------------------------------------------------------------------- DAWN WIRE SERVICE ------------------------------------------------------------------- Week Ending : 19 May 2001 Issue : 07/20 -------------------------------------------------------------------
Contents | National News | Business & Economy | Editorials & Features | Sports
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CONTENTS =================================================================== NATIONAL NEWS + China may help build Gwadar port project + Pakistan-China ties will continue to grow: Tarar + Pakistan, India test-bed for N-deterrence theory + Lifting of economic sanctions advocated + 20% rise in govt employees salaries + Usmani takes over as Deputy Chief of Army Staff + Parliamentary setup to stay: Musharraf + US may play ties card on India: Just solution to Kashmir dispute + CE okays canals, dams construction + Pakistan not called rogue state: US + Govt decides to withdraw tax exemption: National saving schemes + Provinces agree on refilling reservoirs + Sindh, Punjab water demand fulfilled + Budget on June 16 + Asif's separate trial in SGS case likely --------------------------------- BUSINESS & ECONOMY + Government may abolish withholding tax: Payments and transactions + Shaukat Aziz hints at allowing import of Indian sugar + WAPDA against Rs 700 million waiver to armed forces + Local companies can make foreign investment + AGP audit, account offices to be separated + Relaxation in monetary policy not on cards + SECP chief greeted by demonstrating stock brokers + IMF team meets money changers + Brokers begin confessing faults --------------------------------------- E D I T O R I A L S & F E A T U R E S --------------------------------------- + The Kidney Centre - Nationalized! Ardeshir Cowasjee + Canker in an ideal relationship Ayaz Amir + Welcome to the dark side Irfan Husain ----------- SPORTS + Rains wash way opening day of Lord's Test + Pakistan seek revenge against England + Overrated Shoaib fails to convince team coach
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NATIONAL NEWS
20010518
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China may help build Gwadar port project
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Reporter
ISLAMABAD, May 17: Pakistan has asked China to help build the
Gwadar Deep Sea Port which could be to export its industrial output
from western China to rest of the world. An official of the
ministry of communications, associated with the negotiations, told
Dawn that the Chinese response regarding Gwadar Deep Sea Port was
expected next month, at the time of the Chinese communications
minister's visit to evaluate the Gwadar Deep Sea and Coastal
Highway Project.
However, the Chinese have categorically ruled out funding the
entire Gwadar port project worth US$1.16 billion, are prepared to
give serious thought to it due to its geo-strategic importance.
To a question the official said that it was true that the US was
not in favour of the port, but the Pakistan's foreign minister's
visit to the US just before the Chinese premier's visit was not
linked to the construction of Gwadar port.
During the four-day visit, the Chinese premier was given a thorough
briefing on Gwadar port project; 653 kilometres long Coastal
Highway from Karachi to Gwadar; Thar Coal development plans, and
Kachi Canal.
Pakistani authorities have gathered indications, though not clear
enough, that China might fund the Phase-I of Gwadar port (located
at the tip of the strait of Hormuz/Persian Gulf) with the estimated
cost of US$248 million.
The policy makers think that the Gwadar port has the potential to
become a regional hub, an alternative to Gulf ports and also a
vital link to Central Asian Republics.
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20010513
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Pakistan-China ties will continue to grow: Tarar
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ISLAMABAD, May 12: President Rafiq Tarar on Saturday described the
Sino-Pakistan friendship as "a model of inter-state relations", and
expressed his confidence that " we will continue to co-operate
closely during the new millennium.
"We seek to build an international order which is just and
equitable," he said while speaking at a banquet he hosted in the
honour of visiting Chinese Prime Minister Zhu Rongji.
Mr Tarar said: "Our friendship and co-operation does not merely
benefit our two peoples, but it is also in the interest of peace,
security, stability and progress of the entire region. "It is a
model of inter-state relations. Our two countries adhere to the
United Nations Charter and to the five principles of peaceful co-
existence."
Mr Tarar said: "We seek to build an international order which is
just and equitable. We are opposed to regional and international
hegemony. We work closely together in the United Nations and other
international fora. " We face many common political and economic
challenges in the new era. I am confident that we will continue to
co-operate closely during the new millennium, as we have done in
the last fifty years," he said.
The Sino-Pakistan friendship, Mr Tarar said, was time-tested and
deep-rooted. He said Pakistan greatly appreciated the important role
China had played in the development of Pakistan's economic
infrastructure. In this context, he referred to major projects
like the Karakoram Highway, Heavy Mechanical Complex and Chashma
Nuclear Power Plant, etc, and said these were shining examples of
Pakistan-China economic co-operation.
Mr Tarar said: " The chinese prime minister's visit to Pakistan is
a landmark event. It commemorates the 50th anniversary of the
establishment of diplomatic relations between our two countries. It
is also the first such high-level visit between Pakistan and China
in the new century."
"As we celebrate 50 years of our partnership, we cannot forget the
services and sacrifices of hundreds of Chinese workers and
engineers who worked shoulder to shoulder with their Pakistani
brethren in the construction of the Karakoram Highway."-APP
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20010517
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Pakistan, India test-bed for N-deterrence theory
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LONDON, May 16: Troubled relations between Pakistan and India are a
"rapidly evolving test-bed for nuclear deterrence theory", the
International Institute for Strategic Studies (IISS) said in its
annual report on Wednesday.
The balance of forces in the Subcontinent is opaque, "as expected
for nuclear-weapons states early in the development and acquisition
cycles", the London-based think tank said
IISS said that by the end of 1999, non-governmental assessment of
fissile material stockpiles in South Asia credited India with the
means to make 65 nuclear weapons and Pakistan to make 39.
"Word has leaked out, however, that India used reactor-grade
plutonium for one of its detonations, suggesting that its nuclear
potential - as well as that of any other similarly inclined state
with a civilian nuclear power industry - is greater than
anticipated."
The relative balance of capabilities was clouded by reports in June
last year asserting Pakistani advantages in missiles, nuclear
weaponization for missiles and command-and-control arrangements,
IISS said.
"While Pakistani officials assert that they do not intend to
compete with India in nuclear weapons, they have certainly invested
heavily in doing so," it said. Although India's nuclear
infrastructure is far greater, Pakistan's military programmes,
especially the nuclear and missile ones, have first call on
available resources, IISS said.
India's more complex political and military circumstances pose a
more demanding problem: New Delhi will establish requirements
against Beijing's strategic modernization programmes as well as
against Islamabad's.
The institute went on to say that the search for stability,
reassurance and nuclear risk-reduction between Pakistan and India
was stymied by the absence of official talks last year.
Nuclear risk-reduction and stability talks between India and China
were frozen last year for different reasons, IISS noted. "Beijing
refuses to compromise on the subject of India's nuclear tests and
is unwilling to talk to India about them in any way that might
suggest equality."
The central diplomatic developments during last year were former US
President Bill Clinton's trip to the region in March and visits to
New York by Chief Executive Gen Pervez Musharraf and Indian Prime
Minister Atal Behari Vajpayee.
"The first Clinton term had followed a 'Pakistan first' approach
that alienated India without changing Pakistan's policies. "At the
outset of the second term, Clinton shifted to an 'India first'
posture, which was chilled by New Delhi's surprise tests of nuclear
devices."
The freeze in Indo-US relations following the 1998 tests was thawed
by an extended dialogue, the IISS said, and went on to note that at
least publicly President George W. Bush appears inclined to follow
Clinton's lead in South Asia.
"The new administration did, however, tone down its anti-
proliferation position with respect to both countries, courting
India diplomatically and focusing its harshest criticism on
Pakistan for its support of Islamic extremists in Afghanistan and
Kashmir."
The Bush administration may capitalize on the warming of US-Indian
relations by lifting economic sanctions imposed in 1998, the report
said.
On the domestic front, India has been relatively stable, though
rocked by a devastating earthquake in February, it said. A
corruption scandal led to high-level resignations, but India was
unlikely to face serious disruptions to its democratic stability in
the medium term, IISS said.
Pakistan, is by far the more "precarious" state, the report said,
observing that Gen Musharraf has not been an improvement over Nawaz
Sharif. -AFP
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20010519
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Lifting of economic sanctions advocated
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By Tahir Mirza
WASHINGTON, May 18: Describing Pakistan and India as the "two
anchors of South Asia", US Assistant Secretary of State-designate
Christina B. Rocca on Thursday expressed her belief that sanctions
against the two countries had outlived their utility and comprised
an obstacle to America's engagement with the subcontinent.
She said a general review of the sanctions was in progress as well
as of policy on the subcontinent as a whole, and it would be a
mistake on the part of the US, India and Pakistan to "allow
ourselves to be trapped in the mistakes of the past". The time had
come, she stressed, to move forward, individually and together.
Ms Rocca will be the key official in the State Department dealing
on a day-to-day basis with the South Asia policy.
Her remarks came during her confirmation hearing by the Senate
foreign relations committee, which was presided over by Senator Sam
Brownback.
It is almost certain after Ms Rocca's remarks that US economic
sanctions with regard to the subcontinent will soon be lifted, but
Pakistan also has democracy sanctions against it which are unlikely
to be withdrawn till the military regime gives way to an elected
government.
Neither in Ms Rocca's written statement nor during the question-
answer session was Kashmir ever mentioned, nor Osama bin Laden. But
she did say the Taliban continued to pose a grave threat to the
people of Afghanistan, to their neighbours and to the international
community. Afghanistan, she stated, was an "enormous challenge"
because of its emergence as the "world locus of transnational
terrorism".
