Nadeem Malik

Thursday, May 31, 2007

SEC CHARGES AJAZ RAHIM, PAKISTANI BANKER, WITH INSIDER TRADING

   SEC CHARGES AJAZ RAHIM, PAKISTANI BANKER, WITH INSIDER TRADING

   On May 11, the Commission charged Ajaz Rahim, a Pakistani  banker  who
   was employed by Faysal Bank in Karachi, Pakistan with insider  trading
   based on material,  non-public  information  he  received  from  Hafiz
   Naseem, an employee of Credit Suisse (USA) LLC in New York. In a Third
   Amended Complaint in the insider  trading  case  originally  filed  on
   March 2, 2007, against certain Unknown Purchasers of TXU call options,
   the Commission alleged that, on Feb. 5, 6, 7, 8 and 23, 2007,  Naseem,
   in breach of his duty to Credit  Suisse  and  its  client,  telephoned
   Rahim and conveyed to him non-public, material information  concerning
   the proposed but unannounced leveraged  buyout  of  TXU  Corp.  by  an
   investor group led by Kohlberg Kravis Roberts & Co. and Texas  Pacific
   Group.,  and  other  information.  According  to  the  Third   Amended
   Complaint, Rahim, on Feb. 23, 2007, purchased 6,700  TXU  call  option
   contracts with March 2007 expiration dates through UBS AG London,  and
   15,000 shares of TXU stock through Bank Julius Baer Co. Ltd. (Guernsey
   Branch). According to the Commission, these purchases allowed  him  to
   reap, following the public announcement of the buyout, trading profits
   of approximately $5.1 million.

   The Third Amended Complaint further alleges  that  Naseem  made  calls
   from his office phone to Rahim's home and cell phones and alerted  him
   to pending business combinations and deals involving 9 other  issuers:
   Hydril Company, Trammell Crow Co., John Harland Co.,  Energy  Partners
   Ltd., Veritas  DGC  Inc.,  Jacuzzi  Brands,  Caremark  Rx,  Inc.,  and
   Northwestern Corporation. The Third Amended Complaint alleges that, in
   at least 25 instances, Rahim placed trades in the securities of  these
   issuers minutes after receiving a phone call from Naseem. According to
   the Third Amended Complaint, Credit Suisse  served  as  an  investment
   banker or financial advisor in all of  the  involved  deals,  and  the
   phone calls to Rahim were made close in advance of  -  and  frequently
   the day of or the day before -announcements of the proposed deals. The
   Third Amended Complaint also alleges that Rahim  purchased  securities
   in those companies in advance of public merger  announcements  through
   accounts held at Merrill Lynch  Pierce  Fenner  &  Smith  and/or  Bank
   Julius  Baer  Co.  Ltd  (Guernsey  Branch),   obtaining   profits   of
   $2,425,000. Finally, according to the Third Amended Complaint, Naseem,
   in order to insure he would obtain a personal, financial benefit  from
   his misappropriations, in May 2006 opened up a  brokerage  account  in
   Pakistan and granted trading authority over that account to Rahim, his
   "tippee."

   The Commission alleges that, as a result of  these  activities,  Rahim
   engaged in insider trading  in  violation  of  Section  10(b)  of  the
   Securities Exchange  Act  of  1934  and  Rule  10b-5  thereunder.  The
   Commission is seeking permanent  injunctive  relief,  disgorgement  of
   ill-gotten gains with prejudgment interest thereon, and civil monetary
   penalties. The Commission's original  complaint  against  the  Unknown
   Purchasers alleged that between February 21 and February 23 - prior to
   the public disclosure of TXU  Corp.'s  merger  agreement  -  while  in
   possession  of   material,   nonpublic   information   regarding   the
   acquisition offer, the Unknown Purchasers,  using  overseas  accounts,
   purchased  over  8,020  call  option  contracts  for  TXU  stock.  The
   unrealized  illicit  profits   on   these   option   contracts   total
   approximately $5.4  million.  On  March  2,  2007  the  United  States
   District Court for  the  Northern  District  of  Illinois  in  Chicago
   entered a Temporary Restraining Order freezing assets of  the  Unknown
   Purchasers.  On  March  28,  2007,  the  District  Court  approved  an
   extension of the  asset  freeze  as  to  the  Unknown  Purchasers  who
   purchased TXU securities through Credit Suisse in Zurich and Francisco
   Javier Garcia, then identified as the Unknown Purchaser who  purchased
   TXU securities through Fimat Banque Frankfurt Zweigniederlassung.  The
   Court also approved a 60-day extension  of  the  asset  freeze  as  to
   Rahim, then identified as the Unknown Purchaser who traded through UBS
   AG London. Garcia, believed to be a resident of Switzerland, purchased
   at least 260 TXU call options in advance of the  public  announcement.
   As a result of his insider trading, Garcia is in a  position  to  reap
   trading profits of at least $150,500, the Commission alleges.

