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Feb 19 - 25, 2001

World Bank team coming to investigate SAP scam

The World Bank's Corruption and Fraud Investigation Unit (CFIU) is arriving in Pakistan to investigate alleged $400 million (Rs20 billion) embezzlement in the Social Action Programme (SAP-II) , an authoritative source told.

The CFIU and officials from Bank's Institutional Integrity Department will conduct investigations in collaboration with the National Accountability Bureau (NAB) and Auditor General of Pakistan.

It will also review official documents and verify assets in all the four provinces and the federal capital territory under SAP-II.

The source said the government has agreed to cooperate with the CFIU after a lot of reluctance and only after World Bank named it as "Field & Integrity Assurance Mission."

The source said that the CFIU team comprised of two British and two Pakistan nationals besides a Canadian.

The CFIU will examine Auditor General's observations (audit reports) which had pin-pointed the fraud and corruption in the Social Action Plan.

Earlier, sources said, acting Country Director Pakistan and Afghanistan South Asia Region, Abid Hasan, through a letter had informed the Finance Ministry that the mission would be headed by Mr Terence Matthews (British national), head of investigation/ operations and include Mohammad Ashraf, procurement adviser (a Pakistani national), Peter Dent, senior forensic accountant (Canadian) and Duncan Smith, lawyer/ investigator (British) for conducting the entire operation.

Mr Arif Yaqub, World Bank's senior financial management specialist at Islamabad office, will also be a member of the team and coordinate the programme.

The Unit was set up in 1997 on the initiative of Mr James Wolfenson, President of the Bank, to "abate fraud and corruption" under the bank-supported operations.

Shortfall needs to be rectified, says ADB

The Asian Development Bank (ADB) has said a shortfall of Rs11 billion in revenue collection and $500 million in export proceeds in Pakistan in the first six months of the fiscal year needs to be "rectified".

"While the reform measures reflect the government's commitment to maintain macroeconomic stability, accelerate economic growth and reduce the incidence of relative poverty, it is necessary for the government to stay on the course and as an example recent shortfalls in revenue collection and export proceeds would need to be rectified," the ADB said in a recent report on "Latest Political and Economic Development and ADB Operation in Pakistan".

It said that due to shortfalls in revenue and export targets, Pakistan's current account balance is "under stress".

Businessmen to get benefit of reforms: CE

The Chief Executive, General Pervez Musharraf on Thursday assured a group of Pakistani industrialists and businessmen that the government will put in place a sound mechanism that will ensure continuity of all the economic reforms targeted to boost investment and increase exports.

These reforms have been introduced in the national interest which will always rein supreme, he said and asked the businessmen to have no apprehension on that account.

Referring to the clean and healthy environment created by the government, General Pervez Musharraf invited Pakistani businessmen to come forward and take full advantage of the business friendly policies of the government.

The strategic objective of the government and the businessmen is the same, he observed and said that the two should work in harmony to bring progress and prosperity to the country.

'Reshaped NFC soon'

The federal government has decided to restructure the National Finance Commission and revise its award. Discussions in this respect would soon be initiated, stated Sindh Finance Minister Dr Abdul Hafeez Shaikh.

In an interview with PPI on Thursday, the minister said, each province would be represented by its finance minister with another member to be nominated by the respective provincial government.

Sindh government has already suggested the name of Dr Abdullah J.Memon to represent the province in the commission, he said.

EAB to focus on economic revival

The two-day seventh meeting of the Economic Advisory Board (EAB) began on Thursday under the chairmanship of the finance minister.

In his opening remarks, the finance minister said the primary focus of board's deliberations would be on the measures to be adopted for accelerating the process of economic revival during the current year.

The minister, while appreciating the work done by the EAB towards the finalization of government's economic revival programme, underlined the need for evolving a forward-looking strategy while taking full cognizance of the achievements made during the last year.

Leasing business to get a boost

The government has agreed to extend the first year/re-investment allowance to leasing companies in lieu of depreciation allowance of 40 per cent, which lapsed on June 30, 2000.

Sources said the proposal would be presented to the Cabinet very soon for approval to provide a boost to investment in machinery and equipment, through the lease finance.

Other measures are also being stipulated to strengthen leasing sector as officials feel that industry has a future. Last week, the governor of State Bank Dr Ishrat Husain and SECP Chairman Khalid Mirza held a meeting at the SBP to discuss measures to promote leasing and modaraba sector.

Romanian machinery offered

A Romania-based Universal Tractors manufacturing group has offered its agricultural machinery to Pakistan on experimental basis for their demonstration in the different parts of the country to assess feasibility for local use.

This offer was made by a three-member delegation of Romania, headed by president of Universal Tractors Marinara Coastea, which visited Agricultural Development Bank of Pakistan and met its chairman Feroz Bashir Ansari on Friday.