Today's HeadLines

Conciliatory note marks NA session

SLAMABAD: An apparent inter-party warmth overcame some opposition pinpricks as the National Assembly began a second session this winter on Monday with Prime Minister Yousuf Raza Gilani keeping up a conciliatory mode that helped him wriggle out of a political crisis earlier this month.

Responding to some points raised by two opposition figures at the start of the session after a 17-day recess, the prime minister promised an explanation to the house by his interior minister about a confusing law and order situation in Karachi and put on hold a costly project to build more parliamentary lodges in Islamabad until a fresh decision by a committee of the house.

Both the issues were raised by opposition leader Chaudhry Nisar Ali Khan, who also sought explanations about the nature and achievements of President Asif Ali Zardari’s recent visit to the United States and about media reports of the name of the minister of state for ports and shipping, Nabil Ahmed Gabol, being put on the exit control list (ECL) after he had sent his resignation from office.

Foreign Minister Shah Mehmood Qureshi told the house that the president had undertaken the US visit in his “private capacity” to attend a memorial service for Richard Halbrooke, the US special representative for Pakistan and Afghanistan, though Mr Zardari used the opportunity to promote national causes through his interactions with US President Barack Obama and other officials.

The prime minister said he had checked with the interior secretary last week after media reports about Mr Gabol’s name being put on the ECL — to bar his travel abroad — and was told that no such step had been taken.

There was a brief furore in the house when some members of the opposition PML-N refused to hear the foreign minister’s explanation about the president’s visit before knowing what action had been taken against an unidentified bureaucrat whom Mr Gabol had earlier accused of playing a “mischief” in the affair and a PPP member rudely shouted at them.

However, the situation calmed down after Deputy Speaker Faisal Karim Kundi allowed a PML-N member to make a speech before giving the floor to the foreign minister, whose justification for the president’s trip remained unquestioned as Mr Gilani’s PPP-led coalition exuded confidence compared to uncertainty it faced when the house ended its last session on Jan 7 after two of its allies had parted ways to reduce it to a minority government in the 342-seat house.

The 25-seat MQM has since come back to the fold to give the coalition majority, though without rejoining the cabinet, with assurances from the two main opposition parties not to try to unsettle the system, which were repeated in the house on Monday by PML-N’s Chaudhry Nisar and PML-Q’s parliamentary leader Faisal Saleh Hayat even while criticising the government.

The prime minister was thankful for what the opposition offered and assured them that the government would take their views seriously.

The eight-seat JUI-F too did not seem keen to go to the opposition benches after quitting the alliance and the cabinet last month.

Its chief Maulana Fazlur Rehman occupied his front seat on the opposition benches on Monday and, unlike the previous session, none of the party members asked the chair to act on their pending application for the allocation of seats on the opposition benches.

Projects in flood-hit areas shelved

ISLAMABAD: The government has decided not to take up major reconstruction and rehabilitation projects in the flood-hit areas during the current fiscal year because of a financial crunch and negligible fresh aid commitments from the international community.

A Planning Commission official told Dawn on Monday that the entire portfolio of reconstruction and rehabilitation projects costing about $9 billion (Rs765 billion) had been set aside because of shortage of funds.

However, he said, the government had decided to simplify the approval process for such projects to avoid the normal course involving formulation of feasibility studies followed by their technical assessment by the Central Development Working Party and the Executive Committee of the National Economic Council.

“The objective is that these projects may be started without wasting time in case the international community makes available fresh funding.”

Most of the projects relate to public infrastructure and services like roads, bridges, railway tracks, irrigation system, schools, hospitals and power sector installations. Their implementation would take up to four years and require substantial outlays.

Most of the current year`s funding has already been earmarked for strategic projects nearing completion and the Public Sector Development Programme (PSDP) has been restricted to Rs140 billion from the original allocation of Rs280 billion.

The official said the international community, particularly the United States, the World Bank and the Asian Development Bank, had offered to divert funds from existing loan portfolios to reconstruction and rehabilitation activities. However, it had also begun interfering in the implementation process by raising transparency issues.