   As a result of an Amended Complaint filed by the Commission, on  March
   28, 2007, the United States District Court for the  Northern  District
   of Illinois in Chicago entered a Temporary Restraining Order  freezing
   assets of Sunil and Seema Sehgal, a married  couple  residing  in  the
   United Kingdom. The Amended Complaint added the Sehgals as  defendants
   in the March 2, 2007, case against certain Unknown Purchasers  of  TXU
   call options, and alleged that the Sehgals made highly profitable  and
   suspicious purchases of 700 call option contracts for the common stock
   of TXU Corp. through accounts at Charles Schwab & Co., Inc., and Clark
   Dodge & Co, Inc., in January and February 2007. The Commission alleged
   that, as a result of the increase in price of TXU stock following  the
   public announcement of the leveraged buyout, the  illicit  profits  on
   the Sehgals' option contracts total approximately $270,000.  On  April
   12, 2007, the Court approved a 60-day extension of the asset freeze as
   to the Sehgals. In its Third Amended Complaint, the Commission alleges
   that, in addition to timely purchases of TXU securities, Seema  Sehgal
   also traded Hydril Company  stock,  and  Sunil  Sehgal  traded  Hydril
   Company, John Harland Co., and Caremark Rx, Inc. securities in advance
   of public merger announcements, realizing aggregate trading profits of
   approximately $292,900 in addition to the TXU profits.

   The Commission wishes to  thank  the  New  York  Stock  Exchange,  the
   Chicago Board Options Exchange, the Swiss Federal  Banking  Commission
   and the Financial Services Authority of the United Kingdom  for  their
   assistance in this matter. [SEC v. One or More Unknown  Purchasers  of
   Call Options for the Common Stock of  TXU  Corp.,  Ajaz  Rahim,  Sunil
   Sehgal, Seema Sehgal, Hafiz Naseem, and Francisco Javier Garcia, Civil
   Action No. 07C1208 (N.D. Ill.)] (LR-20113


-----------------------------------------------------------
N A D E E M M A L I K
CNBC PAKISTAN
BUREAU CHIEF
ISLAMABAD

0321-5117511

nadeem.malik@hotmail.com

16th Floor, Saudi Pak Tower, 61-A Jinnah Avenue, Islamabad. 051-2800113-14, Fax: 051-2800118

 



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SEC CHARGES AJAZ RAHIM, PAKISTANI BANKER, WITH INSIDER TRADING

   SEC CHARGES AJAZ RAHIM, PAKISTANI BANKER, WITH INSIDER TRADING

   On May 11, the Commission charged Ajaz Rahim, a Pakistani  banker  who
   was employed by Faysal Bank in Karachi, Pakistan with insider  trading
   based on material,  non-public  information  he  received  from  Hafiz
   Naseem, an employee of Credit Suisse (USA) LLC in New York. In a Third
   Amended Complaint in the insider  trading  case  originally  filed  on
   March 2, 2007, against certain Unknown Purchasers of TXU call options,
   the Commission alleged that, on Feb. 5, 6, 7, 8 and 23, 2007,  Naseem,
   in breach of his duty to Credit  Suisse  and  its  client,  telephoned
   Rahim and conveyed to him non-public, material information  concerning
   the proposed but unannounced leveraged  buyout  of  TXU  Corp.  by  an
   investor group led by Kohlberg Kravis Roberts & Co. and Texas  Pacific
   Group.,  and  other  information.  According  to  the  Third   Amended
   Complaint, Rahim, on Feb. 23, 2007, purchased 6,700  TXU  call  option
   contracts with March 2007 expiration dates through UBS AG London,  and
   15,000 shares of TXU stock through Bank Julius Baer Co. Ltd. (Guernsey
   Branch). According to the Commission, these purchases allowed  him  to
   reap, following the public announcement of the buyout, trading profits
   of approximately $5.1 million.

