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Blast of Past : Mushraff coup and economy

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Thursday, October 14, 1999 Published at 15:19 GMT 16:19 UK
Business: The Economy
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Pakistan's economic nightmare
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People have become disillusioned with Pakistan's economic progress
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Disaffection with the government of Nawaz Sharif over his failure to turn around the badly performing economy was a major factor in events leading up to the coup in Pakistan.
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Although the military had its own axe to grind with the prime minister, many people in Pakistan had become increasingly disillusioned with his handling of the economy.

Voters had elected Mr Sharif largely for his pledge to revive the economy. But, after two and a half years, foreign investment has dried up, prices are spiralling, foreign debt stands at $32bnagainst reserves of little more than $1bn, and unemployment is at an all-time high.

The International Monetary Fund had already suspended aid payments to Pakistan before the coup, demanding that the country first got its finances in good order.

Now, there is a danger that the coup could stop the flow of aid altogether. The IMF's managing director, Michel Camdessus, said the organisation would not send any more aid to Pakistan until democracy was restored.

He said that when the international community suspended aid to a country, IMF aid was also "interrupted". He also said he was "worried" by the coup in Pakistan, calling it a "real threat".

The country to watch is the United States. Its opinion counts a lot in international financial circles, and the US State Department's spokesman, James Rubin, has already said the coup would make it impossible for Washington "to carry on business as usual in Pakistan".

He said the United States wanted to see "the earliest possible restoration of democracy in Pakistan".

That could indicate that President Clinton will review his plan to visit Pakistan, India and Bangladesh early next year.

The trip was postponed last year when both India and Pakistan conducted underground nuclear tests.

They resulted in US-led economic sanctions, exacerbating the downward spiral of the Pakistan economy.

When the sanctions were later relaxed as Pakistan teetered on the brink of defaulting on its debt repayments, Mr Sharif's government tried to strike a deal with the IMF over further aid.

Some of the reforms demanded by the IMF were introduced, but they did not go far enough to stop the economic decline because of powerful opposition at home.
 
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World: South Asia
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Pakistani 'plunderers' warned
http://news.bbc.co.uk/2/hi/south_asia/503790.stm
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General Musharraf warned "plunderers of national wealth"
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Pakistan's new chief executive, General Pervez Musharraf, has warned loan defaulters to pay back their debts or face stiff penalties, including jail.



He said action would be taken against the defaulters and others who he described as plunderers of national wealth.

He said they had until 16 November to make repayments.


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Islamabad correspondent Owen Bennett-Jones: "Many senior Pakistani politicians are believed to have massive unpaid bank loans"
The general said lists of defaulters had been drawn up by the country's new military rulers.

The governor of the country's reserve bank has said that non-performing or defaulted loans owed to the banks in Pakistan amount to some $7 billion.

He said around $2 billion was owed by 322 families alone.

General Musharraf said: "There are many kind of plunderers and I will call them plunderers of national wealth.

"We will crack down on the first group of people and things will start from November 17," he told the official Associated Press of Pakistan.

"Maybe we'll put them behind bars, they should be prepared," he said.


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In one of his first acts after overthrowing the previous government, General Musharraf ordered that accounts of leading politicians be frozen.

Since then, he has announced a crackdown on corruption and said that one of his priorities would be to set up an accountability bureau.

On Monday, General Musharraf declared his assets, in what he said was a first step towards cleaning out a corrupt system.

Commonwealth threat

The threat came as Pakistan was itself warned by Commonwealth Secretary-General Emeka Anyaoku that it would be expelled from the organisation if it did not keep promises to return to democracy.

However he acknowledged that the organisation's attitude had been affected by the lack of popular opposition to the military coup.

Mr Anyaoku said the important thing was that the Commonwealth was now engaged in working with Pakistan to see how democracy could be restored.

General Musharraf said he would ask the National Security Council - the country's top ruling body - to consider holding a referendum on military rule.

"There are pros and cons. Not that I am scared of it."

He said he was certain the result would go in his favour.
 
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World: South Asia
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Pakistan cracks down on defaulters
http://news.bbc.co.uk/2/hi/south_asia/524229.stm

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Former MP Nawaz Kokhar is led away by an army officer in Islamabad
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Pakistan's new military government has begun arresting former politicans and business leaders after they failed to meet a deadline by which to repay bank loans.



Five people have been arrested in Islamabad, including a former cabinet minister in the government of Benazir Bhutto.