“This was not acceptable to Finance Minister Dr Abdul Hafeez Shaikh who took a strong position against diversion of international funds from ongoing programmes and warned the international donors against maligning the government and its institutions,” he said.

The minister was of the view that some rehabilitation projects, although at a very small scale, could be made available to the international donors for implementation through community-based organisations under citizens` programmes, the official said. That would have eased the pressure on the government, he said.

The official said that since most of the earlier projects destroyed by the floods had proven benefits because they had been serving the needs of the people and the economy, feasibility studies and concept papers were not necessary for them.

“What we need is to update their construction cost and there are set procedures to extrapolate the amount under the Pakistan Engineering Council`s standards,” he said.

He said institutional lenders like the World Bank had advised the government that its fiscal position would weaken if it had to bear a large part of the rehabilitation and reconstruction cost.

“Estimates of the reconstruction cost range from Rs662 billion (4.5 per cent of GDP) to Rs779 billion (5.3 per cent),” the bank said.

The official said the PSDP did not have room for rationalising and reprioritisation and taking loans for reconstruction would increase fiscal deficit because of a build-up of public debt which would have adverse fiscal and economic implications in future.

The federal government hopes that the provinces will launch some of the important projects from their development allocations over the next two to three years.

A damage and needs assessment led by the World Bank and the ADB had put reconstruction cost of housing, health and education sectors at Rs234 billion; irrigation, transport and communications, water supply and sanitation and energy at Rs300 billion; agriculture, private industries, financial sector and social protection and livelihoods at Rs197 billion; and governance, disaster risk management and environment at Rs25 billion.

Inconsistent policy blamed for lack of investment

ISLAMABAD: First it was just the Balochistan government that was pushing for termination of the contract one of its predecessors had signed with Tethyan Copper and Gold Company (TCC) for Reko Diq. This was followed by a court case and then politicians jumped into the fray.

A group of senators has announced its support for the idea that the mining of gold and copper at Reko Diq be done by Pakistanis instead of TTC.

Such incidents lend credence to the words of people such as this senior diplomat who commented: “The greater hurdle [to foreign investment in Pakistan] is the inconsistent policies of the government.”

He said this as he explained that he would like to encourage better business relations between his country and Pakistan, but could not because of the flip flops in the state`s policies.

His are not merely the words of an outsider. In private conversations, senior government officials and those working for the private sector in the auto industry, energy, mining, manufacturing and oil and gas sectors have expressed the same views. Inconsistent policies are the greater evil.

Abbas Bilgrami, the managing director of the country`s first Liquefied Petroleum Gas (LPG) terminal, said that due to the sudden change in government policies, he was even planning an exit from the scene.

“Policy makers invited us to enter the energy market of the country in 2001; the policy was conducive and we had international investors too,” he said.

“But the LPG pricing formula was changed in Dec 2006 by OGRA and another change in the policy in Jan 2009 resulted in a loss of up to $200 per ton LPG for the importers as it gave leverage to local produced LPG which is cheaper.”

The state of the art LPG terminal at Port Qasim was established by his company at a cost of $30 million in 2004; its current value is around $120 million, but the facility remains under-utilised despite a severe LPG shortage in the country, because importing LPG is not feasible under the current pricing regime.

In a report the Overseas Investors Chambers of Commerce and Industry has highlighted seven factors related to declining investments in the country — five of them are directly or indirectly related with policies and regulations, Thee factors are `Business Environment,` policy and regulation, federal budget, while the law and order and availability of utilities are at fifth and sixth places and the performance of the ministry and regulatory bodies is also part of the list.

Responding to the LPG terminal case, minister for investments, Salim Mandviwala, explained that “Most decisions in the past were taken through the SROs and these can be withdrawn easily.”

He claimed that the present government was bringing regulatory changes and would also present a Specialised Economic Zones Act to the Council of Common Interests.

And then the minister also added that his government did not change policies as had happened in the past.

Yet, under the incumbent government the refining sector has lodged a complaint to the petroleum ministry that the collective loss faced by most of the petroleum refineries in the country exceeds Rs2 billion — in the past few months.