   The Third Amended Complaint further alleges  that  Naseem  made  calls
   from his office phone to Rahim's home and cell phones and alerted  him
   to pending business combinations and deals involving 9 other  issuers:
   Hydril Company, Trammell Crow Co., John Harland Co.,  Energy  Partners
   Ltd., Veritas  DGC  Inc.,  Jacuzzi  Brands,  Caremark  Rx,  Inc.,  and
   Northwestern Corporation. The Third Amended Complaint alleges that, in
   at least 25 instances, Rahim placed trades in the securities of  these
   issuers minutes after receiving a phone call from Naseem. According to
   the Third Amended Complaint, Credit Suisse  served  as  an  investment
   banker or financial advisor in all of  the  involved  deals,  and  the
   phone calls to Rahim were made close in advance of  -  and  frequently
   the day of or the day before -announcements of the proposed deals. The
   Third Amended Complaint also alleges that Rahim  purchased  securities
   in those companies in advance of public merger  announcements  through
   accounts held at Merrill Lynch  Pierce  Fenner  &  Smith  and/or  Bank
   Julius  Baer  Co.  Ltd  (Guernsey  Branch),   obtaining   profits   of
   $2,425,000. Finally, according to the Third Amended Complaint, Naseem,
   in order to insure he would obtain a personal, financial benefit  from
   his misappropriations, in May 2006 opened up a  brokerage  account  in
   Pakistan and granted trading authority over that account to Rahim, his
   "tippee."

   The Commission alleges that, as a result of  these  activities,  Rahim
   engaged in insider trading  in  violation  of  Section  10(b)  of  the
   Securities Exchange  Act  of  1934  and  Rule  10b-5  thereunder.  The
   Commission is seeking permanent  injunctive  relief,  disgorgement  of
   ill-gotten gains with prejudgment interest thereon, and civil monetary
   penalties. The Commission's original  complaint  against  the  Unknown
   Purchasers alleged that between February 21 and February 23 - prior to
   the public disclosure of TXU  Corp.'s  merger  agreement  -  while  in
   possession  of   material,   nonpublic   information   regarding   the
   acquisition offer, the Unknown Purchasers,  using  overseas  accounts,
   purchased  over  8,020  call  option  contracts  for  TXU  stock.  The
   unrealized  illicit  profits   on   these   option   contracts   total
   approximately $5.4  million.  On  March  2,  2007  the  United  States
   District Court for  the  Northern  District  of  Illinois  in  Chicago
   entered a Temporary Restraining Order freezing assets of  the  Unknown
   Purchasers.  On  March  28,  2007,  the  District  Court  approved  an
   extension of the  asset  freeze  as  to  the  Unknown  Purchasers  who
   purchased TXU securities through Credit Suisse in Zurich and Francisco
   Javier Garcia, then identified as the Unknown Purchaser who  purchased
   TXU securities through Fimat Banque Frankfurt Zweigniederlassung.  The
   Court also approved a 60-day extension  of  the  asset  freeze  as  to
   Rahim, then identified as the Unknown Purchaser who traded through UBS
   AG London. Garcia, believed to be a resident of Switzerland, purchased
   at least 260 TXU call options in advance of the  public  announcement.
   As a result of his insider trading, Garcia is in a  position  to  reap
   trading profits of at least $150,500, the Commission alleges.

