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POLICY

May 20 -June 02, 2002

PAKISTAN, INDIA CLOSE TO WAR, SAYS MUSHARRAF

Describing the situation on Pakistan's eastern borders as "grim," President Gen Pervez Musharraf said on Wednesday that Pakistan and India were closer to war than they had been at any time since the Dec 13 attack on the Indian parliament.

The aggressive Indian rhetoric, said the president, had come in the wake of complete operational capability on the part of India which was why it could no longer be dismissed as mere rhetoric. However, he added, Pakistan armed forces were fully prepared to meet any threat and were capable of matching all forms of Indian aggression.

President Musharraf was speaking at a meeting with editors and senior journalists in the morning. Soon after the meeting, he went into a closed door joint session of his cabinet and the National Security Council.

Moving on to the national political scene, he said it was because of the tense border situation that he had decided to invite all political parties for a consultative meeting.

He said he was dismayed by the refusal of the ARD (Alliance for Restoration of Democracy) and the MMA (Muttahida Majlis-i-Amal) to attend the all parties meeting he had called because it was a genuine initiative given that he was least interested in retaining power after the October elections. "In fact," he said, "I now want to shed power. I wish there was an elected prime minister to take the crucial decisions that need to be taken at this juncture."

Explaining his concept of power, he said he wanted to shed the powers of the chief executive which ought to rest entirely with the prime minister. Musharraf said he was least interested in a figurehead prime minister and wanted a premier who wielded complete power to govern. However, he added, the setup he wanted to create would revolve around a system of checks and balances in which no one the Prime Minister, the President or the Chief of Army Staff could act arbitrarily.

EU SIGNS 50M EURO ASSISTANCE ACCORD

The European Union (EU) Commissioner for External Relations Chris Patten has said that he is visiting Pakistan and India to assess the security situation in the region.

"In the next couple of days, I will be talking on regional issues both geographical and diplomatic directions," he further stated.

Speaking at a joint news conference with Finance Minister Shaukat Aziz after having signed 50 million euro grant for Pakistan, he said on Wednesday that he would also visit Afghanistan during his current trip to the region. He said issues concerning the United Nations Security Council's 1373 resolution against terrorism, which both Pakistan and EU had signed, would come up for discussion.

When asked how did he see the increasing tension in the region with special reference to massive Indian military build-up on Pakistan's borders, Patten said he still had to discuss these issues in Islamabad and New Delhi.

He said that matters pertaining to "democratic accountability" and increasing trade and economic cooperation between EU and Pakistan would also be discussed.

RS219 BILLION HUMAN UPLIFT PLAN FINALIZED

The federal government has finalized a Rs219 billion three-year human development program (2002-4). The Khushhal Pakistan Program (KPP) will get the biggest share (30 per cent), followed by education (26 per cent) , health (17 per cent) and women development (three per cent).

According to the details made available to on Monday, out of Rs110 billion, Rs30 billion has been earmarked for the current financial year, while Rs32 billion for 2002-03 billion and Rs38 billion for 2003-4 will be made available under the federal and provincial public sector development programs (PSDPs).

A financing gap of about Rs105 billion, including Rs1.4 billion in 2001-2002, Rs46 billion in 2002-3 and Rs55 billion in 2003-4, will be bridged by the international donor agencies, specially the World Bank and the Asian Development Bank.

STOCKS OFFER BEST YIELDS IN TIMES OF CRISIS

Never mind the steep decline of 300 points in four sessions, stock brokers and analysts beckon the brave to defy the 'herd mentality' and seize the stocks as they offer attractive valuations.

Humaira Zaheer, analyst at IP Securities says that in their list of core stocks, Hubco took the top position based on dividend yield. Hubco was trading on Tuesday at Rs20.75 while the expected full year dividend for the company was Rs8 per share, which translated into a dividend yield of 39 per cent.

EOIS FOR POL INVITED

The Privatization Commission on Tuesday invited Expressions of Interest (EoIs) from potential bidders for disinvesting the government's 26 per cent shareholding in Pakistan Oilfields Limited (POL) through a block sale process.

For acquiring a minimum lot of 26 per cent (approximately 21.35 million government of Pakistan owned shares), the prospective bidders have been asked to submit their EoIs latest by June 15, 2002, along with required non-refundable processing fee. Parties submitting EoIs, will be provided with Instructions to Bidders (ITB) and further information about the company.

ISLAMABAD RECALLS HC FROM DELHI

The Pakistan High Commissioner in New Delhi, Ashraf Jahangir Qazi, was recalled by the government on the demand of the Indian government on Saturday.

The Indian demand came only a day after its parliament adopted a unanimous resolution, criticizing Pakistan for its support to alleged cross-border militancy which Islamabad has consistently denied.

POL PRICE HIKE FLAYED

The Chairman, Pakistan Petroleum Dealers Association (PPDA), Abdul Sami Khan has criticized the increase in petroleum prices by the Oil Companies Advisory Committee (OCAC) on May 15 by 0.63 to 17 per cent.