Highlights of the December 2008 issue

By Sabihuddin Ghausi

For many in the business world, the images were shocking: two of Pakistan’s premier currency dealers, Munaf Kalia and Javed Khanani, were shown handcuffed after their appearance in a court of law. Partners in one of the country’s largest foreign exchange business, the two were arrested on November 8 from Karachi and Lahore on charges that include money laundering and illegal transfers of cash, including foreign exchange.

The arrest was a remarkable event for Pakistan, a country where most corporate types try to keep a low profile vis-à-vis the law and where perpetrators and prosecutors of white-collar crime either try to brush it under the carpet or deal with it behind closed doors. While the arrests of Javed Khanani and Munaf Kalia became a public spectacle, they still left a lot of questions unanswered about how the enforcers of law and order deal with illegal business practices and whether all that we have seen and heard about the case is really all there is to know.

IN MEMORIAM: Mahmoud A. Haroon

By Idrees Bakhtiar

1920-2008

I first met Mahmoud Haroon a decade back and the meeting was a pleasant surprise. I had been working with the Pakistan Herald Publications Limited since 1980 and had consequently heard a lot about him. Haroon was the owner and chairman of the Dawn group and as it happens, the employees tend to have a somewhat mythical and distorted image of the employer.

However, when I met him at his spacious residence, Haroon Villa, after a nocturnal police raid at my house in November 1998, I was received by a humble individual. I went expecting a brief meeting in which I would be firmly but politely dismissed after I had recounted the incident. But the man I met was the complete opposite of what I had been led to believe. He inquired after my welfare and said he was sorry to hear about the incident.

SECURITY: Catch and Release

Sharafat Ali, also known as Khalid Fauji, was a close associate of Amjad Farooqi, the al-Qaeda-linked militant said to be the architect of the two assassination attempts on General (retd) Pervez Musharraf in December 2003 as well as the kidnapping and murder of journalist Daniel Pearl in 2002. Fauji was born in Nawabshah in 1981 and had links with militant organisations since his youth. However, it was in 2000 that he acquired training at a camp and when Afghanistan was invaded by the US a year later, he travelled to the former country. It was there that he met Farooqi. Fauji has been a close associate of Farooqi since then and is alleged to have worked with him to plan the assassination attempts on Musharraf.

The two attacks on the former military dictator were carried out in the last days of 2003. In the first attack, the militants coordinated with some junior officials of the Pakistan Air Force (PAF), who were indoctrinated and then recruited through a mosque preacher working for Farooqi. The attackers fixed explosives – allegedly supplied by Farooqi – to the Jhanda Chichi Bridge (between Rawalpindi and Islamabad), just a mile from Musharraf’s residence in the Army House. Nearly two weeks later, two suicide bombers tried to ram explosives-laden cars into his motorcade.

COVER: Watering the grass roots

By Nasir Jamal
 

Rao Asfar Khan has gone from one bank to another to borrow money for purchasing inputs for his crops but in vain. “It is nearly impossible to obtain credit,” he says. A small farmer from Rajanpur district in southern Punjab, Khan, is just one of hundreds of thousands of agriculturists who seldom, if ever, get a bank loan. They are never able to convince bankers that they qualify for short-term loans to purchase inputs such as fertilisers, seed, diesel and pesticides. “Bankers only lend to those who are influential,” Khan says.

His view is echoed by others. “Bank credit for the crop sector, that is, for short-term loans for purchasing inputs, is in short supply,” says Ibrahim Mughal, chairman of the AgriForum Pakistan, a body representing small and medium-sized landholders in Punjab. “Only one-fifth of the total agriculture credit extended by banks is allocated for short-term financing – for a period between six months to one year – for buying inputs. The rest is consumed by the rich and powerful for financing agriculture-based industries such as rice mills and for the mechanisation of agriculture,” he says. As a result, smaller farmers are forced to resort to the informal sector to meet their short-term financing needs, which comes at much higher costs.