   As a result of an Amended Complaint filed by the Commission, on  March
   28, 2007, the United States District Court for the  Northern  District
   of Illinois in Chicago entered a Temporary Restraining Order  freezing
   assets of Sunil and Seema Sehgal, a married  couple  residing  in  the
   United Kingdom. The Amended Complaint added the Sehgals as  defendants
   in the March 2, 2007, case against certain Unknown Purchasers  of  TXU
   call options, and alleged that the Sehgals made highly profitable  and
   suspicious purchases of 700 call option contracts for the common stock
   of TXU Corp. through accounts at Charles Schwab & Co., Inc., and Clark
   Dodge & Co, Inc., in January and February 2007. The Commission alleged
   that, as a result of the increase in price of TXU stock following  the
   public announcement of the leveraged buyout, the  illicit  profits  on
   the Sehgals' option contracts total approximately $270,000.  On  April
   12, 2007, the Court approved a 60-day extension of the asset freeze as
   to the Sehgals. In its Third Amended Complaint, the Commission alleges
   that, in addition to timely purchases of TXU securities, Seema  Sehgal
   also traded Hydril Company  stock,  and  Sunil  Sehgal  traded  Hydril
   Company, John Harland Co., and Caremark Rx, Inc. securities in advance
   of public merger announcements, realizing aggregate trading profits of
   approximately $292,900 in addition to the TXU profits.

   The Commission wishes to  thank  the  New  York  Stock  Exchange,  the
   Chicago Board Options Exchange, the Swiss Federal  Banking  Commission
   and the Financial Services Authority of the United Kingdom  for  their
   assistance in this matter. [SEC v. One or More Unknown  Purchasers  of
   Call Options for the Common Stock of  TXU  Corp.,  Ajaz  Rahim,  Sunil
   Sehgal, Seema Sehgal, Hafiz Naseem, and Francisco Javier Garcia, Civil
   Action No. 07C1208 (N.D. Ill.)] (LR-20113


-----------------------------------------------------------
N A D E E M M A L I K
CNBC PAKISTAN
BUREAU CHIEF
ISLAMABAD

0321-5117511

nadeem.malik@hotmail.com

16th Floor, Saudi Pak Tower, 61-A Jinnah Avenue, Islamabad. 051-2800113-14, Fax: 051-2800118

 



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Wednesday, May 30, 2007

7.2 percent GDP growth, 6.7 percent inflation target for FY08- NEC

7.2 percent GDP growth, 6.7 percent inflation target for FY08- NEC

 

 

The government has projected 7.2 percent GDP growth, 6.7 percent inflation, $8.1 billion current account deficit, and $17.7 billion foreign exchange reserves for the next fiscal year (2007-08).

All projected targets are to be finalised by the National Economic Council (NEC) in its meeting on May 31. Sources said that since the country had witnessed strong growth momentum during last four years, the prospects for sustained high economic growth in 2007-08 remain excellent.

"With evidence of a strong pick-up in domestic and foreign investments, and better performance in agriculture, manufacturing and services sectors, the real GDP growth for the year 2007-08 is targeted at 7.2 percent," they said.

The Planning Commission is of the opinion that 7.2 percent GDP growth target would be achieved through significant investment, both in public and private sectors and including foreign private investment.

The overall investment has been projected at 23.8 percent of the GDP, with private investment taking the lead, as public sector investment would mainly be on developing physical and scientific and technological infrastructure, sources said.

They said that emphasis in the development strategy for 2007-08 would be on achieving high value-addition in agriculture, including livestock and fisheries, and manufacturing, particularly engineering goods and services.

They said that national savings as ratio of GDP have been projected at 18.8 percent to reach the level of Rs 1,883 billion, and added that maintaining balance at the fiscal, monetary and external levels would be the underpinning factor of sustained macroeconomic stability during 2007-08.

SAVINGS AND INVESTMENT The Planning Commission has projected 2,384 billion investment during 2007-08 against Rs 2004 billion in 2006-07, an 18.9 percent increase, to achieve the targeted growth of 7.2 percent.

Fixed investment is expected to reach Rs 2,221 billion, reflecting an increase of 19.2 percent over the investment during current year. To support the higher growth in GDP, PSDP projection, excluding earthquake rehabilitation allocation, has been project to increase from 4.2 percent of GDP (Rs 365 billion) in 2006-07 to 4.8 percent of GDP (Rs 485 billion) for 2007-08, sources said.

