Daily Pakistan Mar19,2009

Daily Pakistan Mar18,2009

Sherry’s husband & Rs 100m NBP gift

By Fasihur Rehman Khan

Mr Nadeem Hussain, husband of Information Minister Sherry Rehman, is a privileged person in the modern day Pakistan. His micro-finance bank, Tameer Finance Bank Limited (TMFB), recently got a Rs100 million loan from National Bank of Pakistan (NBP) despite being declared ‘negative’ in ratings.
Sources say the National Bank of Pakistan (NBP) President Ali Raza was made to approve the loan for the micro-finance bank, as he feared the high profile PPP minister might turn against him in case he declined.
But the NBP chief says there was no arm-twisting and the loan was sanctioned on merit.
Talking to this scribe, Mr Raza said as NBP did not do
business at micro-level so it decided to extend facilities to the micro-finance bank. He opined that the TMFB had a sound financial base and a reputed telecom company was also investing in it. When asked about the dissenting note of the top executives, he claimed that they had prepared the report keeping in mind a normal bank, but the micro-finance bank earns profits after a long span of investment.
Information Minister Sherry Rehman, when contacted, strongly refuted to having used any kind of political pressure to secure a loan for her husband’s bank. “I have no concern, no share holding, nothing to do with the bank. I even don’t know if they had applied for the loan or
not. I think some political opponents of mine are trying to propagate this non-issue,” she categorically said.
She said she had never contacted Ali Raza, the NBP president, though she knew him well socially. “I have not used my influence in any way in the financial matters of my husband,” she added.
Mr Nadeem Hussain, when contacted, said he had secured this facility from National Bank and had repaid it. He denied having used the political clout of her spouse. “Our bank is A-rated. We have secured this facility from two more banks. The financial health of our institution is very good. This is a normal procedure to get such facilities from other banks, nothing wrong with this,” said the TMFB president.
While the NBP chief easily hinted that his team responsible for approval of such a critical loaning facility to the other institutions did not have these aspects in mind, the dissenting note by three top executives, obtained by The News was signed by Shahid Anwar Khan, SEVP, Group Chief Credit Management of the bank; Wahajat A. Baqai, SVP, CMG; and Arshad Zia, AVP, CMG.
It reads: “The Tameer Finance Bank Limited (TMFB) started its operations in August 2005. Since the start of its operations, the TMFB is in continuous losses. In 2007,
the loss after tax is increased to Rs228 million compared to loss of Rs50 million in 2006. Because of the losses, the equity of TMFB has subsequently reduced to Rs335 million in 2007 from Rs551 million in financial year 2006.
The loss of Rs44 million in first quarter of 2008 further deteriorated the equity base. The rating of the bank is
another concern. As per JCR VIS the outlook for TMFB is negative. Since NBP presently has no relationship with TMFB and in view of overall weak financials, taking clean exposure of Rs100 million as recommended by FI, Operations Group has been considered as high risk.
The three bank officials did not sign the loan approval document. On the other hand, Credit Approval Memorandum, a confidential document of
the bank, signed by the other three officials, Mohammad Nadeem, SVP, Head of Financial Institutions and Management Division; Dr Asif A. Brohi SEVP Group Chief Operations, and Tariq Abdullah, Relationship
Manager, favouring the loan says: “CEO of the subject bank has requested NBP for local currency line i.e. clean placement. We have visited the office of TMFB located on Share-i-Faysal. We found TMFB had sound ownership structure, qualified and experienced management. Their
present request was for Rs300 million call line. But after evaluating their financial standing we found that Rs300 million was too much. We therefore convinced them to put the request for Rs100 million for which they agreed.
As desired by State Bank of Pakistan, that large commercial banks cannot do such business, we therefore suggest to support micro-finance banks in providing easy funding facility to them.”
Nadeem Hussain, a career banker having spent 27 years with Citi group, is president and chief executive officer of the bank. He got the micro-finance bank licence in 2005 when Shaukat Aziz was prime minister of the country and Nadeem’s spouse Sherry Rehman was on the opposition
benches. Having enjoyed long association with Shaukat Aziz as his one time subordinate, Nadeem had a big advantage in his favour, but wife Sherry was criticised on the assembly floor by the PML-Q legislator Kashmala Tariq for getting a favour in exchange for her silence over
the Steel Mills scandal.
Sherry had forcefully denied the charge then and stated that since Nadeem was a career banker having known and
worked with Shaukat Aziz, so it was a purely business thing and nothing to do with politics.
NBP Chief Ali Raza seems convinced that support to such micro-finance banks was a social service. The bank says it is an institution established for the purpose of serving the economically active poor with limited access to financial sector. But the ultimate sufferer in these cases, as seen in the past, seems the public money and that too at the hands of public representatives.