Others have been picked up in raids across the country.

Security has been strengthened at the country's airports to prevent any defaulter from leaving the country.


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The BBC's Owen Bennett-Jones: "The military are not giving many details"
The Finance Minister, Shaukat Aziz, said $3bn is owed to financial institutions as a result of loans taken out under previous civilian administrations.

When General Pervez Musharraf took power, he gave defaulters four weeks to pay back what they owed.

He pledged to come down hard on those who had used political influence to borrow money from banks, but failed to pay it back.

Legal action

Pakistan's official APP newsagency says Anwar Saifullah Khan, petroleum minister under Benazir Bhutto from 1995-97, was taken into custody.

Others arrested included former Pakistan People's Party MP, Nawaz Kokhar, Bashir Ahmed Bilour of the Awami National Party and former Pakistan International Airlines chairman, Waqar Azeem.

The authorities have also published a legal order to back actions against debtors which states that corrupt practices over the past 14 years are punishable by jail terms.

Politicians found guilty will be disqualified from public office for 21 years.

The military says it wants to concentrate on catching the major defaulters and not those who owe small amounts to the banks. Despite that, it has been the small debtors who have been the first to repay the banks.


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The BBC's Owen Bennett-Jones says many of the defaulters are businessmen who argue that their industrial units are not performing and that they are consequently genuinely unable to repay.

Most defaulters were reported to have ignored the deadline of midnight on Tuesday (1900 GMT) for repayment.

However, the government says that the deadline has resulted in $160m worth of loans being repaid in the form of cash.

That figure is expected to rise because information is still coming in from more remote bank branches, and some loans are being repaid in non-liquid form, such as shares.

Fleeing abroad

Mohammad Khalid of the state-run Small Business Finance Corporation said: "We have reports that a number of big defaulters have already fled the country."

Part of the problem is that much of the money borrowed is now in back accounts held outside the country, often in the Gulf.

Lists of defaulters' names have been put on exit control lists at airports.

Defaulters include senior politicians from all the main political parties, and major industrialists closely connected with ousted prime minister Nawaz Sharif.

Mr Sharif's own brother and his family owe Rs2.1bn ($40m), according to The News newspaper.

Recovering the loans has become a big test of the military's credibility.

The generals have promised to tackle both the dire state of the country's economy and the corruption pervading both government and business.

Transparency International, a Berlin-based anti-corruption watchdog, ranks Pakistan as the 12th most corrupt country in the world, alongside Cameroon, Nigeria and Indonesia.
 
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nothing.gif

Thursday, October 14, 1999 Published at 15:19 GMT 16:19 UK
Business: The Economy
nothing.gif

Pakistan's economic nightmare
_473661_karachi300.jpg

People have become disillusioned with Pakistan's economic progress
nothing.gif

Disaffection with the government of Nawaz Sharif over his failure to turn around the badly performing economy was a major factor in events leading up to the coup in Pakistan.
nothing.gif



Although the military had its own axe to grind with the prime minister, many people in Pakistan had become increasingly disillusioned with his handling of the economy.

Voters had elected Mr Sharif largely for his pledge to revive the economy. But, after two and a half years, foreign investment has dried up, prices are spiralling, foreign debt stands at $32bnagainst reserves of little more than $1bn, and unemployment is at an all-time high.

The International Monetary Fund had already suspended aid payments to Pakistan before the coup, demanding that the country first got its finances in good order.

Now, there is a danger that the coup could stop the flow of aid altogether. The IMF's managing director, Michel Camdessus, said the organisation would not send any more aid to Pakistan until democracy was restored.

He said that when the international community suspended aid to a country, IMF aid was also "interrupted". He also said he was "worried" by the coup in Pakistan, calling it a "real threat".

The country to watch is the United States. Its opinion counts a lot in international financial circles, and the US State Department's spokesman, James Rubin, has already said the coup would make it impossible for Washington "to carry on business as usual in Pakistan".

He said the United States wanted to see "the earliest possible restoration of democracy in Pakistan".

That could indicate that President Clinton will review his plan to visit Pakistan, India and Bangladesh early next year.

The trip was postponed last year when both India and Pakistan conducted underground nuclear tests.

They resulted in US-led economic sanctions, exacerbating the downward spiral of the Pakistan economy.

When the sanctions were later relaxed as Pakistan teetered on the brink of defaulting on its debt repayments, Mr Sharif's government tried to strike a deal with the IMF over further aid.