In reply to questions from the committee whether the Bush
administration would follow the Clinton administration's policy of
seeking Indian and Pakistan adherence to the CTBT, Ms Rocca simply
said the US welcomed continuation of a nuclear test moratorium and
continued to emphasize restraint on both countries.
In her prepared statement, which was fairly non-committal and
couched in general terms, Ms Rocca described America's friendship
with Pakistan as of "long standing" that must be sustained and
enhanced.
"Pakistan", she said, "is an important regional power and an
important Islamic power. For these reasons and many more, the Bush
administration is committed to working through difficult economic,
political and social challenges now facing Pakistan. Where we can
cooperate, in areas such (as) counter-narcotics, we must continue.
Where we do not cooperate optimally, for example on Afghanistan, we
must work harder to show Pakistan the shared threat we face from
the regime in Kabul."
She also underlined the importance of aid to Pakistan's education
sector.
On India, Ms Rocca said the Bush administration would continue the
Clinton policy of substantive bilateral engagement. "The past few
years have seen the beginning of a transformation in our
relationship with the world's largest democracy. Now is the time to
complete that transformation," she said. "India's economic
potential, following a decade of market reform, is immense. We are
India's largest trading partner, but bilateral trade remains far
below where it should be."
She said she would work to devote time to remedying this situation.
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20010518
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20% rise in govt employees salaries
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Ihtashamul Haque
ISLAMABAD, May 17: A high-level meeting here on Thursday approved
an across-the-board 20 per cent increase in the salaries of
federal, provincial and armed forces employees to help offset the
impact of price hike in the country.
According to informed sources, the meeting presided over by the
Chief Executive Gen Pervez Musharraf discussed the recommendations
of the Pay and Pension Committee and approved 20 per cent increase
in the salaries of federal and provincial governments' employees as
well as the personnel of the armed force. The relief is to take
effect from the next financial year.
The meeting, which was attended by finance minister Shaukat Aziz,
secretary Moeen Afzal, chief of general staff Lt-Gen Mohammad
Yousef, chief of staff of the chief executive Lt-Gen Ghulam
Mohammad, and chairman CBR Riaz Hussain Naqvi, discussed and
approved a comprehensive compensation package for the civil and
military employees of the government.
The sources said that a decision had also been taken to merge
various benefits of the senior government employees. There will be
an amortisation to help the government employees get various
benefits in their salaries on continuous basis. This will
considerably take into account the aspect of inflation.
The sources said the government would not be offering housing to
its employees. They would be offered a substantial amount in cash,
instead. But some senior employees would be offered cars, and not
cash.
Various options were discussed in the light of the recommendations
of the Pay and Pension Committee to offer relief to the government
employees. Originally, the committee had proposed to offer 30pc
increase in the salaries. But, this was not accepted in view of the
poor state of the public purse.
The chief executive told the meeting that instead of offering any
increase in one go there must be some system that should ensure
continuity in pay increases in keeping with the rate of inflation
as well as financial position of the government.
"IMF has not opposed any increase in the salaries of the government
employees," said a participant of the meeting. When contacted, he
told this correspondent that IMF was expressing its concern over
budget deficit.
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20010518
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Usmani takes over as Deputy Chief of Army Staff
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Reporter
ISLAMABAD, May 17: Lt-Gen Muzaffar Hussain Usmani took charge of
Deputy Chief of Army Staff and called on the Chief Executive Gen
Pervez Musharraf here on Thursday, defence sources said.
Before meeting the chief executive, Lt-Gen Usmani also held
discussion with Chief of General Staff Lt-Gen Muhammad Yousaf and
Principal Staff Officers at General Headquarters.
Lt-Gen Tauqir Zia assumed charge of Inspector General of Training
and Evaluation at GHQ, the post where he had been transferred last
week from the post of Corps Commander Mangla. The post fell vacant
on the retirement of Lt-Gen Tahir Ali Qureshi.
Lt-Gen Ghulam Mustafa, who has recently been promoted to the rank
of Lieutenant General, replaced Lt-Gen Zia at Mangla Corps.
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20010517
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Parliamentary setup to stay: Musharraf
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ISLAMABAD, May 16: The Chief Executive, Gen Pervez Musharraf, said
on Wednesday that parliamentary system of government would remain
in tact. "The parliamentary system would remain in tact," he told
BBC Radio's Urdu Service in an interview.
In reply to a question, the CE said there was no "magic wand,"
rather there could be many formats. He said his government "can
introduce constitutional changes while remaining within the ambit
of the mandate given to it by the Supreme Court."
These changes would be brought in in such a way that the framework
of the constitution could stay maintained, said Gen Musharraf. He
sated that the government was laying the foundation of a democracy
which would rise from the grass roots. "Our local government plan
is a step in this direction."
In the past, the CE pointed out, democracy was not allowed to
flourish in the true sense. The elected governments came to power
but there "was no real democracy in the country".
Under the present plan and strategy, "the government wants
political structuring to start from the grass roots". He said
democracy which would come into being through this process would be
an asset for the country. When this democracy would function then
"I fully believe that a true leadership will emerge," he said. "So
I have total faith in the future of democracy in Pakistan."
In reply to a question about the future role of the army in
politics, he said the army would be relieved of its responsibility
in future. "Army does not want to take part in politics, neither
should it take part in politics."
He said the protection of the nation's future would be ensured with
the participation of the armed forces. The army would fulfil the
basic responsibility assigned to it, he added.
He further said there were circumstances that had forced the army
to take part in politics. "Army comes when the politicians fail."
He said: "We are taking steps to ensure that politicians do not
fail. We are bringing the kind of democracy so that the politicians
should not fail".
Every political issue had to be resolved through constitutional
means, he said, adding that one had to look for the "super
structure" in which the power did not concentrate in a single
entity.
In reply to another question about the army, the CE said there was
complete unity and solidarity in its ranks... which was manifested
in October of 1999.-APP
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20010517
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US may play ties card on India: Just solution to Kashmir dispute
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Tahir Mirza
WASHINGTON, May 16: The United States on Tuesday gave a clear
indication that it might be willing to use its new relationship
with India to encourage a "peaceful and just" solution to the
Kashmir problem, and expressed concern at the "nuclear genie" that
has been let out of the bottle in South Asia.
In his first public reference to the Kashmir question since he took
over as secretary of state in the Bush administration, Gen Colin
Powell said there was a role the US could play in helping to
resolve it, and added: "I think the progress we have seen over the
last several years in relations between the US and India,
especially, gives us a new entree, a new opportunity to encourage
the sides to find a peaceful and just solution to the problem of
Kashmir."
Pakistan has been exerting itself to persuade the US to take a more
active interest in problem-solving in S. Asia, a proposition that
is opposed by India.
Secretary Powell's statement, made during the hearing before a
Senate appropriations committee, is bound to be welcomed in
Islamabad and provide an opening for Foreign Minister Abdul Sattar
when he meets Gen Powell in Washington on June 16. Indian Foreign
Minister Jaswant Singh met the secretary of state here last month.
But Gen Powell, who was replying to a question from Senator Tim
Johnson on what role the US could play in relation to a settlement
of Kashmir, especially in view of the fact that the problem was a
potential source of nuclear conflict, also said it was a "very
difficult issue". However, given the fact that Washington's focus
was on both Pakistan and India, the US could be helpful to both of
them.
The secretary repeatedly underlined the new US relationship with
India. He said for most of his military career, "India was just
over there. I mean it was sort of connected to the Soviet Union and
we didn't pay a lot of attention to it. Our focus was really on
Pakistan. Well, now our focus is on both of them, and I think we
can be helpful to both of them, and we really have to make sure
that this nuclear genie doesn't get any further out of the bottle
than it already is out of the bottle. On a regular basis, we
consult with them (Pakistan and India). We make sure they
understand the seriousness with which we view the potential for
something getting out of control in the region, and I do think we
have a helpful role to play because of the new relationship we have
with India."
Senator Johnson had referred to the continuing conflict between
India and Pakistan, particularly as relating to Kashmir, and said
this was destabilising all of South Asia and perhaps the world.
Obviously, the senator said, there was no possibility of imposing a
solution on sovereign nations, but nevertheless "I would hope that
there would be increasingly constructive role that the United
States might play in this particular conflict".
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20010516
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CE okays canals, dams construction
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ISLAMABAD, May 15: The chief executive, Gen Pervez Musharraf, has
approved, in principle, the construction of Gomal dam, the Katchi
canal, Thar-Rainee canal and the Mirani dam to augment water
resources.
He has directed the finance ministry to raise funds so that Wapda
can undertake these projects beginning next financial year.
Official sources told APP on Tuesday that the CE had directed Wapda
to develop small hydropower projects on small falls and barrages at
different sites to meet water requirements in the country.
Meanwhile, Wapda has identified 591 such sites that can generate
1000-1500 MW of electricity, besides providing irrigation water.
Wapda would soon start feasibility studies of projects like the
Thal reservoir, Sehwan dam, Hingol dam, three flood-fed canals in
Punjab, the Jinnah hydropower project, Malakand hydropower project,
Katchi canal, Mithan Kot barrage and other such projects in
consultation with provincial governments.
Wapda would also set up four hydel projects in the NWFP at a cost
of $1.5 billion having a capacity of 1,000MW. The water and power
ministry has completed feasibility report of these projects.