Isolating Islamists just won't work

By Rami G. Khouri

The news earlier this week was a sign of the times, and of the days ahead: the British government said it was resuming contacts with the political wing of Hizbullah, and the Obama administration said it was interested in exploring contacts with "moderates" among the Taliban in Afghanistan who might be separated from the extremists allied with Al-Qaeda.
These developments highlight a question that will surely prove to be a central issue in the months and years ahead: How do Western and other governments who see themselves as law-abiding, God-fearing, and righteous connect with, or even negotiate with, armed militant movements that defy, challenge and occasionally attack these governments' local allies and surrogates?
The Taliban and Hizbullah are two very different movements, reflecting diverse national contexts, aims, tactics and degrees of legitimacy. They are only two of dozens of other such groups around the Arab and Asian region that are viewed negatively and shunned by the United States, most other Western states, Israel, and many Arab countries, but enjoy substantial support in their own countries and around the region. Islamist groups, political parties, militias, rebel movements, tribal movements, insurgent forces, and occasional semi-criminal gangs traditionally had been strictly shunned or actively fought by the American-led camp that liked to speak of itself as the guardian of universal enlightened values. American presidents and other allies, clients and surrogates often said that groups like Hizbullah, Hamas, the Taliban, and even some shunned governments who wished to join "the civilized world" and the "community of nations" had to change their ways and stop opposing or fighting the US-led camp.
It is now obvious that this once strict policy of isolating and opposing Islamist and other militant groups until they unilaterally changed their ways has not worked, and will not work. One of the most important political lessons of the past decade or so has been the failure of sanctions and threats that aimed to change the policies of target movements or governments. Hamas, Hizbullah, Syria and Iran in particular have been targeted by the US, Israel, and elements of the European Union and the United Nations system; but they have largely ignored the sanctions and threats, and have persisted in their policies. The wisdom or stupidity of such a response will become ever more obvious. For the moment, all we can conclude is that punitive sanctions and threats do not work very well, and should be replaced by more effective approaches.

The initial signals from the Obama administration suggest it understands this and is probing for other means of dealing with or politically engaging governments and movements that it had traditionally confronted or tried to isolate. Obama himself has spoken of affirming "respect and mutual interests" as guiding principles for dealing with those whom the US sees as foes or mere troublemakers. This approach has elicited positive initial responses from some of those target groups, and it is very likely that we will see serious political discussions soon among the US, Syria and Iran.
While this shift in American and British attitudes is positive, sensible and to be applauded, the lingering danger is that some in the US and the West will offset their neo-rationalism with a resurgent Orientalism - in other words they will say that "carrots and sticks" should be used to test the troublemakers and see if they are really able to have a meaningful political dialogue and eventually change their ways. The unspoken subtext in such an attitude is that you have to deal with these countries and groups as if you were dealing with animal you are trying to train: Hit them when they misbehave, and feed them to entice them to follow your lead.
The "carrots-and-sticks" approach is only a mildly different version of the previous policy of threats, attacks, sanctions and regime change. It will fail, as the former policy failed, because it is based on the assumption that the policies and approach of the US-led camp is legal, righteous and generous, and that this camp defines the rules that others in the world must abide by. This is very similar to the dynamics that defined the colonial era, which, thankfully, largely ended half a century ago - with the exception of lingering threads such as this approach to those who remain defiant in the Arab-Asian world.
Despite these misgivings, some signs of change are in the air, and they are encouraging. How far they will go and what impact they will have remain unclear. Rhetoric is the first step to action, so adversaries talking to each other is a good start, and could lead to changes in policies that reduce tensions and promote mutual well-being.

Rami G. Khouri is published twice-weekly by THE DAILY STAR.
http://www.dailystar.com.lb/article.asp?edition_id=10&categ_id=5&article_id=100133

Daily Pakistan Mar17,2009

Pakistani Leader Bows to Pressure

Judges Reinstated After Protests, in Sign of  Zardari's Weakening Grip 

By Pamela Constable

Unable to crush street protests Sunday that spilled out of this city and threatened to reach the capital, the Pakistani government announced early Monday morning that it would restore the former chief justice of the Supreme Court and a group of other deposed judges in a major capitulation to opponents.

The move reflected the weakening position of President Asif Ali Zardari, a key U.S. ally, but it also signaled a peaceful end to a mounting political crisis in the nuclear-armed Muslim nation of 172 million. Zardari had resisted bringing back former chief justice Iftikhar Mohammed Chaudhry for months, but he faced mounting pressure from a broad coalition of opponents who demanded the reinstatement of Pakistan's independent judiciary and threatened to march on the capital, Islamabad, until Chaudhry was brought back.

The decision marked an extraordinary victory for Pakistan's legal community, which has been agitating peacefully for the judges' reinstatement for the past two years, and for Zardari's major political rival, former prime minister Nawaz Sharif, who joined the lawyers' crusade last month and quickly became its most forceful advocate.

Sharif, who led an all-night protest caravan on a highway towards Islamabad, the capital, halted it at the town of Gujranwala on Monday morning and announced he was calling off the "long march" in response to the government's move. Sharif congratulated Zardari and Prime Minister Yousaf Raza Gillani, who announced the measure in a brief televised address at 6 a.m.

