US pledges $1 billion debt relief

President George Bush announced on Wednesday an economic package for Pakistan, including a proposal to Congress for $1 billion in debt relief, additional $100 million for education and $142 million in increased market access for Pakistani apparel exports.

This is the first substantive outcome of Pakistan's pledge of support for the United States-led coalition since the Sept-11 attacks and comes as the culmination of President Gen Pervez Musharraf's first official working visit to Washington which ended on Thursday.

But the $1 billion debt write-off out of a total Pakistani bilateral debt of $2.8 billion is conditional on legislative approval, and the chairman of the powerful Senate Foreign Relations Committee, Mr Joseph Biden, has outlined tough caveats, including genuinely fair elections and reducing tensions with India.

Talking to reporters after meeting President Musharraf on Capitol Hill, Mr Biden said: "I and my colleagues on the committee are committed to significant debt relief in the order of one billion dollars for Pakistan this year as well as opening discussions about the way in which we can increase exports to the United States."

Support was real and broad both within the administration and in Congress, Mr Biden added, but was also "premised upon three things: one, genuine, fair, open elections in October; secondly, assuming that he (Musharraf) will continue to be committed in dealing with eradicating extremists in Pakistan and cooperating with us on terrorists who may be infiltrating into and out of Pakistan; and, thirdly, de-escalate the situation on the borders with India.

"We want good faith efforts on all fronts being pursued by Mr Musharraf. We now believe that is the case."

Discussing the US assistance programme announced by the White House shortly after the Musharraf-Bush meeting on Wednesday, Finance Minister Shaukat Aziz told a press briefing in the evening that the package would further enhance Pakistan's credibility on the international market and could possibly expand further.

SME Bank working on Islamic system

President, Small and Medium Enterprise (SME) Bank, Kaiser H. Naseem, has said the bank is in the process of developing Islamic instruments and hopefully it will start functioning after July next.

He was responding to a query from a businessman at the meeting of Karachi Chamber of Commerce and Industry (KCCI) on Saturday.

Under a Supreme Court verdict, Pakistan is bound to transform its financial system into the one conforming to the Islamic law before July this year, he said.

On financing, he said that the bank would not provide any loan to the SME unless their targets were aimed at diversifying country's economic development and value addition in exports.

HBL earmarks Rs1bn forex for SMEs

Habib Bank Ltd (HBL) has allocated foreign exchange of Rs2.5 billion to facilitate exporters, out of which Rs1 billion has been earmarked for the small and medium enterprises, said Zakir Mehmood, president HBL.

Addressing the members of All Pakistan Cloth Exporters Association (APCEA) on Monday, he said the Bank was already providing the finance facility in terms of dollars, and in this connection 21 HBL branches are authorized to deal with small and medium industrial units.

He said that cotton and textile industry is the mainstay of national economy which is going to gain further importance in the new global environment. He said that HBL has invested Rs45 billion in textile sector and its finance risk has also increased manifold. However, in spite of the risk factor, the HBL will continue to extend loan to textile sector in view of its growing importance but with extra vigilance and care.

Washington to revive defence ties

US Secretary of Defence Donald Rumsfeld indicated that Washington would resume long-lasting military-to-military "strategic relationship" with Islamabad based on discussions the Pakistani president had had at the White House.

Speaking at a press conference following Gen Musharraf's visit to Pentagon, Mr Rumsfeld said they had talked of a number of ways for strengthening the military-to-military relationship between the two countries.

He said the defence consultation group was being re- established and Undersecretary Doug Feith would be the US representative in negotiations, and "we look forward to strengthening the military-to-military ties".

Privatization as 'single entity'

The government has decided to privatize Pakistan State Oil (PSO) as a "single entity" within this year. "The new petroleum policy is likely to be announced in March when we would simultaneously be starting the soft marketing of the PSO," said Minister for Privatization, Altaf M. Saleem.

Dr Ehsan Rashid passes away

Dr Prof Ehsan Rashid, eminent economist and former Vice Chancellor of Karachi University, died on Wednesday night at Aga Khan Hospital where he was rushed after he suffered a heart attack. He was 75.

He is survived by the widow, Nayyer. Besides, thousands of his students, who revered him, and a vast circle of educationists will mourn his death.

Margin on oil sale prices

An oil marketing company (OMC) has sounded a warning (to the government) that it would be forced to quit its plans for future investment in Pakistan if the margins on the oil sales prices are not increased to four per cent from the existing two per cent.

Govt not bound to lift surplus sugar

The government has not made any commitment with the sugar mills owners to lift the surplus stock of sugar, a senior commerce ministry official told.

The official maintained that the government was not supposed to procure surplus sugar stock from the millers an impression has been given by Pakistan Sugar Mills Association (PSMA).