“Gradually the government has been changing the petrol pricing formula since 2008 and we faced a loss of more than Rs2 billion after the one per cent incidentals on petrol have been withdrawn,” said Aftab Husain, Deputy Managing Director, PRL. “While the ECC decision to deregulate petrol , which was linked with withdrawal of one per cent incidental, has not been implemented.”

According to official figures, the refining sector faced a 134 per cent drop in foreign investment in the six months of the current fiscal year over the same period in 2009.

This is why, analysts point out, no major international player has entered the local fuel and electricity scene despite the high demand for fuel and electricity. In fact, some go so far as to say that such figures will get worse in the wake of the state`s flip flops on investments like Reko Diq.

BITTER MEMORIES

Probe a little deeper and the unpleasant memories of the 90s are said to be keeping them away: “The treatment and persecution faced by the Independent Power Producers (IPPs) after the government change in mid-90s, was a serious blow that continues to scare off investors in the power sector,” said an official of the ministry of water and power.

He added that despite the active interest of the US government in Pakistan`s energy sector, the private sector players in the US were not willing to invest in electricity generation or distribution in Pakistan.

The same has been witnessed in the oil and gas exploration and production sectors, where no new company has entered and the country is constantly suffering from a widening gap between demand and supply of natural gas. reserves.

Most of these people agree that till there is more stability and continuity in policies, foreign investment will not pour in, regardless of how good or bad the security situation is.

And this is why despite a drop in terror attacks in the country in 2010 by 11 per cent against 2009, the foreign private direct investment has declined by 14.5 per cent during July- Dec 2010 compared to the corresponding period in 2009.

If nothing else, these figures prove that the simple relationship that the policymakers like to draw between the poor security situation and the lack of foreign investment has flaws somewhere.

Kazmi`s bank accounts frozen

ISLAMABAD: In a fresh development in the Haj scam, the Federal Investigation Agency (FIA) on Monday froze three foreign bank accounts of former religious affairs minister Hamid Saeed Kazmi in Multan, a senior official of the agency said.

The tracing and freezing of Mr Kazmi`s foreign currency accounts (FCAs) may create further trouble for him as he has already been accused of involvement in the fraud.

The ex-minister had earlier denied that he had any foreign bank account.

However, talking to Dawn, he conceded that he opened an FCA to have transaction in pound sterling with his brother who lives in the UK.

According to sources in the FIA, Mr Kazmi has some 20,000 pounds in one of his bank accounts in Faisal Bank. The exact amount in his other accounts frozen by the FIA could not be ascertained.

The source said since the former minister had denied he held any foreign currency accounts, the assistance of State Bank was sought to trace his accounts in Multan.

In his defence, the former minister said he held an FCA even before becoming minister. “Where can I take my bank account if I am accused of being involved in the scam,” he said.

“I opened foreign currency accounts because I have to make some transactions with my brother who lives in Britain. But I have made no significant transaction so far.”

About the two other accounts, the ex-minister said he could not recall having any such account. “The accounts might have been opened by a relative of mine who had worked in different banks and died three years ago.”

Under the Haj policy, the government had agreed to provide accommodation within two kilometres of the Haram Sharif. But most pilgrims had to stay three to eight kilometres from the Haram.

Prime Minister Yousuf Raza Gilani sacked Mr Kazmi following an outcry over the Haj fiasco.—Syed Irfan Raza

Govt to accept NA Committee decision on Lodges

ISLAMABAD: Prime Minister Syed Yusuf Raza Gilani on Monday referred the Parliament Lodges Phase-II’s construction project to the Housing and Library Committee of National Assembly, and said the Government would accept its decision.

Speaking in the National Assembly, after Opposition Leader Chaudhry Nisar Ali Khan raised objections to the project, the Prime Minister said he sought details from Cabinet Division, Planning Division, Law and Parliamentary Affairs and National Assembly and was informed that various projects are initiated by different departments in Islamabad.

He said Parliament Lodges project was initiated in 2008, and the Central Development Working Party (CDWP) with Deputy Chairman Planning Commission in the chair approved it in September 2009. Later the project was presented to Executive Committee of the National Economic Council (ECNEC) headed by the then Finance Minister Shaukat Tarin, which also approved it on January 21 2010.

