
year's Asia Cup and the Asian Test Championship.

Board of Control for Cricket in India (BCCI) president A.C. Muthiah
said the government's guidelines were clear and that the team will
not be stopped from competing in multination competitions.

"The sports ministry has clearly said that there will be no bar on
the Indian team participating in any multination tournament
wherever it is played," Muthiah said.

Muthiah was speaking before his departure later Tuesday for Lahore,
Pakistan, where the Asian Cricket Council will meet Thursday to
decide the schedule for the Asia Cup limited-overs tournament and
the Asian Test championship. Pakistan will host next year's Asia
Cup and also its Asian Test championship fixture against India.

The Asian Test championship's matches are spread all over the
subcontinent and played alternatively on a home and away basis.
India played host to Pakistan in Kolkata during the inaugural Asian
Test championship in 1999.

"I don't see any problem in our cricketers touring Pakistan for
these competitions," Muthiah said. "Even the ban on playing
Pakistan is for a bilateral series."

Government's clearance is mandatory in India for any international
sports event - at home or abroad. The government stopped its
cricket team from playing a Test series in Pakistan last year and
has denied permission for a five-match one-day series against
Pakistan in Toronto, Canada, for two successive years.

Sports Minister Uma Bharti last month said that the Indian cricket
team will not play Pakistan as a matter of national sentiment. "The
government is very, very firm not to have bilateral cricket matches
against Pakistan in the prevailing circumstances," Bharti said.
"Cricket has come to represent the national sentiment."

But she left the door open for India to play Pakistan in cricket,
if it were unavoidable, as a part of a multination event - as
opposed to head-to-head series

The government last month also banned its cricket team from playing
in three "non-regular" venues - Toronto, Canada, Singapore and
Sharjah, United Arab Emirates - for three years.

Muthiah said the government's guidelines also permit Pakistan's
cricket team from touring India for the ICC Cup - which India is
bidding to host next year.

The decision on the ICC Cup venue will be taken at the
International Cricket Council's annual meeting in London next
month. TWI to sponsor Indians

India's cricket chiefs earned a 49 percent hike for the sponsorship
of the national team under a new agreement signed with TWI, reports
AFP

TWI won a three-year deal with the Board of Control for Cricket in
India (BCCI) to sponsor both the team and a limited-overs domestic
tournament, officials said.

TWI has guaranteed sponsorship of $108,000 for each Test match and
$87,000 for each One-day International the Indian team plays over
the next three years, BCCI president A.C. Muthiah said.

It will also pay $218,000 a year to the BCCI to conduct a limited-
overs domestic tournament. Last sponsors, the Indian Tobacco
Company, paid $55,000 for each Test match and $45,000 for a One-day
International.

The new contract will come into force in July when the Indian team
tours Sri Lanka for three Tests and a limited-overs triangular
series also featuring New Zealand, Muthiah said.

The BCCI is also working on a graded system of payment for
cricketers based on seniority, Muthiah added.

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20010521
-------------------------------------------------------------------
Waqar's men disgraced at Lord's
-------------------------------------------------------------------

LONDON, May 20: England routed Pakistan by an innings and nine runs
in the first Test on Sunday with an inspired display of pace
bowling from Darren Gough and Andrew Caddick. Sixteen Pakistan
wickets fell on a dramatic fourth day of the rain-affected match as
the touring team, forced to follow-on 188 behind after being bowled
out for 203, were skittled for 179 in their second innings,
sparking a joyful pitch invasion by the Lord's crowd.

Man-of-the-Match Caddick, finding swing and seam movement
throughout, ended with match figures of eight for 106 while Gough
had eight for 101, England effectively wrapping up the game in
three days after the first day was rained off.

In the process, Gough became only the eighth Englishman to pass 200
Test wickets. He stole the limelight in the morning by enforcing
the follow-on with three wickets in four balls as Waqar Younis's
side, resuming on 115 for four in reply to England's first innings
of 391, fell 39 runs short of their target.

The honour of the final wicket of the match fell to seamer Dominic
Cork, who punched the air as Waqar was caught behind off a lifter.