The proposed hydel projects would be Allai Khwar, Khan Khwar, Daral
Khwar and Battal Khwar. Wapda would start work by the end of this
year and complete all the projects till 2006.
New small dams would be constructed in all the provinces keeping in
view the expected shortage of reservoirs in the time to come.
The ministry has constituted a team of experts to expedite the
engineering and feasibility study of Bhasha dam in the NWFP, Thal
development project and associates schemes in Punjab, Karachi canal
scheme in Baluchistan, and Sehwan barrage complex and Rainee canal
project in Sindh.-APP
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20010515
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Pakistan not called rogue state: US
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Correspondent
WASHINGTON, May 14: The United States State Department on Monday
clarified that Deputy Secretary of State, Richard Armitage, called
Pakistan a "rogue state," when visiting New Delhi.
In a statement issued here following a protest by Pakistan
government conveyed by Ambassador of Pakistan Maleeha Lodhi, the
spokesman said that in response to a question at a press conference
Mr Armitage said the US considers four countries - Iran, Iraq,
Libya and North Korea - rogue states. He did not call Pakistan a
"rogue state", he reiterated.
The spokesman said that during the press conference Armitage was
asked several questions about the US's perception of the global and
regional security environment. He did say that he was concerned by
proliferation of nuclear weapons by Pakistan.
Asked whether Deputy Secretary, Armitage conveyed the United States
concern about India's role in proliferation of nuclear weapons in
the region, particularly because the race began after it exploded
the bomb, the spokesman said "of course that is one of the concerns
we conveyed during our meeting with the Indian officials."
Pakistan embassy source told Dawn that in the meeting with acting
Assistant Secretary of State for South Asia, Alan Eastham,
Ambassador Lodhi made a "Demarche" to the United States government.
"We conveyed our deep concern, and we rejected the implication that
Pakistan was a "rogue state." Pakistan was assured that Mr Armitage
did not make such comments," the source said.
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20010515
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Govt decides to withdraw tax exemption: National saving schemes
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Ihtashamul Haque
ISLAMABAD, May 14: The government has decided to withdraw tax
exemption from all the National Saving Schemes (NSS) and make their
interest rates market-based from July 1, 2001.
Official sources said here on Monday that the decision has been
taken to overhaul the NSS with a view to removing tax exempt status
of all NSS instruments from the next financial year.
All subsidies under the existing export finance scheme (EFS) will
also be eliminated by mid 2001 for which, the sources said, a
formal announcement will be made by the finance minister in his
budget speech likely to be made on June 15 or 16.
The special audit of the Central Directorate of National Savings
(CDNS) was completed in late 2000, and a follow-up actions on
resolved issues and accounting problems as well as the audit of
1999-2000 accounts have been initiated. A new market-based medium
and long-term instrument, the Pakistan Investment Bonds (PIBs) was
launched in December 2000 and interest rates on new Defence Savings
Certificates were formally linked to PIB yields.
The sources said the authorities also intended to accelerate their
drive to strengthen the financial soundness of the banking system,
especially the major nationalized commercial banks, and promote
competition among banks. In addition to ongoing operations, which
include the closures of non-profitable branches in the rural sector
and efforts to recover non-performing loans, the government is
discussing World Bank support plans involving major labour shedding
of the nationalized commercial banks and the liquidation or merger
of a number of development financial institutions (DFIs).
However, a substantial recapitalization of some of these
nationalized banks will be needed before their privatization.
In the financial sector, although important progress has been made
with regard to national savings and export finance schemes, much
remains to be done to strengthen the financial soundness and
efficiency of the banking system, especially the major nationalised
banks, officials said.
The World Bank, the IMF and the Asian Development Bank (ADB) had
been assured that the government remained committed to moving
towards a market-based exchange rate system to achieve the external
sector objectives. To this end, the State Bank will stop providing
foreign exchange to the interbank markets to finance petroleum
imports, limit its interventions to smoothening out the temporary
effects of bulk transactions in the thin interbank market, and for
the 2001 as a whole, the central bank will not be a net provider of
foreign exchange to the interbank market after taking into account
government debt service payments effected through commercial banks.
The donors believed that a market-based exchange rate will require
the deepening of the interbank foreign exchange markets and
cessation of SBP purchases in the kerb market. However, they were
of the view that given the low level of reserves, these would need
to be implemented gradually and cautiously.
As a first step the SBP's practice of dealing for same day value in
foreign exchange has been changed to two day value for spot
dealing, in line with best international practices. Nostro limits
on bank's balances held abroad on account of trading activities
will be relaxed around mid 2001, the donors were assured.
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20010518
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Provinces agree on refilling reservoirs
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Faraz Hashmi
ISLAMABAD, May 17: The provinces on Thursday gave a go-ahead signal
to Irsa to replenish all the country's water reservoirs. "Without
indulging in controversy or raising objections, the provinces
agreed on storing water in all the reservoirs," secretary Irsa
Sohail Ali Khan told reporters after the authority's technical
committee meeting.
The country has a little over one million acre feet of water stored
in the three major reservoirs - Tarbela, Mangla and Chashma - which
is half of the average of the last ten years.
The average of storage of last ten years during the month of May
was 2.3 MAF, whereas this year the country has only 1.764 MAF of
water stored in the reservoirs meeting irrigation requirements of
all the four provinces.
The data of storage released by Irsa showed that 0.366 MAF was
available at Tarbela, 0.105 MAF at Chashma and 0.763 MAF at Mangla.
With the rising water level in rivers, the provinces have also
revised their "indent" (demand). Sindh has increased its indent for
the next five days to 100,000 cusecs per day.
Chief engineer Irsa Amanullah Khan said they would meet Sindh's
demand to a "reasonable" extent. On a specific question whether 100
per cent demand of the provincial governments would be fulfilled as
the water was a "little" in excess, he said "only reasonable demand
would be met."
He said Sindh indent was 60,000 cusecs a day which they revised to
80,000 cusecs a day and their latest indent for five days from May
16 to May 20 was 100,000 cusecs a day. Punjab, he said, was getting
106,800 cusecs a day including 42,000 cusecs from the Indus arms.
The rest of around 60,000 cusecs was coming from Jehlum and Chenab.
In addition to 106,800 cusecs, Punjab was also storing 25,000
cusecs in Mangla which Irsa officials said the province was storing
from its own share. The water stored in Mangla would be accounted
for when it would be utilised, Mr Khan said.
The technical committee of Irsa which was attended by
representatives of all the four provinces and Wapda also reviewed
the water availability situation during the Kharif season. "The
provinces expressed satisfaction over the amount of water being
supplied to them," he said.
On a question about additional water supplied to Sindh from
Punjab's share in the month of April on the orders of the Chief
Executive, he said, "it was a gift of Punjab to Sindh".
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20010515
-------------------------------------------------------------------
Sindh, Punjab water demand fulfilled
-------------------------------------------------------------------
Faraz Hashmi
ISLAMABAD, May 14: Sindh and Punjab will start receiving water as
per their demand from Tuesday as the flow in all the rivers has
reached a total of 197,000 cusecs.
"With an increase in the flow due to the sharp rise in temperatures
the storage at Tarbela and Mangla are also being replenished," an
Irsa official told Dawn.
>From May 15 Sindh will be supplied 60,000 cusecs and, Punjab will
get 27,000 cusecs from Indus arm, 25,000 from Mangla, and 38,750
cusecs from Marala.
A technical committee of Indus River System Authority (Irsa) in its
last meeting had decided to maintain the level of Mangla at 1,106
feet, until Sindh's objection on storage of water in Mangla is
disposed of.
With the improvement in water availability, water is being stored
in Mangla and its level has already gone up by three feet in 24
hours.
A total of 42,100 cusecs was flowing in Mangla dam from Jehlum
River on May 14. Out of the total inflow 17,000 cusecs was being
retained and the rest was being released for irrigation in Punjab.
In the River Indus upstream Tarbela a flow of 81,700 cusecs was
recorded out of which 50,000 cusecs was being released. The water
level at Tarbela reached at 1380.1 feet about 10 feet above the
dead level.
The level in Kabul River had also improved and a flow of 35,300
cusecs was recorded on May 14. Chenab River has also come alive and
a flow of 38,750 cusecs was recorded at Marala.
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20010516
-------------------------------------------------------------------
Budget on June 16
-------------------------------------------------------------------
Reporter
ISLAMABAD, May 15: Finance minister Shaukat Aziz has said that
budget for 2001-2002 will be announced on June 16.
Talking to reporters here, Aziz reiterated that the new budget will
be business-friendly, investment-friendly and growth-oriented. "And
let us wait for all the details on 16 of next month", he said.
Nevertheless, sources said, the officials of the ministry of
finance and the Central Board of Revenue had been directed by the
military authorities to avoid proposing new taxation measures. They
were told to broaden the tax base, especially by getting hold of
the 'underfilers' as was recommended by both the World Bank and the
IMF.
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20010517
-------------------------------------------------------------------
Asif's separate trial in SGS case likely
-------------------------------------------------------------------
By Our Staff Reporter
ISLAMABAD, May 16: The government has decided to separate the case
of Benazir Bhutto from that of Asif Zardari in the SGS case, Dawn
learnt from official sources.
The SGS case which was remanded for retrial by the Supreme Court on
April 6, would be taken up in the accountability court No 2 of
Rawalpindi on May 25.