As far as financing of the targeted investment is concerned, it has been projected that about 79 percent would be financed through national savings and 21 percent through foreign savings.

BALANCE OF PAYMENTS According to sources, during 2007-08, exports (fob) are projected to grow by 10 percent, to $18.9 billion, against $17.2 billion estimated for 2006-07.

Projections of exports would be based on assumptions, such as (i) an increase in exportable surplus through increase in agricultural production and manufacturing output, (ii) improvement in productivity of industrial workforce through technical education and on job training, (iii) greater market access through bilateral arrangements, preferential and free trade agreements with regional and other countries and (iv) improvement in the overall competitiveness of the external sector by enhancing value addition in the manufacturing sector.

Imports during 2007-08 have been projected to increase moderately by 9 percent, to $29.6 billion, from $27.1 billion in 2006-07, due to higher volume of import of food items, POL, edible oil and fertilisers. As a result, the trade account is projected to be in deficit by $10.6 billion in 2007-08, against the deficit of $9.9 billion estimated for in 2006-07.

Sources said that prospects for invisible balance would continue to be governed mainly by the behaviour of remittances during 2007-08, which have been projected at $5.8 billion, against expected level of $5.5 billion for 2006-07. Allowing for other invisible receipts and payments, the surplus on invisible account is anticipated at $2.5 billion, against a surplus of $2.8 billion estimated for 2006-07.

CURRENT ACCOUNT BALANCE: With a deficit of $10.6 billion on the trade account and a surplus of $2.5 billion on the invisible account, the current account deficit is estimated close to $8.1 billion in 2007-08, against $7.1 billion in 2006-07.

CAPITAL ACCOUNT: Gross disbursements are expected to be $3.2 billion in 2007-08, compared to $3.5 billion in 2006-07, largely due to decline in disbursements of commodity aid. After allowing for other capital movements, surplus of $3.1 billion is expected to occur in the overall balance in 2007-08, as compared to a surplus of $3.0 billion during 2006-07, according to sources.

However, taking into consideration transactions of the banking system and a buildup of $2.8 billion in foreign exchange reserves, the gross reserves are likely to reach the level of $17.7 billion in 2007-08, compared to a level of $14.5 billion in 2006-07.

FISCAL POLICY The main thrust of the fiscal policy during 2007-08 would be on strengthening reforms in the tax system and tax administration to further broaden the tax base at the federal, provincial and district levels, improve tax compliance, and minimise tax evasion.

The main objective of the policy would be to allocate adequate resources for development activities, particularly for pro-poor expenditure, in conformity with the Fiscal Responsibility and Debt Limitation Act, 2005, to achieve the projected economic growth of above 7 percent, and reduce further unemployment and poverty and improve social indicators.

MONETARY POLICY The monetary expansion for the year 2007-08 would be in line with the projected GDP growth of 7.2 percent, and CPI inflation at 6.7 percent. The State Bank of Pakistan would continue to follow the tight monetary policy to curb inflationary pressures.

Sources said that concentrated efforts would be made by the government to bring it down during the fiscal year 2007-08 and beyond, adding that reduction in the rate of inflation would be achieved by tight monetary policy and increased supply of essential items.



-----------------------------------------------------------
N A D E E M M A L I K
CNBC PAKISTAN
BUREAU CHIEF
ISLAMABAD

0321-5117511

nadeem.malik@hotmail.com

16th Floor, Saudi Pak Tower, 61-A Jinnah Avenue, Islamabad. 051-2800113-14, Fax: 051-2800118

 



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Thursday, May 17, 2007

Abdullah Yousaf in NewsGuru on Tax Targets

Growth in dutiable imports -4 pct during first 3Q of FY07

 

Import of used cars decline

 

Total refund/rebates paid during July-March FY06 at 66.1 bln

 

Wapda/KESC major beneficiary of refund payments

 

Direct taxes show 56 pct growth during first 3Q of FY07

 

Banking, telecom and oil & gas sectors major direct tax contributors

 

Corporate sector share in gross income tax collect 73 pct

 

Voluntary compliance shows improvement

 

Share of WHT 45.9 pct in direct taxes

 

CVT on property transactions yields 1.6 bln rupee

 

