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Apr 23 - 29, 2001

Rescheduling of loans essential for uplift

The chief executive, Gen Pervez Musharraf, on Thursday indicated that Pakistan would soon be approaching the World Bank to seek rescheduling of its outstanding loans to get some "breathing space" for at least three years, and spare funds for development.

He believed that in three to four years, Pakistan would be able to beat its debt servicing liability and get out of the debt trap.

The CE said this while inaugurating the National University of Computer and Emerging Sciences, set up by the Foundation for Advancement of Science and Technology (FAST).

Pakistan at present, said Gen Musharraf, was at the crossroads of its history and destiny as all resources were consumed by debt-servicing and defence, leaving little for development. No development project, he stated, could be launched without getting more foreign loans and more loans meant adding to the already huge debt burden.

Describing it as a catch-22 situation, the CE said the solution lay in economic revival that would be possible only with augmented emphasis on the promotion of information technology and agriculture.

He said that though the rulers in the past 12 years had increased the loan liabilities by some $24 billion, the amount was not invested in sectors which could put the country on way to progress. Had the previous governments utilized the money on right projects, Pakistan would not have been caught in the debt trap as it was finding itself now.

The approach about foreign loans, Gen Musharraf said, needed a change to rid the country of the burden of loans and initiate development activities.

The CE said that at present Pakistan was earning about $30 million from the Information Technology and the government was determined to increase the earning target by 3,500 per cent.

Co-operation with Iraq in oil sector discussed

Federal Minister for Petroleum and Natural Resources, Usman Aminuddin, has said that Pakistan-Iraq co-operation in oil and gas sector will further enhance the existing bonds of brotherhood and fraternity between the two Muslim countries for mutual benefit.

The minister was talking to a seven-member team of Iraqi petroleum engineers which called on him on Wednesday. The Iraqi team arrived this morning for an 8-week training in various petroleum fields.

Welcoming the team the minister said that Pakistan would be providing training to the Iraqi engineers in pursuance of the memorandum of understanding (MoU) signed during his visit to Iraq in July last year. The training would be given in different disciplines of petroleum sector, including reservoir management, refining, pipelines, gas fields technologies, well-logging and drilling.

ADB to provide $200mn drought assistance

The Asian Development Bank is considering assistance of over $200 million for Pakistan in the wake of recent drought. "We have sympathy with the government of Pakistan and are holding consultations in this respect," the bank's senior economic advisor, Naved Hamid, told newsmen at a press briefing on Thursday.

In this regard, he said, an ADB mission would arrive in two weeks to hold talks. Naved Hamid said the assistance would include around $120 million from the bank's resource in Pakistan and around $90 million to be reallocated under the Social Action Programme for health and education facilities.

SECP blamed for turmoil in insurance sector

Turmoil grips the more than Rs10 billion annual general insurance business in the country in which countless number of bogus companies have emerged. Automobile leasing has, also forced the big and established companies to join the race of cut-throat competition and bring down tariff rates to unbelievably low levels.

Insurance operators blame the Security and Exchange Commission of Pakistan (SECP) for the anarchy that prevails in this business. The SECP has been assigned the role of insurance business Regulator under the new Insurance Ordinance 2000, promulgated in August 2000.

NWFP to dispose of surplus land

The NWFP cabinet has decided to dispose of surplus state lands owned by all the departments of the provincial government. Sources told that the cabinet, which met on Wednesday with the provincial governor, Syed Iftikhar Hussain Shah in the chair, asked for conducting a survey for determining the future requirements of all the departments and for the purpose of welfare projects.

Oil ministry appoints consultant

The Ministry of Petroleum and Natural Resources has appointed a legal consultant for finalizing the Implementation Agreement of the White Oil Pipeline Line Project.

An official announcement said that the Ministry of Petroleum & Natural Resources and its consultant were making best efforts for finalizing the agreement in consultation with PARCO and legal advisors as soon as possible.

Crescent Textile

Spearheading the financial restructuring of its associated company, Crescent Textile Mills proposes to make new investments and swap short term advances for long term loans all of which would aggregate to an investment of well over Rs1 billion in the associated company.

PCB starts repaying depositors

Prudential Commercial Bank on Tuesday gave a go-ahead to its depositors to withdraw money from their accounts if the balance is Rs100,000 or less than that. But confusion persisted, as the branches were not clear on how much withdrawal should be allowed in the first phase. The State Bank on Monday had eased off the 180 day moratorium placed on the bank on March 19 and allowed PCB to restore operations in all deposit accounts having balances up to Rs100,000 in two phases.

T3 system

All the three stock exchanges of Pakistan will introduce the T+3 system of clearance and settlement of sale/purchase of stock shares on April 30, according to a reliable source.