"The government has decided to make a request to the court to
separate the trail of Benazir Bhutto as she was outside the
jurisdiction of the court," an official source said.
If the request is allowed, the prosecution would concentrate on
proving that the pre-shipment inspection contract to the Swiss
company, SGS, was awarded at the behest of Mr Zardari for
consideration of 6 per cent of the commission of the total
receipts.
Under the NAB law, no judgement can be passed against a person who
is outside the jurisdiction of the court. Ms Bhutto left the
country a few days before the Ehtesab Bench judgement came on April
15, 1999.
Ms Bhutto, settled in Dubai and England, is not expected to come
back. Sources said that the government wanted to separate her case
so that it would remain pending and whenever she returns, the
option of reopening it would be available. Experts, associated with
the case, are of the view that little evidence was available
against Ms Bhutto in the SGS case.
The only evidence available was that she had presided over a
meeting at which the pre-shipment inspection contract to the SGS
had been awarded and that she had allegedly purchased a necklace
worth 117,000 pounds for which payments were made by Boomer
Finance, an off-shore company allegedly owned by Mr Zardari.
Ms Bhutto had accepted that she had presided over the meeting, but
disputed the motive attributed to her for approval of the contract.
She did not accept that she owned the necklace. She is in
possession of an affidavit issued by Chatilla Jewellers, London,
that nobody by the name of Benazir Bhutto had purchased the
necklace.
===================================================================
B U S I N E S S & E C O N O M Y
===================================================================
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20010518
-------------------------------------------------------------------
Government may abolish withholding tax: Payments and transactions
-------------------------------------------------------------------
Reporter
ISLAMABAD, May 17: The Federal Government is considering to abolish
withholding tax on sales through public auction, rent of house
property, gas bills of commercial and industrial consumers and
commission/discount of petrol pump operators from the next
financial year.
Official sources in the Central Board of Revenue (CBR) told Dawn on
Thursday that the proposal came from a nine-member committee,
formed to recommend amendments in the 1979 Income Tax Ordinance. It
termed the revenue generated through it as meagre.
The officials concerned in the CBR were of the opinion that they
have partially shown their unwillingness on the abolition of
withholding tax on these payments and transactions, however, they
admitted that the revenue generated through it is very small as
compared to its total cost. Now, the finance ministry will take the
final decision in this regard, they said.
They said that the tax collected through commercial and industrial
gas connections earned very small revenue to the government as
compared to the expenditure involved on its collection.
Under Section 50 (G) of the Income Tax Ordinance 1979, the tax is
levied at a rate of Rs 150 to Rs 3000 on commercial and industrial
gas connections. The net revenue yield through it is Rs 0.017
billion. The federal and provincial government officers, other
government agencies, local authorities and embassies are already
enjoying the tax exemption on it. Therefore, the committee
recommended to the government to abolish the withholding tax on it.
Sources said that the net yield from the sale of petroleum products
to petrol pump operators on the value of their commission or
discount is Rs 0.237 billion. The withholding tax at 10 per cent of
the commission is collected from the petrol pumps and the committee
proposed that since the revenue yield is very small and the number
of recipients of connection is too large, therefore, it should also
be abolished.
The committee also recommended to abolish the 5 per cent
withholding tax on sale of property as net yield from this tax is
0.171 billion, which is very nominal as the equator has already
been abolished by the former government.
Under 50 (7B) of the Income Tax Ordinance 1979, withholding tax at
a rate of 7.5 per cent is levied on payment (including advance) of
rent of house property (including rent of furniture, fixture and
services), which the committee proposed is adjustable and need to
be abolished. The sources said that revenue generated through this
tax is Rs 0.204 billion, which, they said, is too less and tax can
be easily collected on global income basis.
The withholding taxes were first introduced in late sixties, since
then there has been growing emphasis on expanding the withholding
tax net, a major source of income tax collection. In 1979, there
were only seven kinds of payments/transactions subject to
withholding taxes, which increased up to 19 in 1994-95 and 25 in
1999-2000 (including an on bonus shares, which remain dormant).
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20010516
-------------------------------------------------------------------
Shaukat Aziz hints at allowing import of Indian sugar
-------------------------------------------------------------------
Parvaiz Ishfaq Rana
KARACHI, May 15: The Federal Finance Minister Shaukat Aziz has
hinted at importing sugar "even from India" if the domestic market
situation warrants such a move.
"The government's priority is to keep sugar prices under control,
for which we can provide foreign exchange and can even consider
reduction in import duty", the minister informed Raees Ashraf Tar
Mohammad, Chairman, Pakistan Commodity Importers Association, in a
telephonic conversation from Islamabad on Tuesday.
Raees has been in touch with top government functionaries in
Islamabad for last many days on supply and prices of sugar in
domestic market, with particular reference to import prospects and
duty structure.
Dispelling the impression that a change in sugar policy was on the
anvil, the finance minister said, "no decision has yet been taken
in this regard and assured to consult the stakeholders - growers,
importers and sugar industry - before taking any such decision.
Rasees Ashraf told Dawn that the minister informed him that the
government was keeping a close watch over the sugar stocks and its
prices and would safeguard the interest of consumers, as well as
other stakeholders in the trade.
The finance minister also assured to look into the matter relating
to a sugar consignment held-up at Wagah border following government
decision to ban imports from India about three months back, the
Chairman PCIA said.
The government allowed around 350,000 tons of sugar import from
India but some ugly development on political front compelled
Islamabad to immediately ban further imports from India.
As a result of it only 100,000 tons of refined sugar could reach
Pakistan and around 60,000 to 70,000 tons was in the pipeline. The
minister also hinted at allowing import of balance quantity of
around 200,000 tons, if such a situation arises, Raees Ashraf said.
Presently, the refined sugar in open market is available at the
rate of Rs23.75 per kg, but some analysts feel that there would be
a shortfall of around 0.3 million tons to meet the country's
consumption of around 3.4 million tons.
This year the local production of sugar stood at around 2.4 million
tons and adding to 0.6 million tons extracted from imported raw
sugar and 0.1 million tons of Indian commodity, a shortfall of
around 0.3 million tons is being feared.
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20010514
-------------------------------------------------------------------
WAPDA against Rs 700 million waiver to armed forces
-------------------------------------------------------------------
Khaleeq Kiani
ISLAMABAD, May 13: Power utility WAPDA has opposed to write off
around Rs700 million the armed forces are required to pay as late
payment surcharge on electricity dues.
Sources in the finance ministry told Dawn that various limbs of the
armed forces owed slightly over Rs3 billion outstanding dues to
WAPDA till early last month. The total amount rose up by another
Rs700 million due to accumulation of late payment surcharge.
Under the normal procedure, all the utilities including telecom,
gas and electricity are entitled to charge late payment surcharge
from all consumers in case monthly bills are not paid within the
given date.
The general headquarters (GHQ) had asked the chief executive to
waive the late payment surcharge on electricity dues in view of
this undue cash burden. WAPDA Chairman Lt. Gen. Zulfiqar Ali Khan
has however objected to the proposed waiver on the ground that late
payment surcharge was a uniform policy and a right of the utility
to be compensated in lieu of late payment.
WAPDA is of the view that it has never been given a special
treatment in financial matters and instead the federal government
has been providing loans to it on much higher interest rates when
compared with original loan secured by the government.
In some cases, WAPDA is charged at as high as 18 to 24 per cent
interest rates on loans and aids the government obtained from the
World Bank, Asian Development Bank (ADB) and Kuwait Fund etc at 1.5
per cent service charges.
Official sources said that the late payment surcharge could not be
changed to the benefit of one consumer group otherwise it would set
a wrong precedent for others to follow.
WAPDA is of the view that in case the government wanted to give any
relaxation to any consumer, the finance ministry should do so from
its own resources or pay compensation to the utility. A final
decision on the subject is expected within a couple of days,
official sources said.
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20010518
-------------------------------------------------------------------
Local companies can make foreign investment
-------------------------------------------------------------------
Reporter
KARACHI, May 17: The State Bank on Thursday allowed tax paying
Pakistani companies to make equity investment abroad through inter-
bank foreign exchange market. SBP said in a press release that the
companies could also make equity investment abroad from the funds
available in the foreign currency accounts of the investors held in
Pakistan or abroad.
The companies would only be asked to repatriate to Pakistan the
profits and dividends earned on their foreign investment. The SBP
decision came after the federal cabinet on Wednesday gave a go-
ahead to the local companies to make equity-based investment
abroad. Now tax paying Pakistani companies can invest their funds
abroad for setting up joint industrial ventures and for seeking
undertakings in any business or listing on foreign stock exchanges.
"This policy has been enacted to encourage leading Pakistani
companies to compete in the international market place and benefit
from the growing opportunities in world trade." Foreign investment
made by Pakistani companies will also create a demand for Pakistani
managers, labour, locally built equipment and machinery and
services in addition to earning foreign exchange for the country.
Pakistani financial sector institutions, consulting firms and IT
companies are particularly suited to avail of this facility as
these ventures are relatively skill-intensive and require small
capital outlays. Bankers said the central bank might issue a
detailed procedure to be followed for making foreign investment in
a day or two.