WHT on cash withdrawals shows 84.8 pct growth

 

Doubling tax on stock transactions yields only 12 pct additional tax

 

16,782  Motorcars/jeeps imported during July-March FY07

 

Imports  of textile, construction machinery drops by 22-47 pct

 

 

 




-----------------------------------------------------------
N A D E E M M A L I K
CNBC PAKISTAN
BUREAU CHIEF
ISLAMABAD

0321-5117511

nadeem.malik@hotmail.com

16th Floor, Saudi Pak Tower, 61-A Jinnah Avenue, Islamabad. 051-2800113-14, Fax: 051-2800118

 



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Wednesday, May 16, 2007

Seven Year Scorecard of Musharraf


Seven Year Scorecard: Higher Growth, Lackluster Human Development, Deteriorating Governance    

 by Abid Hasan ( Former World Bank Advisor)

                                                

There is clear consensus that sustained growth is a sine quo non for poverty reduction, and growth can only be sustained through good governance, good institutions and good policies. When he took over power, President Musharaff rightly made these three pillars as cornerstone of his nation building agenda. So where does Pakistan stand, over seven years down the road. The scorecard is one of many successes and as many disappointments. The glass, empty then, is now half full but signs now emerging of emptying once again.

 

Outstanding Achievements

The President and his government have several internationally acclaimed achievements.

            From an economic and financial abyss in 1999, Pakistan today is on a different economic planet. All economic indicators are in the right direction. save a few now. The Prime Minister and his economic team must be credited with the phenomenal turnaround.

Opening up of the electronic media has led to  establishment of a robust watch dog and necessary pillar of a democratic society. Devolution and allocation of one-third of seats to women will have far reaching transformational impact, provided they are implemented in letter and spirit –bringing government closer to the people and giving women a greater say in public policy at  grass root level. The economic and social sector reforms initiated in Punjab have also been path breaking.

Banking reforms have moved the banking system from  state of bankruptcy and elite capture to a competitive and sound system. Doing business indicators and policy continuity  have improved. A spectacular achievement has been the telecommunication revolution .

Finally , the improvement in relations with India, the U turn on the flawed policy of supporting  Talibans, and improved relations with the rest of the world are noteworthy achievements.

 

Major Disappointments

 

Perhaps the most disappointing has been the feeble, if any, attempt towards establishing good governance—the bedrock for having a stable, prosperous and vibrant nation. There has been continued soft peddling on hard issues, preferring expediency over  nation building.

            There has been further 'personalization' of the constitution and weak conviction to its fundamental pillars and enforcing rule of law. No serious effort has been made towards establishing a stable, accountable and clean political system.  The political landscape is as bankrupt today, if not more, as it was when the military took over. Most political leaders and elected officials are widely perceived as having been compromised by the security apparatus. The slogan of eliminating "sham" democracy has remained a mere slogan.  Another disappointment has been the virtual abandonment of enlightened moderation path, as a result of soft peddling on spread of extremism, intolerance, and women rights.

            Other than improvements in a few federal agencies—central bank, CBR, audit and accounts— broad based institutional reforms have not been undertaken. Most public institutions -- education, health, justice, law and order, public health, --- which deliver services to the poor, continue to be weak and ineffective. Decision making continues to be personalized and  centralized. Implementation of National Anti-Corruption Strategy has been pathetic. As a result Pakistan's corruption ranking by Transparency International has deteriorated

 

During the six years since the first poverty reduction strategy was announced, there has been disappointing progress on improving living conditions for the majority. While there has been some reduction in income poverty, the continued high levels of poverty and rising inequality within regions and among people poses grave risks. The poverty strategy is not underpinned by conviction and commitment and its implementation has  been uninspiring, other than in Punjab.  KSE index is followed more seriously than MDG scorecard. There is more interest in Davos and less in fixing the drinking water in Dadu. There is more quality time given to FDI in real estate  and less in ensuring that service delivery institutions are indeed performing in poor areas. Overall, the focus of attention remains on activities benefiting the elite.

On the macro-economic front vulnerability is increasing due to rising trade and budget deficits, and a flawed growth and FDI strategy. 

