POLICY

 

Nov 25  - Dec 01 , 2002

 

1.INTERNATIONAL

2. INDUSTRY

3. FINANCE

4. POLICY

5. TRADE

6. GULF

 

JAMALI ELECTED PM

Mir Zafarullah Khan Jamali of the Pakistan Muslim League-Q was elected Leader of the House by the new National Assembly and he vowed to seek harmony with his political opponents to run his new civilian administration.

 

But the 342-seat lower house of parliament voted Jamali by the barest of majority that will force him to walk on a tight rope in keeping his multi-party coalition together while sharing power with President Pervez Musharraf.

Jamali, a former chief minister of Balochistan, got 172 votes out of 329 votes cast, against 86 bagged by Maulana Fazlur Rehman of the Muttahida Majlis-i-Amal (MMA) and 70 by Shah Mahmood Qureshi of the People's Party Parliamentarians (PPP).

The PPP, which came second with 81 votes, was damaged when 10 of its members went over to the PML-Q at the risk of being unseated after the anti-defection clauses of the partially revived Constitution are restored and the 60-seat MMA was bolstered by support from the 19-seat PML-N and some smaller groups.

"Consultation is necessary in most matters and God-willing I will move ahead by taking various parties, including the PPP and MMA, into confidence," Jamali told the House in a brief post- election speech.

"There will be no fake cases instituted by me against anyone, no dossiers will be opened and nobody will be harassed," he said amid cheers and added: "I hope they will also not harass me."

"We all have to work together," Jamali said as he referred to the issue of internal security in Pakistan, which is a key ally in the US-led war against terrorism.

THIN MAJORITY FOR CONTINUITY, REFORMS

The National Assembly has elected a leader of the house (prime minister-elect) who has vowed to continue reforms and policies pursued by President General Pervez Musharraf.

For the time being, it would help sustain business confidence.

In a media interview earlier this week, the prime minister-elect Zafarullah Jamali said that "continuity is the name of the game for any government. The governments change but the basic policies do not change." But when the time comes for any change, whenever it is needed, the parliament will be taken into confidence, he added.

The consistency in policies, a long time demand of trade and industry, sustained by outgoing government, is planned to be reinforced by retaining at least two members of the President's economic managers' team: Finance Minister Shaukat Aziz and Dr. Ishrat Husain. The governor of the State Bank has got another term of three years. He was due to retire in December.

RETURN ON NSS TO FALL IN JANUARY

The government has so far not decided the new coupon rates of 10-year Pakistan Investment Bonds which serves as a benchmark for return on National Saving Schemes. But one thing is clear: The coupon rates of PIBs of not only 10-year but of other maturities will fall in the wake of the 1.5 per cent cut in the State Bank discount rate. And in turn the return on defence saving certificates/special saving certificates and other modes of national saving scheme will also fall.

The market knows this. It is eager only to know the extent to which the rates will fall. The government had last revised the coupon rates of PIBs in end-February this year. The rates were fixed at 9 per cent for three-year; 10 per cent for five-year and 11 per cent for 10-year bonds. The rates of return on national saving schemes were last cut by 2.5 per cent in July. Next revision is due in January 2003.

'STABILITY KEY TO ATTRACTING INVESTMENT'

Political and economic stability and an improved law and order situation will help attract a lot of investment.

This was stated by Tetra Pak Pakistan managing director Lars Norrman while talking to reporters after a function held to mark the sale of one billion tetra packs. However, Mr Norrman said, despite violent incidents that took place in Islamabad, Karachi and elsewhere in the country, it was not bad working in Pakistan. "We feel safe here as Pakistanis are very friendly and offer fantastic cooperation."

SOFTWARE USERS ASKED TO GET LICENCE

The Business Software Alliance (BSA) has warned all the companies to get their software licensed by December 10, otherwise legal action will be initiated against the infringers of the copyright law.

"BSA has halted its enforcement activity in Pakistan and given the users and sellers of pirated software 30-day period to become legally compliant," BSA director (Middle East) Al Redha told a seminar.

QATAR-TO-PAKISTAN GAS PIPELINE

Pakistan resumed talks on a "Gas Sales and Purchase Agreement" with Crescent Petroleum of Sharjah for the import of natural gas from Qatar as Crescent said it was no more interested in gas sales to India.

Both sides separately told that "progress" was made in the talks on the draft GSPA of Gulf-South Asia (GUSA) Pipeline Project that was submitted to the government of Pakistan by Crescent Petroleum last year.

NO NEED OF FRESH IMF AID, SAYS ISHRAT

Pakistan won't need fresh aid from the International Monetary Fund after the current programme ends in 2004, thanks to a surge in remittances and debt rescheduling , the State Bank Governor Ishrat Hussain said.

The rise in foreign exchange reserves toward $9 billion a record for Pakistan has enabled the country to have "a very comfortable external liquidity position," he added.

The current three-year $1.3 billion IMF lending programme began in December last year and is slated to end by December 2004.