While the Housing and Library Committee of the National Assembly also approved it.

He, however, said contrary to the perception as if the project would cost Rs. 2.90 billion, in fact its actual cost would be Rs. 410 million, which had already been approved.

He said the construction would take place in phases.

Prime Minister said he has directed the Capital Development Authority (CDA) to reserve three percent quota for journalists in all the sectors of the federal capital. – APP

Suicide bomber kills 35 at Russia’s biggest airport

MOSCOW: A suicide bomber killed at least 35 people at Russia’s biggest airport on Monday in an attack that bore the hallmarks of militants fighting for a seperate state in the north Caucasus region.

President Dmitry Medvedev vowed to track down and punish those behind the bombing, which also injured about 130 people, including foreigners, during the busy late afternoon at Moscow’s Domodedovo airport. Dense smoke filled the hall and a fire burned along one wall.

“The explosion was right near me, I was not hit but I felt the shock wave people were falling,” said Yekaterina Alexandrova, a translator who was waiting in the crowded arrivals area to meet a client flying in from abroad.

Thick drops of blood were scattered across the snow-covered tarmac outside the arrivals hall, where traces of shrapnel were found.

“I heard a loud boom… we thought someone had just dropped something. But then I saw casualties being carried away,” a check-in attendant who gave her name as Elena told Reuters at Domodedovo, which is some 22 km southeast of Moscow.

The Kremlin said Medvedev, who has called the insurgency in the north Caucasus the biggest threat to Russia’s security, delayed his departure for the Davos international business forum in Switzerland.

The rebels have vowed to take their bombing campaign from the violence-wracked north Caucasus to the Russian heartland, hitting transport and economic targets. They have also levelled threats at the 2014 Winter Olympics, scheduled for Sochi, a region they claim as part of their “emirate”.

“Security will be strengthened at large transport hubs,” Medvedev wrote on Twitter. “We mourn the victims of the
terrorist attack at Domodedovo airport. The organisers will be tracked down and punished.”

No group has yet taken responsibility for the attack, but dozens of Internet surfers, writing in Russian, praised the suicide bomber on unofficial site kavkazcenter.com.

India won’t let nationalists raise flag in Kashmir

NEW DELHI: The Indian government foiled a nationalist party’s plan Monday to commemorate a holiday by raising the country’s flag in the heart of Kashmir, home to a separatist insurgency.

Leaders from the Hindu nationalist Bharatiya Janata Party, which is in the opposition in the national parliament, flew to Jammu in Indian-controlled Kashmir but were initially not even allowed to leave the airplane and were asked to return to New Delhi. After sitting on the tarmac for two hours, they eventually entered the terminal but will not be allowed to go anywhere else in the state, which is the only one in India with a Muslim majority.

While the Indian flag flies over government buildings in Indian-controlled Kashmir, the BJP leaders had wanted to hoist the colors in a square in Srinagar that is the frequent site of anti-India protests. Anti-India sentiment runs deep in Kashmir, where separatists groups are fighting for an independent homeland or merge with Pakistan.

The BJP ceremony was meant to commemorate Republic Day, which marks India’s adoption of a democratic constitution and falls on Jan. 26.

The Kashmiri and national governments feared that move would provoke violence after more than a dozen separatist groups said they would prevent any attempt to hoist the Indian flag in the Lal Chowk area of Srinagar, the region’s city.

It was not immediately known what the three leaders _ Arun Jaitely, Sushma Swaraj and Ananth Kumar _ planned to do next.

Indian Prime Minister Manmohan Singh and Kashmir’s top elected official, Chief Minister Omar Abdullah, had both appealed to the BJP to drop its plans before the leaders took off on Monday.

More than 68,000 people, mostly civilians, have been killed in Kashmir since an armed revolt erupted in the state in 1989. – AP

Ripple protests could topple U.S. allies

Alexandria, Egypt (CNN) -- Tunisia has brought a blast of reality to Mideast politics. Aging autocrats have been put on notice they can no longer count on docile citizens.