No wonder, when all the above is taken together, Pakistan continues to be seen as a very vulnerable state by outsiders. One US think tank, whose Failed State Index is widely accepted as pretty robust, continues to list Pakistan as among the most vulnerable and potential failed state. In 2006 Pakistan was listed among the 10 most vulnerable. We may not like it but that's how outsiders view us.  This year's ratings have yet to come out, but Pakistan has further slipped on many of the criteria (eg writ of state, extremism, unequal regional developments, etc) underpinning the Index.

 

Putting Pakistan on Sustainable Path of Prosperity and Well being for All

 

Despite the many successes, the erosion and crumbling of several critical pillars of state will continue to make Pakistan lurch from one crisis to next, and sustaining growth will not be possible. Countries can grow for a few years with good economics and bad governance, but such growth will be short lived and rising prosperity for majority will remain elusive.

2007 is a watershed year for  Pakistan and the President. By embracing leaders of tomorrow, choosing the path less traveled , listening to voices of the real people rather then rent a crowds, and taking a few right steps, he could leave a  legacy that could transform Pakistan into a vibrant, prosperous and stable country. Alternatively if he chooses the path frequently traveled , follows the advise of  politicians of yesterday , Pakistan is destined to remain mired in poor governance.  In one case the President could go down in history as a Mandela and break the 60 year curse where every President/PM exited unceremoniously. In the other he will certainly join the club of  Mobarek and Mugabe, and likely to be hounded out of office.  One would certainly hope that he would choose to be in company of Mandela, and in the coming months take the following  courageous steps to permanently enshrine  good governance and pro-poor development.

 

Critical good governance initiatives are following .  First, restoration of the 1973 constitution, while protecting devolution and enhancing provincial autonomy. Second, steps to transform the political system by holding free and fair elections and introducing mechanisms which yield  best possible results in terms of integrity and public service commitment of  legislators. Three actions are critical. A strong and independent Election Commission and a transparent pre-screening (months ahead of the election) by the Commission to allow only those to contest who meet, in letter and spirit, the criteria laid down in existing election law. A transparent and independently conducted prescreening ( not like EBDO) would ensure that the pool of contestants are men and women of integrity and probity—whose life styles and asset holdings  are consistent with their tax returns, who are neither tax dodgers nor loan defaulters, and who have not benefited from abuse of office.  Two term limits for all elected offices to ensure continuous infusion of new blood. Out of  box electoral reforms are needed to make a clean break from the past,  reestablish the credibility and integrity  of the political system in the eyes of the people, and minimize  sham democracy and  capture by the traditional corrupted forces.

Third, develop a national consensus and remedial measures to reduce extremism and intolerance.  Fourth , return  the military back to its core mission and legally prohibit political activities by  the security apparatus

Fifth initiate fundamental institutional reforms focusing on following: (i) key public institutions delivering education, health, public health  and police (ii) making NAB fully independent, impartial  and stronger( iii)  in collaboration with the judiciary ( once the crisis is over), initiate program to establishing a strong and independent judiciary  and accelerate self-cleansing so that all   judges  fully meet the integrity and competence standards expected of them.

In respect of good economics, the following are urgent. First implementing the poverty reduction and MDG strategy on a war footing, with passion and real commitment so that majority does indeed see a difference in their health, education and living standards. This would require strengthening district governments and providing  Nazims with a team of the best and the brightest Pakistanis ( from within and outside the civil service) to assist in implementation of the strategy. This team should be selected through a transparent process and provided the necessary resources, incentives and autonomy to effectively implement district based strategies. Second the growth and FDI strategy needs to be revisited to address  emerging vulnerabilities. Exports need to be accelerated, non-export FDI should be allowed very selectively until trade gap is narrowed, tax base expanded and public investment decision making made more rigorous and transparent. Third, are  constitutional and NFC reforms supported by pro-poor public investment programs, to proactively overcome the deep sense of deprivation among  smaller provinces.

 

Without bold steps in improving governance, strengthening  service delivery institutions  and re-orienting economic  strategy, Pakistan will continue to be a vulnerable state and majority of its people will remain mired in poverty and deprivation. The steps suggested above will ensure that Pakistan will be transformed and put on the sustainable path of prosperity and well being for all its citizens.