Some of the reforms demanded by the IMF were introduced, but they did not go far enough to stop the economic decline because of powerful opposition at home.

Lol "real threat" Ka bacha. The coup carried Pakistan into the next 11 emerging markets with having at least 5% GDP growth, kick started IT industry, created jobs, infrastructure projects were being built and not to mention the emergence of Gwadar port etc. If a lousy democracy like that was still in place Pakistan would be FAR worse than it is today. I swear if Raheel sharif was ruling Pakistan things would be quite different. Democracy is not for everyone. Why impose a political system that CLEARLY does not work and therefore hold any value in a country especially when a general is more beloved than a PM. It would have been excellent if the two clown of brothers were hanged.
 
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One year after the Musharraf coup
A beleaguered Pakistan military regime faces mounting criticism
https://www.wsws.org/en/articles/2000/11/pak-n21.html

By Vilani Peiris
21 November 2000

Last month marked one year since General Pervez Musharraf ousted the elected Pakistani government, arrested prime minister Nawaz Sharif and installed his own military regime. Accusing the previous government of corruption and ruining the economy, Musharraf promised to bring economic progress and political stability, eradicate poverty, build investor confidence and restore democracy as quickly as possible.

Twelve months later none of these promises have been fulfilled. The economy is still on a knife-edge and there is growing popular discontent with falling living standards and the lack of basic democratic rights. The regime is under fire not only from the political opposition but also from its supporters in the ruling elites including among the military top brass.

At the end of October, a meeting of key military commanders grilled Musharraf over the record of his administration. According to an Agence France-Presse report: “Political and diplomatic sources said that the commanders discussed plans to appoint a civilian prime minister to deflect public anger from the military, should the situation deteriorate further.”

Musharraf responded by saying: “If we were not performing, I would be the first person to be thinking of ways to bring in somebody who can run the country.” Summing up the continuing crisis, he said: “Pakistan is seriously ill... Pakistan may be difficult to govern, especially in view of the internal and external situation. The more so when there is talk of extremism, nuclear issues, drugs, Kashmir and Afghanistan.”

The schisms in the military reflect the pressure that the regime is under both domestically and internationally. While the US and other major powers tacitly accepted the coup, they have become increasingly critical of Musharraf's failure to carry out the IMF's economic measures, to crack down on Islamic fundamentalism and defuse the conflict with India over Kashmir. The US has effectively blocked IMF loans and has still not lifted economic sanctions imposed on Pakistan after its 1998 nuclear tests.

An editorial in the British-based Economist magazine entitled “Pakistan's useless dictator” gave a scathing assessment of Musharraf's one year in office. “Pakistan's economic woes have not shown much improvement. Pakistan has failed to persuade the IMF to hand over any fresh money since April, and is unlikely to do so until the government comes up with a system of casting the tax net more widely. At the moment, barely 1 percent of the country's population of 150 million pays any tax at all.”

An article in the Washington Post headed “Just another dictator” was just as blunt.”[G]eneral Musharraf has largely ducked the challenge of economic reform, though good harvests boosted growth fortuitously. He has turned a blind eye to corruption within the military. He has failed to take a tough line against Islamic militants. He has done nothing to reduce the biggest danger to his country, which is a war with India.”

The growing impatience with Musharraf does not concern the country's lack of democracy but rather reflects shifting strategic relations on the Indian subcontinent. During the Cold War, the US backed a string of military dictatorships in Pakistan as a counter to the diplomatic relationship of India with the former Soviet Union and as a base of operations to support Islamic fundamentalist guerrillas against the Soviet-backed regime in Afghanistan. But over the last two years, the Clinton administration has made a marked shift toward ties with India as its number one economic and strategic partner in the region. As a result, relations with Pakistan have been significantly downgraded.

Last year the US signalled its tilt towards India by demanding that armed Islamic guerrillas, covertly backed by the Pakistani military, be withdrawn from the strategic high points seized inside the Karl region of India's Jammu and Kashmir. Former prime minister Sharif's decision to bow to the US provoked considerable anger among Pakistan's generals and Islamic extremist groups and prompted the coup by Musharraf, who was also able to exploit growing opposition to IMF measures being implemented by Sharif, including the imposition of an unpopular sales tax.


Clinton's visit to the Indian subcontinent earlier this year revealed just how much Pakistan is being left out in the cold. The president spent four days in India holding extensive talks with government and business leaders, and just a few hours in Pakistan, to lay down the law to Musharraf. The US is demanding that Musharraf put pressure on the Taliban regime in Afghanistan to hand over the Saudi billionaire Osama bin Laden, whom the US claims was responsible for the terrorist bombing of US embassies in Kenya and Tanzania.