But is an era of unrest approaching? Will the winds of change sweep east along the Maghreb and bring down regimes from North Africa to the Levant and even the Arabian Peninsula?

Beyond doubt, those winds are blowing. Across the region they are being driven by the same social and economic factors, including high unemployment, a booming birth rate, and exploding food prices.

According to the International Monetary Fund, if chronic unemployment and the social tensions that accompany it are to be avoided the Middle East needs to create another 18 million jobs in the next 10 years. From where they stand today that's a very tall order indeed.

Amre Moussa, the Arab League secretary-general and former Egyptian foreign minister, warned regional leaders last week: "It is on everybody's mind that the Arab spirit is broken. The Arab spirit is down by poverty, unemployment and the general decline in the real indicators of development."

Regional parties like the moderate Islamists in the Muslim Brotherhood, scent opportunity.

"The same disease is in all Arab countries, we have different degrees only but the same origin of the disease, it is the same dictatorship, lack of democracy, lack of freedom restrictions on civil society," Esam el-Erian, spokesman for Egypt's Muslim Brotherhood said.

In Egypt as in other countries in the region the Muslim Brotherhood faces constant government harassment.

Hosni Mubarak, the 82-year-old Egyptian president, fears their populist power. He allows them and other opponents of his regime a very limited political voice, enough he hopes to defuse anger at the monopoly of power he has exercised over 30 years in power.

It is a balancing act that is now in peril, according to his critics. Ayman Nour, an opposition leader jailed by Mubarak and only released following U.S. pressure, believes Tunisia's revolt has shortened Mubarak's days in power.

He said: "How change happened in Tunisia was the last resort after all peaceful methods were no longer an option. This is what happened in Tunisia and this is what could happen in Egypt. It is the only solution to a situation that never changes."

There is a presidential election scheduled in Egypt in September this year. The situation is primed, Nour says, everything is ready, all it needs is something to ignite popular passions.

El-Erian of the Muslim Brotherhood talks in more revolutionary terms. "Without solving the main problems we can only delay the revolution, delay the intifada" or uprising he says.

But for all the rhetoric -- and despite several incidents -- the government in Egypt remains very much in control.

In Tunisia the revolt was triggered by anger at the suicide of Mohamed Bouazizi, a young vegetable market trader who torched himself over his dire economic plight.

In the week following the flight of Tunisia's President Zein al-Abidine Ben Ali to sanctuary in Saudi Arabia, more than half a dozen Egyptians set fire to themselves like Bouazizi.

None triggered wider protests, never mind opened the floodgates to the very real reservoir of anti-regime anger.

But Ibrahim Houdaiby, a savvy young analyst from a family with a long political pedigree, says it is too early to draw conclusions. "There is a lot of anger, and there is a lot of frustration, and if this frustration is not yet tangible and did not yet manifest itself in violent and big forms it is possible that it might happen and it is in nobody's interest that it does."

At a funeral near Egypt's second city Alexandria, where the Egyptian police have an unenviable reputation for brutality, I got a strong sense of just how far away that spark for revolt may be.

The gathering was tiny, just family and close friends. Twenty-five-year old Ahmed Hashem Sayed was the only one of the recent self-immolation cases to die of his burns.

As his slender shroud-wrapped body was being laid to rest only yards away on the other side of the high walls surrounding the tiny cemetery plot crowds going about their daily routines thronged the streets, none but a couple of curious kids joined the mourners.

Sayed's neighbor said his death had nothing to do with Tunisia and everything to do with his own poverty.

Later, on the muddy street of the slum where he lived with his family, his father told me his son was out of work more than he was in it. He didn't want to talk to us, didn't want to attract international attention, didn't want to make a martyr or national hero out of his son.

Houdaiby is sure Sayed was aware of Tunisian burn victim Bouazizi, who like Sayed was young and set himself on fire in economic despair, and although he may not have emulated him, he may well have been influenced by his actions.

The big regional lesson of Tunisia, according to Houdaiby, is that people have learnt they can bring about change themselves.