England, seeking their fifth series success in a row, sealed their
victory without captain Nasser Hussain, who was ruled out of the
rest of the rubber on Saturday after breaking his right thumb while
batting. The second and final Test starts at Old Trafford on May
31.

Few had expected the chance of a result after the first day was
washed out by rain. Pakistan, however, who had won the toss but
failed to exploit the seamer-friendly conditions, proceeded to lose
their last six first-innings wickets for 88 on Sunday morning. The
only real resistance had come from Younis Khan's 58 before Gough's
dramatic intervention.

The Yorkshireman claimed his 200th Test victim when wicket-keeper
Rashid Latif was caught behind down the leg side with his final
delivery before lunch.

Waqar survived Gough's next delivery but then carved a sharp catch
to Graham Thorpe at third slip. Number 11 Shoaib Akhtar followed
immediately, bowled for a golden duck.

The Yorkshire pace bowler, who finished with his first five-wicket
haul at Lord's by taking five for 61, flung both his arms in the
air before being mobbed by his team mates.

His first ball of the second innings - a hat trick delivery -
rapped Saeed Anwar on the pads on the way down the leg side before
Caddick, who took four for 52 in the first innings, dealt a double
blow.

Saleem Elahi completed a pair as Thorpe went full-length at third
slip to take a stunning one-handed catch, one of several pieces of
fine fielding by the home side.

The Caddick-Thorpe combination then took care of Anwar for eight
before Cork got in on the act. He removed Inzamam for 20, wicket-
keeper Stewart taking the ball one handed down the leg side as the
batsman stared back at umpire Peter Willey in disbelief over the
decision.

Yousuf Youhana then chipped a Gough delivery straight in to Michael
Vaughan's hands at short mid-wicket to herald the tea interval, and
soon afterwards Younis was adjudged leg before, off an inside edge
by Willey, to Cork to make it 87 for five.

Abdur Razzaq provided the only resistance this time, with a three-
hour 53, including nine fours, before he was caught at first slip
off Caddick.

Fellow all-rounder Azhar Mahmood was next to go, caught behind off
Caddick from a ball that left him, having had a number of escapes
while scoring 24.

Latif and Waqar resisted for a time but England were not to be
denied their win with a day to spare.

England's close catching was exemplary throughout, with wicket-
keeper Stewart holding seven catches and the slips taking another
eight, four of them by Thorpe.

Stewart was in charge as England surged to success, skipper Nasser
Hussain having been ruled out of the rest of the two-Test series on
Saturday after breaking his right thumb while batting. -Reuters

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20010525
-------------------------------------------------------------------
Waqar claims hat trick to rout Leicester
-------------------------------------------------------------------

LEICESTER (England), May 24: Pakistan captain Waqar Younis took a
hat trick as the tourists bowled out Leicester for 96 on the first
day of their four-day tour match here Wednesday.

Waqar finished with five for 23 while long time pace partner Wasim
Akram took four for 19 as Pakistan warmed up for next week's Second
Test against England at Old Trafford.

At the close Pakistan were 201-3, Faisal Iqbal, the nephew of Javed
Miandad, 81 not out and Yousuf Youhana 38 not out, a lead of 105.
Faisal's fifty came off 120 balls.

Left-armer Wasim ripped through Leicester's top order, the 34-year-
old taking the first four wickets. Then Waqar, bowling himself as
first-change, struck in his second over of the day, Neil Burns,
former England quick Phil DeFreitas and Omari Banks all out for
first-ball noughts.

Burns was lbw, DeFreitas, in his first game of the season, was
yorked and debutant Banks' off-stump was struck by a ball that
moved away from the right-hander.

Only Leicestershire's left-handed opener Iain Sutcliffe managed
meaningful resistance with 55 from 97 balls, including six fours,
before he was last out, Shoaib Akhtar catching a miscued pull to
give Abdur Razzaq his only wicket of the innings.

The only downside for the tourists to the dominanace of their pace
attack was that neither off-spinner Saqlain Mushtaq or leg-spinner
Mushtaq Ahmed, both of whom were omitted from the side that lost
the first Test by an innings and nine runs at Lord's last week, had
much of a chance to get in on the action. -Reuters

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