Economic stagnation
Musharraf's junta confronts serious debt problems as a result of the IMF's repeated delays in dispersing $US1.56 billion in loans. Furthermore without the IMF's backing, Pakistan has been unable to reschedule its $38 billion in foreign loans and risks defaulting. The country's foreign debt is equal to half its Gross Domestic Product (GDP) and repayments of $5 billion are due by the end of the year. According to official records, Pakistan's foreign exchange reserves consist of a bare $1 billion but, according to some foreign analysts, they may be as low as one third of that figure.

There is extreme nervousness in Pakistani financial circles. When the rumour spread at the end of October that the country was going to be turned down again by the IMF, the Karachi stock market index suddenly dived by 43 points from 1,545 to 1,502. Musharraf tried to pacify the markets by declaring: “We want to achieve a self-reliant economy not dependent on loans from anyone.” At the same time, however, he has been desperate to satisfy the IMF's requirements in order to obtain much-needed finance.

The IMF's main demands are for tax reform, including a general sales tax (GST), the acceleration of privatisation and land reform aimed at releasing land for big enterprises. Musharraf attempted to implement a GST but, like the Sharif government, ran into protests and opposition from small shopkeepers and was forced to water down the plan.

The general has declared that he will privatise one asset a month and hopes to receive $4 billion from the sales. A number of major enterprises, including Pakistani Telecommunication, state-owned banks and industrial units, are slated for sale by the end of the year.

The living standards of workers and the poor have declined markedly due to inflation, cutbacks in government expenditure and continuing high levels of unemployment. In August, government-controlled oil prices went up by 23 percent and the Pakistani rupee has depreciated by 9.5 percent since July. Over the last year the price of sugar, wheat flour and tea has trebled and the cost of other basic household consumer goods has risen by 30 percent.

According to one economic report: “The economy is anemic. Gross Domestic Product grew a mere 2.7 percent last year, which barely outpaced the 2.6 percent rise in the population. GDP per capita is only $450. Eighty-five percent of Pakistanis live on less than $2 a day. More than half of the population over the age of 15 is illiterate. Infant mortality is 91 per 1,000 live births.”


Pakistan spends only 2.7 percent of its GDP on education and less than 1 percent on health, which taken together amount to less than the 4 percent spent on the military. Economic restructuring and privatisation has led to significant job cuts. More than 5,600 jobs will be slashed at the state-owned Pakistan Steel prior to privatising and the restructuring of state banks will result in the number of bank workers being cut from 20, 534 to 14, 900.

There have been protests against job losses, cutbacks to welfare, tax changes and skyrocketing prices. The Pakistan Workers Federation launched a campaign against price hikes for oil, gas and electricity in the last budget and private sector workers have been demanding wage increases. Small traders are continuing their protests against tax changes through which the government plans to lift its income by 43.8 percent.

To impose its policies the military regime resorts to outright repression, making a mockery of its claims to be returning Pakistan to democracy by 2002. Under the National Accountability Ordinance, the junta can detain its political opponents for up to 90 days without charge. Two former ministers, Mushahid Hussain and Chaudhry Nisar Ali Khan, have been held since the coup without being charged.

Sharif was put on trial in a special anti-terrorism court on trumped-up charges of hijacking and terrorism, predictably found guilty and sentenced to life in jail. Musharraf accused Sharif of trying to kill him by preventing his plane from landing on its return from Sri Lanka. Last month, the Sindh High Court turned down Sharif's appeal against his conviction and the case may go to the Supreme Court. The military regime has replaced judges who refused to recognise the legitimacy of the coup.

Kulssom Sharif, the former prime minister's wife, faced threats when she attempted to launch a protest campaign against Musharraf. All males in her family have been taken into custody and her telephones disconnected. Former prime minister Benazir Bhutto, opposition leader under Sharif, continues to live in exile.

Bhutto's Pakistan Peoples Party (PPP) and Sharif's Pakistan Muslim League (PML) have been in negotiations over a common campaign to restore democracy but cooperation between these bitter rivals is limited. Both parties declared October 12 a “black day” and announced protests that were suppressed by the military, with more than 100 people detained.