"What happened in Tunisia will of course impact the way people think. They know if they want things to change, at one point they will be able to change things"

But he adds Mubarak's regime has also learnt lessons, offering to subsidize bread and other essentials, albeit Houdaiby suspects, only until the current crisis seems over.

No doubt though, he says, the government's vehement denials ironically show how troubled it is by the Tunisian revolt.

"When you have the minister of foreign affairs saying that Tunisia could not be compared with Egypt and the situation is completely different and it is ridiculous that people are making any sort of comparison that says that they are worried."

And if they are worried in Egypt, with its large, tough state security forces, then other regional leaders may well be troubled too, warns El-Erian, spokesman for Egypt's Muslim Brotherhood. "If Egypt tumbles then watch the region follow, if change comes in Egypt, not in Tunisia, it will be domino sequences."

Indeed in the long run the United States may be the big loser. Many of the regimes on the defensive, like Mubarak's, are long-standing US allies.

And that says El-Erian -- who calculates that in a democratic Egypt the Muslim Brotherhood would have a large say -- could have serious implications for the United States.

"We are reflecting the opinion of the people and opinion and sentiments here are against the politics and policies of the United States in the region," he said.

It may sound like a bold statement, but on the streets of Tunisia, Jordan, Lebanon and Egypt to name but a few, U.S. credibility has taken a hammering over the past decade.

Wars in Iraq and Afghanistan have only served to fuel popular anger with the U.S. over the regional autocrats they support.

The implication is if the winds of change do blow down one or two of the region's rulers the political voices emerging may well bring a new dynamic to such intractable problems as Palestinian-Israeli conflict.

That alone could reset the region in a way unimaginable today.

Davos would be wise to remember why it works

It is easy to take pot-shots at the World Economic Forum in Davos. As most of the developed world groans its way back to growth, there is something a bit obscene about rich, famous and powerful people getting together on a Swiss mountain side to talk about how to make things better. It has a ring of “let them eat cake” about it.

This year’s jamboree will add fuel to the fire - with a large new Congress Centre entrance, with oodles of lights.

But as I say every year - that ignores what happens here. I don’t for one moment think that the sometimes pretentiously titled panels are really what this event is about. (Some are without doubt interesting and stimulate thought and debate, but you don’t need to schlep to Switzerland in winter to do that.)

Rather, Davos is about access, meetings, talking and schmoozing, which is why the most important rooms here are not the big halls where tedious panels will take place, but the bilateral rooms where government ministers and CEOs meet each other.

There is nothing as vulgar as a deal being done - that isn’t what Davos is about. Rather there is a handshake, a knowing nod, a sharing of understanding about future plans. It’s more: “I am doing this. What are you doing and how can we help each other?” Davos becomes neutral territory where opponents can chat. One top CEO told me that he meets all his top clients over the course of a week.

With so much firepower in this one place, there is also the chance for the global agenda to be clarified. Leaders make speeches. CEOs set out their thoughts. Activists present their protests. But by the time we all leave at the end of the week we have a good idea of what the issues in 2011 will be and how they will be tackled.

Last year the Greek Prime Minister George Papandreou said he wouldn’t need a bailout (he would and he did). We all left Davos knowing sovereign debt would be a growing problem and that there was no real plan to tackle it. Basel III wasn’t discussed much during the plenary sessions and panels, but it was the talking point of the coffee bars. Financial reform was on everyone’s agenda and eventually became law.

Perhaps where Davos tries, and some think fails, is when it attempts to become all things to all people. There is nothing sadder than Davos trying to become modern and ending up looking like your parents disco dancing. This year the congress bristles with social networking lounges, risk response network centres, social leaders, global young leaders, global young entrepreneurs, CEO tweeters and networking lounges galore. Much of this is nonsense. The real decision-makers will be having nothing of it and will be closeted away in their bilateral rooms and salons at nearby hotels. Most of us need only a coffee bar and an internet connection. Leave the jargon to the kids.

Davos would be wise to remember why it works. It creates an environment where like-minded people can meet and eat. A hot-house in the cold of winter where, every now and then, something actually gets done.