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Oct 23 - 29, 2000

Shaukat seeks help to meet IMF terms

Finance Minister Shaukat Aziz informed the corps commanders' conference at Rawalpindi on Thursday that though the country's economic indicators were showing improvement, talks with the IMF might face difficulties over non-economic issues.

Invited to brief the conference on the economic and financial situation after one year of the military rule, the minister is reported to have explained that his ministry had no answer to questions being asked by the IMF for a bailout package to Pakistan.

Mr Aziz is said to have asked the government high-ups to "devise" an answer to this situation. Giving details on the spending and receipt situation, and the expansion in tax net through tax survey, the minister said none of the indicators reflected an alarming situation.

However, he explained, the country was in dire need of finances to meet the "liabilities" which, in the present situation of cash inflow, were proving harder and harder.

The list of the liabilities, he said, topped debt-servicing which, if carried out according to the schedule, left no room for meeting other public finance requirements.

In such a situation, the minister said, the country either needed to enter an agreement with the IMF on conditions being attached to the bailout package, or go all out for a contingency plan. Efforts to raise cash under a contingency plan could only result in Pakistan accepting harsh commercial mark-up rates.

Such rates, he is said to have explained, would have to be accepted in case Pakistan did not opt for accepting the IMF conditions attached to its soft-mark-up, long-term loan.

None of the finance ministry failures were contributing to the situation emerging from the low cash inflow, he is said to have explained.

The federal revenue receipts of Rs80 billion in the first quarter of fiscal 2000-2001 registered a 10 per cent increase over the period last year. The remittances from abroad in July-August at $250 million were almost twice the amount received last year.

Germany requires 75,000 IT experts

Germany has started recruiting IT experts in web-designing, e-commerce, networking, programming, software and hardware.

"Germany needs 75,000 IT experts in next two to three years," Rudolf W. Fritz, managing director of the Central Placement Office, International Department of the Federal Employment Services, said at a press conference on Thursday.

He said the Central Placement Office had entered into an agreement with the Karachi-based Manpower Export Placement Corporation for the recruitment of IT experts.

He said a pre-requisite for such recruitment was that an applicant should either be a Bachelor degree holder in computer sciences or a highly experienced professional having experience of six to ten years even if he held any degree or a diploma certificate or no degree at all.

He said that the working contract for recruited applicants would be a minimum of DM 100,000 per annum which would be subject to 35 per cent taxation.

Offshore oil exploration policy okayed

The cabinet on Wednesday approved an "offshore petroleum exploration and production policy package and model production sharing agreement" to attract foreign investors.

Under the new package the previously designated deep-water zone has been redefined and divided into deep and ultra deep- water zones.

The meeting decided to rename the Micro Finance Bank as "Khushhali Bank".

Reviewing a CBR report on measures for controlling smuggling, the cabinet decided to retain dry ports in the country. Dry ports, it was observed, had not only facilitated importers and exporters but also helped generate economic activities. It, however, directed the CBR to ensure a clean and transparent functioning of these ports.

20% duty on smuggled goods

The interior ministry has rejected a proposal of the Central Board of Revenue to levy 20 per cent tax on smuggled goods and asked for imposing only a 10 per cent duty for one-time clearance of these goods.

The CBR proposal was initially sought by the ministry for curbing the sale of smuggled goods throughout the country. The failure of shutter tax to stamp out the Bara markets has prompted another scheme for smuggled items.

The CBR has been insisting that the duty rate should be 20 per cent and the interior ministry deemed it "too harsh". The CBR proposed that a follow-up action should be taken in the post- clearance period which was also unacceptable to the ministry, they said.

The ministry insists that the CBR should extract at least Rs25 billion from this levy whereas the CBR says that there would be no more than Rs4 billion deposits from the scheme even by levying 20 per cent duty.

Utility Stores Corporation

Utility Stores Corporation had submitted to the federal government, a 5-year action plan for the recovery of its losses of around Rs360 million and also for overcoming its running deficit of Rs6 million per month.

Sixty per cent of losses, said USC Managing Director, Brigadier (Retd) Zahoor Ahmed on Wednesday, had been incurred on account of operations undertaken by the corporation under government orders, including payment of subsidy on sugar.

Dr Shafqat Ali Jamote quits

Federal Agriculture Minister Dr Shafqat Ali Shah Jamote relinquished the charge of his office on Tuesday. Mr Jamote is the second minister from Sindh to resign from the military government in the last few days. The first was former Information Minister Javed Jabbar.

Policy for pulses okayed

The federal government has approved a new policy for the import substitution of pulses, under which the official land lying unused in the country will be allotted to the private sector companies and farmers on lease.

Officials sources told on Wednesday that the new policy was approved by the Economic Coordination Committee (ECC), which met on Tuesday with Finance Minister Shaukat Aziz in the chair.