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Nov 29, 1999

  1. International
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Govt wants cut in interest rates

Finance Minister Shaukat Aziz on Wednesday said the government wants to slash bank interest rates for making low-cost credit available (to the industry to accelerate economic recovery.)

Speaking to reporters, he said interest rates could not be brought down by making laws or issuing orders. "The rates are determined by the market forces. The government is nevertheless making effort to create an enabling environment (for banks) to cut down the rates. The central bank will also play its due role. The availability of credit at low cost is high priority for the government."

Aziz, a Citibanker, said the government will itself be biggest beneficiary of low interest rates "because it is largest borrower of credit from banks". "The government will be able to reduce its deficit and also avoid resorting to new taxation by saving money it is forced to pay in interest on its (domestic) borrowings," he said.

He agreed that the previous government had tried to bring down interest rates and succeeded in doing so to some extent. However, he believed, there is still some room to slash the rates further.

The minister, who was on his first visit to the Punjab capital since taking over charge of the economy, addressed businessmen as well as big farmers in separate meetings earlier in the day.

He told businessmen at the LSE and the LCCI that he also wants to do away with wealth tax because it is a "regressive" levy. But the government will have to find some alternate resources to make up for the loss of revenue in case of abolition of wealth tax. In addition to this, the government would not like to create am impression (in the masses) that "prosperous sections of society are being given further relief".

Aziz said the governunent is considering to effect wide-ranging tax reforms in the country as well as broaden tax base and remove anomalies in the existing tax laws.

Disclose names of exporters

The State Bank has asked the banks to disclose the names of the exporters who are not bringing in their export earnings on time so that it can initiate action against them.

The SBP on Tuesday issued a letter to all banks instructing them to provide details of the cases of delay in receipt of export earnings. The SBP also sought details about the exporters who fail to sell on time their foreign exchange earnings in the interbank market. Exporters are supposed to bring in export earnings on due time—the time stipulated in their export documents—or within four months at best. Once their export earnings come in, they are supposed to convert the same into rupees in the inter-bank market at a floating exchange rate.

Arif Habib elected KSE chief

Arif Habib stood elected unopposed as the chairman of the Karachi Stock Exchange for the year 2000, as no other member filed nomination papers by the closing time. Arif Habib (46) would head the Karachi bourse for the fifth time; his previous tenures as the President of the Exchange being 1992; 1993; 1996 and 1997.

Brokerage on raw cotton export raised

The State Bank on Saturday allowed exporters of raw cotton to pay a maximum commission or brokerage of 2 per cent to foreign buyers instead of 1 per cent.

An SBP circular (F. E. 28) issued to all the banks dealing in foreign exchange said the increase would remain effective "till further orders." The circular sharpened the division between raw cotton exporters and textile millers.

Intel holds seminar

Intel Pakistan held a seminar on "Power for the future direction in enterprise computing".

Keith Holthman, Architecture Marketing Manager Intel Asia highlighted the role of Intel technologies in the changing business environment especially the Intel Architecture based servers, which tightly integrate key business systems, seamlessly link all business partners at cost-effective prices and steer customers businessmen to take advantage of what's ahead.

National Power gets ISO-9002 certification

The Country Manager, Lloyd Register Quality Assurance, Q.M. Rizki awarded ISO-9002 certificate to the Station Manager National Power Ian Coupland.

The certificate covers operation and maintenance of power generation plant and auxiliary equipment. It includes the provision for fire brigade and occupational health at Hub Power Station.

Railway Board merged into ministry

The Pakistan Railway Board is learnt to have been abolished as a policy-making body and merged into the Ministry of Railways. It has been replaced by an organization with the same nomenclature which, railway officers believe, will merely be consultative in nature.

The decision is understood to have been taken in an overall review of the railways privatization plan which has sufficiently been rolled back and which envisages restoring unity of command at all levels of the organization's operational activity.

The new 15-member board will be constituted after the federal cabinet approves it along with the new policy on the Pakistan Railways.

The board was set up in 1959 under an ordinance to take policy decisions and execute them. But it became functional when the federal government transferred its executive powers to this body through a presidential order in 1962. The abolition of the railway board means that the federal government has, through the ministry, reassumed powers to take policy decisions.

Wapda's financial restructuring plan

Federal Finance Minister Shaukat Aziz appreciated Wapda's efforts for strengthening this national institution which he said was, 'moving in the right direction.'

He was presiding at a high-level meeting here at Wapda House on Thursday. It was his first visit to Wapda House after taking over charge of Finance Ministry.

The federal finance minister, who spent more than six hours in Wapda House, discussed the financial restructuring plan of Wapda, financing for various development programmes including Ghazi Barotha Hydropower Project, Chashma Hydropower Project, National Drainage Programme and Power Sector Development.