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20010517
-------------------------------------------------------------------
AGP audit, account offices to be separated
-------------------------------------------------------------------
Reporter
ISLAMABAD, May 16: The Federal Cabinet on Wednesday approved the
separation of audit and accounting functions of the office of
Auditor General of Pakistan. The decision has been taken to accord
greater authority and autonomy to AGP office.
The meeting, presided over by the Chief Executive, Gen Pervez
Musharraf, also authorized the State Bank of Pakistan to allow
equity-based investment abroad, by resident Pakistani companies.
"The separation of audit and accounting functions was one of the
conditionalities of the IMF and the World Bank which we have today
implemented in the larger interest of the country", said Additional
Secretary, Ministry of Finance Dr Waqar Masood Khan.
Dr Khan, who is also spokesman of the ministry of finance, informed
Dawn, this decision is one of the most important steps to improve
the overall governance and the country's financial management.
He said, IMF and World Bank had been asking Pakistan for the last
six years to separate the functions of audit and account but it
could not be carried out. "The decision has been taken by this
government as it does not have any political interest", he said
adding, "now there will be real transparency in the financial
affairs of both centre and provinces.
He said it is not true to presume that this decision of the Cabinet
will promote federalisation and will undermine the authority and
powers of provinces. Dr Khan said, Cabinet has ensured that
employees of provincial governments and as well as those in
districts, working in accounting departments, will not be removed
from their jobs on account of this decision.
To establish a credible distance and separation between audit and
accounting functions, Cabinet approved two draft ordinances vesting
greater authority and autonomy in the office of the Auditor
General, while creating a separate office of the Controller General
of Accounts for preparing and maintaining accounts of federation,
provinces and district governments.
The Controller General of Accounts will accredit all payments and
withdrawals from government funds against approved budgeted
provisions through offices at federal, provincial and district
levels.
While approving draft laws on the subject, Cabinet noted that the
establishment of a separate office of Controller General of
Accounts was in line with the principle that the authority which
prepares accounts ought not certify the same as this creates
conflict of interest.
As part of governance reforms, the government had established a
committee in February last year on separation of audit and accounts
headed by H.U. Baig, former finance secretary. This decision has
been taken on committee's recommendations, which includes members
of the profession from public and private sectors. The two draft
ordinances were formulated in consultations with the committee and
the Auditor General of Pakistan.
The Cabinet decided to allow State Bank of Pakistan to grant
permission for equity-based investment abroad by resident Pakistani
companies. Such investment will also create a demand for Pakistani
managers, labour, goods and services abroad in addition to earning
foreign exchange through repatriation of profit and dividends. It
will discourage Hundi as channel of remittance and encourage
funding through official channels.
The Cabinet approved initiation of negotiations for an agreement on
avoidance of double taxation and prevention of fiscal evasion of
taxes on income between Pakistan and Jordan. The purpose is to
clearly define the tax rules in case of cross-border business
transactions.
Signing of an agreement between Pakistan and Iran on co-operation
in the field of quarantine and plant protection was also approved
in the meeting. The cabinet gave its consent to introduction of a
Tariff Ticketing System in Islamabad Capital Territory, for
improvement in regulations and collection of fines from the
violators of traffic laws.
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20010517
-------------------------------------------------------------------
Relaxation in monetary policy not on cards: SBP-Fed rate-cut
-------------------------------------------------------------------
By Our Staff Reporter
KARACHI, May 16: The State Bank of Pakistan (SBP) is not going to
ease off its monetary policy in line with the trend prevailing in
the international markets.
"Easing off of monetary policy is not on cards," SBP Economic
Advisor Dr Mushtaq A. Khan told Dawn here on Wednesday. He was
asked over telephone whether SBP was going to lax monetary policy
after a half per cent cut in the US benchmark interest rates on
Tuesday.
The half a per cent lowering of short term benchmark interest rates
as well as discount rates by Federal Reserves on Tuesday is the
fifth such move during this year aimed at reinvigorating the
sluggish US economy. The central banks of Japan and European Union
have also eased off their respective monetary policies recently to
ward off a global economic slowdown as a result of the sluggishness
in US economy.
"In view of the existing stabilization programme the interest rates
in Pakistan are not linked with the international markets," Dr
Khan. He was referring to the $596 million IMF standby credit
programme currently in operation in Pakistan. "We are on track of
the IMF programme which should take us to Sept-Oct this year," he
said. Pakistan entered into the 10-month programme at the end of
November last year and has so far got two trenches of the $596
million programme. An IMF mission is currently in the country to
see if Pakistan has done enough home work to qualify for getting
the third and final tranche.
Pakistan has secured the two trenches after meeting a number of
tough IMF conditions that effectively leaves no room for the
country to lax its monetary policy. What exactly makes it very
difficult for Pakistan to lower interest rates in line with the
international trend is that the Fund wants the country to manage
its quasi-free exchange rate regime through interest rates. Of
course a country like Pakistan with a huge negative balance of
payments cannot go for lowering interest rates at a time when this
is bound to have immediate adverse impact on its currency.
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20010515
-------------------------------------------------------------------
SECP chief greeted by demonstrating stock brokers
-------------------------------------------------------------------
Dilawar Hussain
KARACHI, May 14: Securities and Exchange Commission of Pakistan
(SEC) Chairman, Khalid Mirza was greeted by a demonstrating crowd
of brokers and their agents, when he reached the Karachi Stock
Exchange on Monday.
Mirza had sought to hold a meeting with members of the bourse, but
none except 10 or 12 of the 200 strong-member fraternity gave him
the listening ear; the remaining either abstained or joined the
crowd of around 100 people who had gathered outside to voice their
displeasure at the role of the regulator.
Never on an exceedingly cordial terms, the relationship between SEC
and the KSE soured further since February, after the newly
appointed Managing Director Noman Ahmed started calling shots,
which brokers allege were being 'dictated' from Islamabad. "MD
should be responsible to the board and not the SEC", one irate top
broker, who asked not to be identified, told Dawn, adding that a
three-fourth majority of directors should have the power to fire
him (the MD).
Similarly, he said, the non-member directors were playing to the
tune of the Regulator, since the members had been stripped of the
authority to appoint them. He affirmed that these were the issues
at the heart of the problem. "T+3 system, transaction fee and
others were the matters of secondary importance", he argued.
When questioned, SEC chairman Khalid Mirza told Dawn on Monday
evening that all of those matters (appointment of MD, outside
directors) had earlier been amicably settled with the exchange's
leadership. He contended that MD had to be independent of the
members so as to enforce the self-regulatory role of the exchange.
KSE, he said is a 'mutualised body', and it was the responsibility
of the Regulator not only to protect the interests of the members,
but also the issuers of capital and the investors. "Just as the
central bank approves the appointment of CEO for banks, the SEC has
the authority to approve the MD of bourses, so what's wrong with
that?", he queried.
Mirza claimed that the transaction fee proposed to be levied at
0.0009 per cent was one-eleventh of what India charges and the
'lowest fee in the world'. About the T+3 System, he said, the
bourse had itself proposed to adopt it in a meeting on June 12,
2000. While Mirza contended that the exchange was adopting the
system at "its own pace", a major member disagreed saying that the
bourse wanted to prepare the ground work before launching it in
June.
Mirza said that with the installation of an independent CEO;
implementation of brokerage registration rules; T+3 system and
financial autonomy of the SEC, the Pakistani capital market would
be ahead of all of South East Asia in the enforcement of 'last
instalment' of the capital market reforms under the ADB's
'International Financial Standards'. He claimed that this fact was
lauded by the ADB at its meeting in Hawaii, conducted under the
'Financial Stability Forum', where he had presented a paper on the
Pakistan capital market.
Meanwhile, a stock broker lamented that the community did not
oppose the SEC when it set out to change the capital adequacy
regulations; the revision of capital balance and it even conceded
to the SEC demand that the chairman of the bourse should not be the
chairman of the CDC. "But the MD should be accountable to someone",
he insisted.
When Mirza was asked how he thought the thorny issues could be
resolved, he said he would push along with his reforms programme,
notwithstanding. He regretted that the brokers did not agree to his
invitation to a dialogue. The overwhelming majority of stock
brokers do not clearly see eye to eye with the Regulator, which
sets the two sides on a coalition course. In the absence of a face-
to-face interaction between the two, 'a third party' intervention
seems inevitable.
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20010516
-------------------------------------------------------------------
IMF team meets money changers
-------------------------------------------------------------------
By Our Staff Reporter
KARACHI, May 15: Money changers on Tuesday told the visiting IMF
mission that the Fund must restore previously-approved long-term
loans for Pakistan to pull it out of financial crisis.
Senior representatives of Forex Association of Pakistan met three
of the five-member delegation at State Bank office and gave them a
briefing on how open currency market works in this country. Two of
them were (i) Jean Lea Dem and (ii) Marcio Ronci. The name of the
third member of IMF delegation could not be known.
The Association team, led by its president Malik Bostan, told the
IMF people that by blocking the inflow of already-approved long-
term loans for Pakistan the IMF has complicated financial woes of
the country, Bostan told Dawn on telephone. He said FAP
representatives also made it clear to the IMF team that some 400
licensed money changers had nothing to do with hundi system- the
network involved in informal transfer of foreign exchange.
"We told them that almost the entire inflow in open market is in
the shape of foreign exchange brought home by overseas Pakistanis,"
said Bostan. He said the IMF people explained to the money changers
that the Fund wanted proper use of foreign funds by Pakistan. He
quoted them as saying that unless the country channels foreign
funds into the areas vital for economic reform how can it get rid
of foreign debts.