"It is time to fulfill promises," Gillani said. "Democracy cannot flourish without strong institutions." He said Chaudhry would be reinstated by executive order March 21, and he also announced that the government would immediately lift an emergency ban on all public gatherings and release all political and legal activists arrested in the last week

The U.S. government, which had been pressing Zardari and Sharif to find a peaceful way out of the crisis, immediately welcomed the move. In a statement, the U.S. Embassy in Islamabad called Gillani's announcement "statesmanlike" and a "substantial step towards national reconciliation."

As word of the expected announcement spread early morning Monday, Pakistani television stations showed jubilant crowds gathering around Chaudhry's house in Islamabad. Celebrations also erupted in the Sharif-led caravan, which was traveling through the night from Lahore.

"This will restore stability to Pakistan," Athar Minallah, a spokesman for Chaudhry, said early Monday, as analysts suggested the move and other concessions offered by the government might heal the rift between Zardari and Sharif.

Pakistan faces a raging Islamist insurgency and a deepening economic crisis. The growing confrontation between Zardari and a coalition of primarily secular opponents has alarmed Washington and raised the prospect of a possible army coup, just one year after Pakistan emerged from a decade of military rule.

The government had sealed off Islamabad with shipping containers and other barricades late Saturday in an attempt to prevent the marchers from entering the federal government district. But as rumors of Chaudhry's restoration spread, many police barricades were withdrawn from the Grand Trunk Road and hundreds of people joined the procession in towns along the way.

Chaudhry and the other judges were fired in 2007 by Pakistan's former military ruler, Pervez Musharraf, because they refused to take an oath under his amended constitution.

Zardari had publicly insisted that the judges could not be restored until Pakistan's Parliament had a chance to make broader changes to the constitution. But many Pakistanis and foreign observers believed the president reneged on his pledge to restore them because he feared that the independent-minded Chaudhry would reopen old corruption cases against him and might also overturn many of his actions as president.

Zardari's turnabout came after thousands of demonstrators poured into the streets of this leafy capital of Punjab province Sunday, throwing rocks at police and cheering wildly. A wide cross section of Pakistan's political, social and religious sectors joined the day-long protests.

As the demonstrations escalated, police first responded with volleys of tear gas. But by mid-afternoon they suddenly withdrew from the streets, while numerous city and provincial officials were reported to have resigned. The swift collapse of authority signaled the end of Zardari's bid to seize control of Punjab, the most politically influential region of the country, and raised serious questions about his ability to remain president.

"The present rulers are defaming every norm of democracy, and Zardari is behaving worse than a dictator. We will continue our march until the rule of law is restored," vowed Iqbal Haider before the judges' reinstatement was announced. Haider, a white-haired lawyer, was attorney general under slain former prime minister Benazir Bhutto.

Bhutto, a charismatic leader and champion of democracy who was married to Zardari, held power twice and was assassinated in 2007 while planning a political comeback. Her widower became leader of the Pakistan People's Party and pledged to mend fences with her rival, Sharif, but the alliance quickly soured.

There was no public appearance or statement Sunday by Zardari, but his new information minister, Qamar Zaman Kaira, told journalists in Islamabad that the government hoped to resolve its differences with the opposition through amicable negotiation. Kaira replaced Sherry Rehman, who abruptly resigned from the post late Friday night after the government temporarily blocked transmission of a major independent news channel. Several members of Zardari's party have defected in the past week, including three members of Parliament

In another sign of the government's weakening grip, key opposition leaders in Lahore, including Sharif and legal dissident Aitzaz Ahsan, began the day under house arrest and ended it leading caravans of supporters through the streets. At dusk, Ahsan addressed supporters inside the Lahore High Court compound.

Pakistani news media reported that several other opposition leaders, including Sharif's brother Shahbaz and the heads of other political parties, had reached Rawalpindi, a garrison city about 15 miles from Islamabad, and were hiding in private homes waiting to join the marchers and move toward the capital.

"The writ of the government has ended. Nobody can stop us from reaching Islamabad," Ahsan told a cheering crowd of lawyers. As night fell in Lahore, streets that had been full of tear gas and flying rocks during the day became scenes of celebration. People danced, sang and waved banners atop cars and trucks as smiling police watched from the sidelines, riot gear discarded on the ground.

Several police officers said they were relieved to have been pulled back from the protest areas, and also said they supported the Sharifs. Punjab has traditionally been a stronghold of the Sharif brothers, and Zardari's imposition of central authority last month was extremely unpopular.

With Zardari rapidly losing control, officials in Islamabad scrambled to find a way out. Kaira said officials would ask the high court to review its decision last month to bar the Sharifs from politics.

But the protesters, flush with success, were in no mood to negotiate. They included hundreds of lawyers, activists from Sharif's Muslim League, conservative Muslims from the Jamaat-i-Islami religious party, women from civic and human rights groups, followers of former cricket champion and politician Imran Khan, and disaffected members of Zardari's Pakistan People's Party.

"We have already achieved success. The whole city has come out to support us, and the government is helpless," said Mohammed Fareed Chaudhry, 55, a lawyer. "We respect and appreciate all the parties and groups that have joined our cause. It is only a matter of hours or days before Zardari will have to leave power."

Special correspondent Shaiq Hussain in Islamabad and staff writer Karen DeYoung in Washington contributed to this report.

Daily Pakistan 15 March