 

 

 

 

 



-----------------------------------------------------------
N A D E E M M A L I K
CNBC PAKISTAN
BUREAU CHIEF
ISLAMABAD

0321-5117511

nadeem.malik@hotmail.com

16th Floor, Saudi Pak Tower, 61-A Jinnah Avenue, Islamabad. 051-2800113-14, Fax: 051-2800118

 



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Friday, May 11, 2007

Dr. Salman Shah in NewsGuru of CNBC Pakistan

Dr. Salman Shah in NewsGuru of CNBC Pakistan

May 10, 2007

 

ISLAMABAD: Budget for FY08 to be announced on June 9- Dr. Salman Shah

 

ISLAMABAD: Taxes on stocks to be consolidated in budget- Dr. Salman Shah

 

ISLAMABAD: Budget to offer new incentives for listing of companies, IPOs, depreciation allowance, tax credits and for raising capital from markets- Dr. Shah

 

ISLAMABAD: Total budgetary outlay for FY08 to be 2 trillion rupee- Dr. Salman Shah

 

ISLAMABAD: Tax target is likely to be around one trillion rupee for FY08- Dr. Salman Shah

 

ISLAMABAD: Government to revise property laws, commercial fee structure- Dr. Salman Shah

 

ISLAMABAD: Salaries and pensions to be increased- Dr. Salman Shah

 

ISLAMABAD: Power sector subsidies of 100 bln rupee to be phased out- Dr. Salman Shah

 

ISLAMABAD: Exports to be zero rated- Dr. Salman Shah

 

ISLAMABAD: New measures for voluntary pensions in the offing- Dr. Salman Shah

 

ISLAMABAD: Budget to incorporate plans for setting up holding companies- Dr. Shah

 

ISLAMABAD: Budget FY08 sets inflation atrget at 6.5 pct and fiscal deficit at 4 pct- Dr. Shah

 




-----------------------------------------------------------
N A D E E M M A L I K
CNBC PAKISTAN
BUREAU CHIEF
ISLAMABAD

0321-5117511

nadeem.malik@hotmail.com

16th Floor, Saudi Pak Tower, 61-A Jinnah Avenue, Islamabad. 051-2800113-14, Fax: 051-2800118

 



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Monday, May 07, 2007

NIT Privatisation Issues

Referring to reports carried in a section of the press quoting speeches of Members of the Opposition in the National

Assembly in which they had expressed apprehensions regarding the privatisation of NITL, a spokesman of the Privatisation

Commission stated that the transaction was proceeding on track in a transparent manner as per prescribed procedures.

 

2.                   He explained that the proposed NITL privatisation was a complex transaction which has been in progress for a number of years. Issues relating to the Letter of Comfort holders, pre-qualification of bidders and timing of the transaction etc. are under active discussion / consideration in consultation with concerned Ministries and are expected to be resolved soon, where-after final date of bidding would be announced. 

 

3.                   The spokesman further clarified that according to the approved transaction structure, 47.75% of total NITL units (i.e. the units not covered by the Letters of Comfort issued by the Ministry of Finance) would be divided into 3 equal parts and management rights of each part sold to three different parties at the highest bid price.   Hence no one party could purchase management rights to more than 16% holding.

 

4.                   In view of the large number of parties which had expressed interest in the transaction and which had attended the pre-bid meeting on 24th April, 2007, the Privatisation Commission expected very competitive bidding.

 

5.                   The spokesman further stated that the National Assembly Standing Committee on Privatisation & Investment was kept fully apprised and provided with complete details of all transactions in which they had indicated interest. Apart from one meeting which was postponed due to absence of the Privatisation Minister on official tour abroad, no meeting was postponed at the instance of the Privatisation Commission.   


-----------------------------------------------------------
N A D E E M M A L I K
CNBC PAKISTAN
BUREAU CHIEF
ISLAMABAD

0321-5117511

nadeem.malik@hotmail.com

16th Floor, Saudi Pak Tower, 61-A Jinnah Avenue, Islamabad. 051-2800113-14, Fax: 051-2800118

 



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