Bostan said FAP members explained to the IMF team how open currency
market operates in Pakistan, and told them that money changers in
Pakistan do not run any foreign branches or have links with money
changers in international markets except for those in Dubai. He
said the Fund people were also briefed about the reasons for recent
cancelling of licences of 18 money changers by the SBP. "They just
listened to and made no comments," he said.
SBP had cancelled licences of 18 money changers for their failure
in providing sale and purchase data for six consecutive weeks.
Bostan said FAP members informed IMF team about the recent
arrangement between the state-run National Bank and licensed money
changers wherein the latter sell all foreign currencies to the NBP
that in turn export it to Dubai.
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20010515
-------------------------------------------------------------------
Brokers begin confessing faults
-------------------------------------------------------------------
Khaleeq Kiani
ISLAMABAD, May 14: Weak brokers and stock agents have started
volunteer declaration of their wrong doings in the share dealing of
listed companies in the wake of measures introduced by the
Securities and Exchange Commission of Pakistan (SECP).
Sources revealed that the chief executive of International
Investment and Financial Services Limited (IIFSL), who also deals
in number of shares, has reported large scale fraudulent
transactions in share trade that could lead to liquidation of over
a dozen companies.
Documents available with Dawn reveal that head of IIFSL has made
voluntary confessions before the SECP on the condition of
forgiveness and official protection, as he received life threats
from the management's and owners.
The case has come to light after the recent default and arrest of
former President Lahore Stock Exchange (LSE), Nosher Dastoor. The
company has a chain of concerns including a leasing company, a
mutual fund, a Modaraba company and sizeable shares in other
institutions.
The official said that he placed the entire shareholding of these
companies at artificial rates as high as 70 to 80 per cent per
annum. "The entire cost of BADLA was met by the company's fund
thereby, distorting the financial position of the company. In
consideration of entering into BADLA transaction. I get the
kickback outside the books", said the official in his statement.
He said that he transferred his personal loss of Rs1 million in the
books of mutual fund in 1999-2000 but could not be detected by the
auditors. He said that he single handedly disposed off the entire
shareholding of the leasing company at a fairly low price on the
wishes of the management without obtaining board approval.
The official also caused a loss of Rs13 million to the national
exchequer in taxes and tailored to conceal the loss of Rs40 million
in the shape of under provision of receivables hiding badla cost
under trade creditors.
Back to the topEDITORIALS & FEATURES 20010513 ------------------------------------------------------------------- The Kidney Centre - nationalized! ------------------------------------------------------------------- Ardeshir Cowasjee ON the morning of February 11, a Sunday, six members of the board of governors of The Kidney Centre declared themselves to be shocked and grieved having read in this newspaper of record that the Centre they had founded, funded or helped to fund, built and nurtured for some fifteen years had suddenly been nationalized by an ordinance promulgated by the governor of Sindh. They knew nothing of the background, or why, or by whom, the governor had been persuaded to act. The six were Mian Mohammad Rafi, chairman, Haamid Jaffer, vice chairman, members Marriana Karim, Mushtaq Chhapra, Iftikhar Hussain and Munawwar Habib. Two other members, Dr Syed Ali Jafar Naqvi and Dr Mir Rehman Ali Hashmi were neither surprised nor shocked for it was they who had instigated and engineered the promulgation of the nationalization ordinance without the knowledge or consent of the board. It took the six shocked members four days to obtain a copy of Ordinance No.XI of 2001 of February 10, which effectively announced the virtual nationalization of the Centre. The purpose of the founding of the Centre was "to build, construct, erect, maintain, administer and operate a hospital together with such ancillary facilities as may be deemed appropriate for the prevention, cure and treatment of renal diseases; and, inter alia, to make provision therein for the free treatment and/or at concessional rates of poor and deserving patients." The governor's ordinance changed the purpose "to provide for care and attendance of persons requiring medical attention relating exclusively to renal diseases." The poor have been swept away. It is silent on free treatment or treatment at concessional rates of the poor and needy suffering from any ailment. It lays down eight other functions connected with teaching, research, co-operation with government and international organizations. It specifies that the institute will take all actions which may further it as a place of education, learning, research and consultancy. It names Dr Jaffar Naqvi as chairman of a nominated predominantly ineffective governing board of non-productive government functionaries. By February 17, two board members managed to get through to Governor Mohammadmian Soomro. He arranged for them to meet provincial health minister, Major-general Ahsan Ahmad. The minister displayed astonishment at the discovery that there existed an alive and functioning board of governors of the Kidney Centre, (one member of which is at the Centre every day), the majority of whom were unaware of the circumstances under which the nationalization ordinance was promulgated and notified. He immediately suspended the implementation of the terms of the ordinance. Minister Ahmad was regretful and solicitous. He indicated that two doctors had conveyed the impression that there was no functioning board, and he told the two members that it would merely take the governor's signature to redress the wrong and repeal the ordinance. He asked the board to file an appeal for the repeal. Three members (Karim, Chaapra and Hussain) did so on February 21, personally delivering the appeal to the minister who then asked them to let him have a resolution stating that the board had neither resolved nor instigated the promulgation of the ordinance and did not support it. This was done on February 27. The minister later informed them that repealing the ordinance might be embarrassing for the government, that they should seek legal advice and let him have a draft of an amending ordinance which in effect would comprehensively undo the damage done by Ordinance No.XI/01. This was done, and copies of all documentation involved in the repeal were given to Governor Soomro, who assured the board members that the required amending ordinance would soon be promulgated and the matter resolved. On March 12, the Minister convened a full board meeting at his office. He categorically asked Dr Naqvi as to why the government of Sindh had been misled by him, to which Dr Naqvi could make no reply. Each member present was asked if he/she supported the ordinance. Five who were present (Rafi, alternate governor Nasir Jaffer, Karim, Chaapra, Hussain) said no. Naqvi and Hashmi did not utter. The meeting was concluded by the minister declaring that the matter would be placed before the governor who was then on Haj. Meanwhile, as the government's shenanigans became known, private sector funds on which the Kidney Centre depends dried up. All that has come in since February is a trickle of what was promised prior to the government's misadventure. Representing my family and friends who had made donations upon my recommendation and guarantee that money would flow into a privately-run, well-managed organization, I asked the board to return our unspent money, of all donors to the private Centre prior to its nationalization, so that they could divert their support to another private sector institute. The draft of the repealing ordinance was sent to the minister early in April. On his return, the governor convened a full board meeting on the 9th, at which the board requested me to be present to speak on behalf of the donors who wished to retrieve their money, money the Board was honour-bound, under the prevailing circumstances, to return. Before I went into the meeting, Shahid Feroze of PERKS, on behalf of the governor, asked me to remain silent as I was not a board member. I replied that if the governor decided to repeal the ordinance I would remain silent, otherwise I would have to speak up. At the meeting, I duly remained silent as the governor declared that the damaging ordinance, inadvertently promulgated would be repealed. He was thanked by all present. Dr Naqvi, secretary and member of the board, though invited, chose not to attend the meeting. He had an office at the Kidney Centre, and the day after the governor's meeting he collected the office files and left, later declaring to well-wisher Doctor Rashid Jooma that he was a man of principles and once he had turned his back he would never return. His absence from the scene has made no difference to the functioning of the Centre which continues to be managed by the administrator in accordance with the ISO standard certification 9002. On April 13, health minister, General Ahmad called a press conference at which he conveyed the government's decision to repeal Ordinance XI. But for reasons not disclosed, the governor did not keep to his word. The repealing ordinance was not promulgated. He asked his principal secretary, Brigadier Akhtar Zamin, to inform the Board in his own language that the government found it embarrassing to promulgate such an ordinance and that since the Centre had been built on army land the army wished the board to be enlarged and packed with government flunkies, as described in Ord XI, so that the in-fighting amongst the board members may end. The brigadier was told there was no in-fighting, no divergent opinions since Doctor Naqvi had left, and that the Centre was functioning normally and efficiently. The members were given time to consider the board's expansion and were told that in case they did not agree the land and the Centre standing thereon would be taken over by the army. Brigadier Zamin was obviously unaware that when the army land was leased in perpetuity the original charter of the Centre provided for the quartermaster general of the army to be a member of the board. At that time the then QMG sensibly decided that he did not wish to interfere in its affairs. As far as the board is concerned, it has never had any problem with the QMG representing the army, sitting on the board, or deliberating with it. Stalemate. On May 10, I called on provincial health minister Ahmad. No joy. Our governor, following the political pattern set by such men as PPP Commuter Qaim Ali Shah, spends most of his time flying in the governor's plane between Karachi and Islamabad. He returned late in the evening of May 10. I tried to see him on May 11, without success. However, he was good enough to telephone me that afternoon to tell me that he could not repeal the offending ordinance and had acted as he had because of pressure from General Headquarters. I reminded him that there was only one General who mattered now, General Pervez Musharraf, and that there was no such being called Headquarters. It was a mere conglomeration of barracks and buildings, old field pieces guarding its gates. As a result of this government's stance, the privately funded efficiently operated educational and health organizations (e.g. LRBT) are worried. As a first consequence, Razak Taba's family and friends who were in the process of donating Rs.75 million to the Jinnah Hospital for the establishment of an MRI centre have withdrawn. The government on the one hand, is privatizing and on the other, nationalizing and this is bound to shake the confidence of private sector donors as well as the World Bank, that unpopular maai-baap of beggars and insolvents. This is no time for nepotistic practices. General Musharraf is talking to Zhu, the premier of our re-emerging ally, which should remind him of that old saying of Confucius: He who fears losing face has no face to lose. DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS 20010518 ------------------------------------------------------------------- Canker in an ideal relationship ------------------------------------------------------------------- Ayaz Amir The canker in an ideal relationship What could be more enduring or stable than our friendship with China? Yet somehow we still end up protesting too much about it. Basking in the glow and warmth of an old and trusted relationship is one thing. But acting in a manner that at times comes suspiciously close to hysteria only goes to reveal a sense of insecurity. For a government that is read lectures in democracy by the West it is no doubt tempting to play up the iconic status of its ties with China, especially a China whose shadow looms ever larger on the world stage. Even so, it helps to remember that while China fills a vital space in Pakistan's quest for international support and sympathy, it is in no position to cover all of Pakistan's needs. The relationship between Israel and the US is strategic in every sense of the word. The US makes sure Israel enjoys military preponderance over its neighbours. When Israel goes to war US support is automatic and comprehensive. There is a material aspect to the relationship between Pakistan and China. But its essence is emotional and sentimental, fulfilling Pakistan's psychological need for an external anchor to shore up its position against India. This need was first met by the United States which not only helped build up the Pakistan military but also, in lieu of Pakistan's client status in the cold war, strengthened Pakistan's self-esteem as it sought equivalence with India. When the US disavowed this role, Pakistan sought to fill the breach by turning to China. To be honest, Pakistan with its constant and reiterative whining over Kashmir and other problems can test the forbearance of friend and foe alike. But China has conducted itself in exemplary fashion, much like a patient psychoanalyst, lending a sympathetic ear to Pakistan's often baffling troubles and proffering, when the occasion arises, calm and soothing advice. But it is in no position to act as nanny to Pakistan as the US acts towards Israel. Not so much from want of inclination as for lack of means. China has not the wherewithal - or, to be fair, the reasons - to support us the way the US reinforces the bastion of its interests in the Middle East. Chinese weapons we buy out of poverty or necessity, not as a matter of first choice. When we have the money, we do our arms shopping in the West: F-16s from the US, Agosta submarines from France, even tanks from the Ukraine, and so on. Our trade is with the West, our sturdy begging bowl tipped in that direction. With China we discuss project aid, undoubtedly useful but not urgent. With the IMF we talk economic survival. In Chinese company we are infected with Maoist enthusiasm and in that mood even dyed-in-the-wool mandarins talk sternly of self-reliance. But when the moment passes, as it soon does, and grim necessity takes hold, the same mandarins open their account books to inquisitors from Washington. Not to forget an important point, our much-vaunted nuclear programme also has a western parenthood. Dr Khan, our Oppenheimer now mercifully put out to pasture by the military government, got his blueprints from Holland, not from any university in China. And over the years most of the components that have gone into the creation of the Kahuta complex have originated from western countries. None of this is to decry our China friendship. Far from it. But we need not to be victims of our own rhetoric. The Pakistani establishment has always been fixated on foreign policy and has been slave to the belief that triumphs abroad (most of them painfully short-lived) can make up for failures (some of them painfully enduring) at home. In the 50's and 60's the forging of the American connection made us neglect more urgent duties of nation-building and constitution- framing. In 1971 the role we played in opening bridges between the US and China was partially responsible for General Yahya's arrogance and his belief that he could bypass the necessity of seeking a political settlement in East Pakistan. In the 80's the role we played in Afghanistan to further American interests made us turn a blind eye to our own national interest. The dangers we courted then have become more intractable with time while the rest of the world has moved on to other things. In 1965 China issued an ultimatum to India, something which we tend to believe prevented India from making any move against a defenceless East Pakistan. But Chinese leaders, veterans of the Long March, were baffled by our inability to even consider prolonging the war beyond 15 or 17 days. In 1971 the Chinese leadership advised moderation in East Pakistan. But General Yahya Khan was somehow persuaded that China would intervene militarily on our behalf. In 1999 when fighting flared over Kargil China counselled us to step back. All in all then, a restraining influence on our exuberance. But we have always tended to read more into this relationship than warranted by the facts. So we come to the present. Just a day or two after Premier Zhu Rongji left Pakistan, General Musharraf at the Institute of Strategic Studies in Islamabad said: "Pakistan's security interests lie in maintaining regional balance..." While there can be no quarrel with this he went on to say: "...and in this (that is, in maintaining a regional balance) it would desire an active Chinese role...This role will remain vital, specially so in the changing geo-strategic realities. The end of the Cold War has led to a change in global equation, leading to emergence of regional hegemons or countries with hegemonistic tendencies. South Asia is a victim of regional hegemonism. This creates regional imbalance which, in turn, threatens peace." In plain language this means that China should to step in to balance India's growing clout in South Asia. Quite apart from the circumstance that whoever is responsible for this tortured syntax deserves a spell in the stocks, the thinking behind these words is flawed. A regional imbalance anywhere - East Asia, the Middle East, South Asia - is a recipe for instability. But whereas in East Asia - Japan, China, the Koreas - the balance of power is maintained by the US, and whereas in the Middle East the imbalance in Israel's favour is promoted and sustained by the US, in South Asia the role or interventionism of no outside power, not even China's, is needed to redress any imbalance. If it is, then Pakistan's nuclear arsenal and its large army make no sense. Let us rid ourselves of the notion that South Asia is a victim of hegemonism. India is not that powerful nor Pakistan that weak for hegemonism to flourish. True, India tends to be overbearing while dealing with its neighbours - a tendency arising as much from its size as from its parvenu status which goads it to prove that it is a great power. But Pakistan needs no outside help to offset this tendency or stand up to India when the occasion demands. If anything, any high profile foreign role in South Asia will exacerbate not check instability for it will spur India to spend more on defence and missiles. Which in turn will prompt Pakistan to match India bomb for bomb and missile for missile. Stability in the sub-continent lies in two things: limiting and then downscaling the military competition between India and Pakistan; and finding a modus vivendi (as opposed to the chimerical notion of an outright solution) over Jammu and Kashmir. But this has to be a native endeavour. The wisdom to live as good (and wary) neighbours will have to come from within the sub-continent, not outside it. As for Pakistan, it must learn to take its own decisions without knee-jerk reflexes to external stimuli. What if the Vajpayee government is currying favour with the Bush administration by making supportive noises over the bogey of missile defence? It doesn't mean we swing immediately in the other direction. Nor should it mean we get upset by some ill-judged remarks of a second- tier State Department official like Richard Armitage. It should take more than this to upset our equanimity. Pakistan must learn to get out of its Indo-centred mode of foreign policy. While what India does matters to us, every foolish word uttered in New Delhi should not call for a matching Pakistani response. Consider the harm we did ourselves when we fell for Indian sabre-rattling after India's nuclear tests and went for tests of our own. If only we could have checked our horses then. The best answer to Indian hegemonism is not a China active in South Asia but a Pakistan at peace with itself and strong at home, something that can only come from its own efforts. If there is one thing China's example has to teach us it is this. DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS 20010519 ------------------------------------------------------------------- Welcome to the dark side ------------------------------------------------------------------- Irfan Husain As the accountability against politicians and bureaucrats grinds on, there are occasional complaints in the press that two institutions have been left out, namely the military and the judiciary. Actually, there is a third sacred cow that has not been touched, nor has it been mentioned very often: the press itself. There was a huge furore when General Pervez Musharraf once referred to 'lifafa journalism' during a press conference in New York lat year. (The 'lifafa' is the envelope in which hacks on the tack get their alleged kickbacks from their paymasters). The general was told to either name names or back off. In the event, our chief executive decided that discretion was the better part of valour. But from time to time, this allegation has surfaced and ruffled the feathers of editorial writers and columnists who indignantly and forcefully defend the pristine integrity of their colleagues. A few days ago in Lahore at a small dinner party, an ex-federal minister disclosed that during his stint in government, the then head of an intelligence agency had given him lists of journalists who were supplied with booze and visas by the Indian high commissions; there was also a list of journalists supposedly on the payroll of the US embassy. One only wishes the chief spook had included those journalists who get 'lifafas' from his and other federal and provincial agencies on a regular basis. Indeed, when he was the federal minister for information, Javed Jabbar had disclosed that his minister had previously kept an entire stable of newspapermen on its payroll and paid them off from its secret fund, but the present government had ended this practice. It is a fact the print media has played a major role in the removal of elected governments, and in the final analysis, it is answerable to nobody. Each time one political party wins an election, its rivals begin a destabilizing campaign aimed at dislodging it, and are supported in their efforts by shadowy intelligence agencies through their team of journalists. All kinds of rumours and allegations are given currency, and after they have been widely reported, acquire a life of their own. Soon, mainstream newspapers are reporting them as the gospel truth, and the government is put on the defensive, using energy and political capital in denying real and concocted charges.To illustrate this point, I would ask readers to recall a particularly bizarre charge that was laid at Asif Zardari's door during Benazir Bhutto's first stint. A British businessman of Pakistani origin claimed that he had collected funds in the UK for a charitable hospital here, but this money had been extorted from his by Asif Zardari's henchmen who had then proceeded to tie a bomb around his leg and drove him to the airport from where he caught a plane to London. When the story appeared, all hell broke loose. Lurid details were published and the prime minister furiously denied the charge as did her husband. The Washington Post carried a long report filed by its reporter in Pakistan. All of us were convinced that where there was smoke, there must be some fire. But when the PPP government fell, and Zardari was tried for this alleged crime a curious story emerged. Apparently, the complainant's wife had been allotted a plot of land 'on compassionate grounds' in Lahore by the then opposition leader and Punjab chief minister, Nawaz Sharif. And when cross-examined by the defence lawyer, Aitizaz Ahsan, the accuser tipped up every time he opened his month. For instance, when asked at what point he ignored the airport authorities that he had a bomb tied to him, he had no answer. It is an unfortunate fact that many newspaper owners grossly underpay their staff, closing their eyes to the corruption that goes on, or indeed profiting by it. Having no doubt angered many colleagues, let me hasten to add that there are fortunately many honourable men and women in the profession who have fearlessly exposed the truth and turned down all bribes and blandishments. A number of writers, editors and publishers have stood up to authoritarian governments and suffered as a consequence. When we talk of the freedom of the press in Pakistan, it is important to remember that it was wrested from autocrats by brave journalists, and was not handed to them on a platter. However, we must also be honest enough to admit that there is much wrong with our profession, and the beginning of the rot lies in the pay structure. For far too many owners, this is a business as any other in which you squeeze the employee and screw the consumer to maximize profits. For ill-paid (or unpaid) hacks, the temptation to join the gravy train smut be overwhelming. I suppose I can afford to moralize on the subject as I do not depend on journalism for a living. But until we openly debate and denounce the corruption in journalism, we cannot really condemn it in other institutions.
SPORTS 20010518 ------------------------------------------------------------------- Rains wash way opening day of Lord's Test ------------------------------------------------------------------- LONDON, May 17: England's frustrations were completed on Thursday when all-rounder Craig White was ruled out of the first Test against Pakistan at Lord's after the opening day was washed out without a ball being bowled. The England all-rounder withdrew with a stiff back which also looks certain to sideline him for the second and final Test at Old Trafford. It could also force him to miss the start of Australia's Ashes tour. The home team had declined naming their line-up on Wednesday to give the Yorkshire player a last chance of recovery after he failed to take part in a "final fitness test". But coach Duncan Fletcher said: "We have released Craig for two weeks. It's very disappointing since it's easier to balance the side with him, as he's two players in one. Pakistan play two Tests before taking part in a one-day triangular series also involving Australia, the side who beat them in England in the 1999 World Cup final. Australia will then take part in a five-match Ashes series.-Reuters/AFP DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS 20010517 ------------------------------------------------------------------- Pakistan seek revenge against England ------------------------------------------------------------------- LONDON, May 16: Pakistan will be out for revenge when the first Test against England starts here at Lord's on Thursday. The tourists lost their unbeaten record at Karachi during the winter when England won the third Test of three and took the series 1-0. But Pakistan will have to be quick about their work: there are just two Tests on this tour, which serves as an appetiser for the five- Test Ashes series here between England and Australia. The decision to play just two Tests against Pakistan this summer, when series between the two sides here have usually been comprised of three and sometimes five matches has caused ill-feeling. Certainly Pakistan, a team with plenty of star names, deserve to be more than an Ashes warm-up act and it's hard to imagine Australia being treated in the same way. However, Tim Lamb, the chief executive of the England and Wales Cricket Board (ECB) insisted no slight was intended. "It is completely wrong to suggest that the ECB's decision to host two Test matches against Pakistan this summer reflects poorly on the tourists," said Lamb. "Our original plan for this summer was to play a six-Test Ashes series against Australia only. "However, following our new broadcasting deal with Channel Four and Sky in 1998, we agreed to expand the international match programme to seven Test matches per summer and introduce a triangular one-day tournament. "I can reassure Pakistan supporters that the ECB has the utmost respect for their team's ability. "They are one of the most exciting sides to watch in world cricket and we will be looking to play a minimum of three Test matches and possibly four when Pakistan are next due to tour here again in 2006." England, unusually, will start this series as favourites: they have won four series on the trot while Pakistan have won just once in their last six, although they did manage a 1-1 draw against New Zealand earlier this year. Nevertheless, a number of their leading players - captain Waqar Younis, fast bowler Wasim Akram, leg-spinner Mushtaq Ahmed and off- spinner Saqlain Mushtaq all have extensive experience of English conditions thanks to their time on the county circuit. England's Graham Thorpe said that Waqar his former Surrey team-mate was "an inspring leader of men" and what he may lack in tactical experience he may well make up for in force of personality. That and the collective Test experience of the other senior players may help compensate for a lack of pre-Test match practice. This has been a particular handicap for two of their key batsmen - Yousuf Youhana and Inzamam-ul-Haq, neither of whom has yet played a major innings on tour. Yousuf has so far managed nought, five and four while vice-captain Inzamam's contribution stands at 18 and 13. Waqar admitted that he had yet to finalise his line-up. Pakistan pin-up boy Shoaib Akhtar has been suffering from the after-effects of gastro-enteritis and Waqar said that the 'Rawalpindi Express' and fellow quick Mohammad Sami were both had fitness battles to overcome. "With Shoaib I don't really know yet and with Mohammad Sami it depends on his shin injury," said Waqar. "I'm not sure who will bat at three. Abdur Razzaq can bat at three or six but I like having him in the middle. "We depend more on our bowling so Razzaq is a key man for to give us balance. Saeed Anwar and Saleem Elahi (the opening batsmen) are both in great form and Azhar Mahmood looks good but you can only play 11." Waqar also suggested that only one out of slow bowlers Saqlaim Mushtaq (off-spin) and Mushtaq Ahmed (leg-spin) would play. "Both have been bowling really well and it will be a difficult choice." Meanwhile, Waqar added that captaining Pakistan at Lord's, where he had been a member of two winning Test sides, was an inspiration. "I'm very proud of myself that I'm here captaining Pakistan at Lord's, the best cricket ground in the world," he said. "It will give me strength to know that I have done well here in the past. All we can do now is play hard cricket, do the best we can and leave it to God." England will wait until the final moment Thursday before finalising their team in the hope that all-rounder Craig White will be declared fit. England captain Nasser Hussain said: "He's such a key man - we're going to give him the extra day, the extra night." The all-rounder, suffering from a stiff back, has failed to train with the squad for the past two days and Hussain added after an indoor net session: "Craig didn't bowl too much today either." White, the only genuine all-rounder in the side, had been due to be given a final fitness test on Wednesday. If ruled out, he is likely to be replaced by debutant left-arm seamer Ryan Sidebottom, although pace bowler Matthew Hoggard could also be drafted in despite not being named in England's original squad. Hussain said he was not worried about the prospect of starting the game with two new caps - Side bottom and batsman Ian Ward - in the side. "This is the stage they want to play on, this is Test cricket and they are seasoned professionals," he said. Hussain said he was not flustered about the prospect of dropping down the order from three to number four. "Nasser Hussain's focus is on what's best for England - I've scored 207 against Australia batting at four. Michael Vaughan has the composure to bat at number three and it won't do Graham Thorpe down one place in English conditions. He's such a key player for us that we can do without him coming in at 10 for two." England earlier in the day sent their only slow bowler in the squad, Robert Croft, back to play for his county Glamorgan. But bad weather, not unknown in England at this time of year, could ruin at least one Test in this all-too brief encounter. Possible teams: England: Nasser Hussain (captain), Michael Atherton, Marcus Trescothick, Michael Vaughan, Graham Thorpe, Alec Stewart, Ian Ward, Dominic Cork, Andrew Caddick, Darren Gough, Ryan Sidebottom. Pakistan: Waqar Younis (captain), Saeed Anwar, Saleem Elahi, Abdur Razzaq, Inzamam-ul-Haq, Yousuf Youhana, Younis Khan, Rashid Latif, Wasim Akram, Saqlain Mushtaq, Mohammad Sami. Umpires: Peter Willey (England) and Darrell Hair (Australia). Match referee: Brian Hastings (New Zealand).-AFP/Reuters DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS*DWS 20010515 ------------------------------------------------------------------- Overrated Shoaib fails to convince team coach ------------------------------------------------------------------- CANTERBURY (England), May 14: Pakistan pace bowler Shoaib Akhtar's lingering hopes of playing in the first Test against England appear to be over. Pakistan coach Richard Pybus suggested on Monday that Shoaib, who missed the start of the tour after failing a medical, would not be ready for the start of the Lord's encounter. Shoaib, clearly short of match fitness following a stomach problem and a lay-off with injury, has only played one match and was not selected for the final warm-up against Kent. Pybus said: "He was a bit rusty at Derby last week but he's been better here in the nets. "I'm not convinced he is in the reckoning for Lord's but it's great just to see the kid run in." Shoaib missed Pakistan's previous tour to New Zealand with a leg problem and has also had to remodel his action after being reported for a suspect action. Pybus said: "The illness took a hell of a lot out of him, but it is important that he is working hard and got a smile on his face again.-Reuters ------------------------------------------------------------------- You can subscribe to DWS by sending an email to <subscribe.dws@dawn.com>, with the following text in the BODY of your message: subscribe dws To unsubscribe, send an email to <unsubscribe.dws@dawn.com>, with the following in the BODY of you message: unsubscribe dws ------------------------------------------------------------------- Back to the top.
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