The US-based Human Rights Watch has recently issued a report citing detailed cases of the military's arbitrary detention and torture of political opponents. One case involved Rana Sanaullan, a member of the provincial assembly in Faisalabad, who was detained and tortured. “They put rope through my handcuffs and hung me up by it, so that my face could barely touch the ground,” he explained. “A person whose presence I could sense in front of me ordered ‘Five-Five,' within no time, cutting into the air, a whip hit my back... A doctor checked my pulse and heart beat. The whipping man resumed and he had another four rounds.”

An editorial in the Dawn newspaper on October 31 explained that the prisons were like “pressure cookers,” overcrowded with detainees and known for a culture of brutality. There has been a series of prison riots and rebellions—at Dera Ghesi Khan's Central Jail in August, in Hyderabad's prisons in September and at Peshawar Central Jail last month.

As the regime's grip on power has become increasingly fragile, Musharraf has relied more heavily on the notorious Inter-Service Intelligence (ISI)—the country's military intelligence agency. The general's chief of staff is General Gulam Ahamed who has served with the ISI. A former ISI head was taken out of retirement to become defence secretary while another former intelligence chief serves as communications minister. Lieutenant General Aziz Khan, also from the ISI, was recently promoted to deputy military chief.

All of the evidence points to a regime with a rapidly dwindling base of support. Its only answer to protests and opposition is more repression. Musharraf may have seen out one year, but it is debatable whether his regime will survive another.

Lol "real threat" Ka bacha. The coup carried Pakistan into the next 11 emerging markets with having at least 5% GDP growth, kick started IT industry, created jobs, infrastructure projects were being built and not to mention the emergence of Gwadar port etc. If a lousy democracy like that was still in place Pakistan would be FAR worse than it is today. I swear if Raheel sharif was ruling Pakistan things would be quite different. Democracy is not for everyone. Why impose a political system that CLEARLY does not work and therefore hold any value in a country especially when a general is more beloved than a PM. It would have been excellent if the two clown of brothers were hanged.

Democracy works and we can see it in Afghanistan, Iraq, US facing 17 Trillion Debt..crisis in Europe..Crisis in Eurozone..while i spent 30 Years in Saudi Arabia.i can boldly say that despite up's and down's Saudi has always been the place to make stable money..because a stable and predictable government makes for higher investor confidence...there is no bigger night mare for an investor than an unpredictable democratic government which hinders growth by high taxation...
 
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And in 2016, General Pervez Musharaf, himself flee from country. He is charged as Traitor and who derailed democratic system in the country, helped US invading forces to capture Afghanistan, in retaliation from the natives of Afghanistan & within Pakistan - Pakistan completely damaged its industries & internal security system. 10 times more than US soldiers casualties, Pakistani forces sacrificed their lives, over 2.5 million Pakistanis became IDPs and thousands killed in terror attacks, Pakistan GHQ was targetted during Pervez Musharaf tenure. Unknown large number of children were killed in Lal Masjid Islamabad to please USA, Pakistan's top judges put into home custody, Pakistan's top scientist disgraced by the Chief Martial Law Administrator & propagated against Pakistan with charges as supply base of terrorism, etc. etc.. This person must be brought into country and the GHQ should prosecute him for puting Pak Defense Forces into dangerous situation, damaging Defense Forces & Pakistan's internal / External security.
 
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And in 2016, General Pervez Musharaf, himself flee from country. He is charged as Traitor and who derailed democratic system in the country, helped US invading forces to capture Afghanistan, in retaliation from the natives of Afghanistan & within Pakistan - Pakistan completely damaged its industries & internal security system. 10 times more than US soldiers casualties, Pakistani forces sacrificed their lives, over 2.5 million Pakistanis became IDPs and thousands killed in terror attacks, Pakistan GHQ was targetted during Pervez Musharaf tenure. Unknown large number of children were killed in Lal Masjid Islamabad to please USA, Pakistan's top judges put into home custody, Pakistan's top scientist disgraced by the Chief Martial Law Administrator & propagated against Pakistan with charges as supply base of terrorism, etc. etc.. This person must be brought into country and the GHQ should prosecute him for puting Pak Defense Forces into dangerous situation, damaging Defense Forces & Pakistan's internal / External security.
Really GHQ was attacked during Musharraf era....really? The only mistake he made was prioritizing Pakistan's interests first

Normally people would demand Peace, Security, employment and freedom from a government, Musharraf was providing these through any means, but our people decided about these not as important as supporting the corrupt CJ, coming on roads in support of corrupt politicians who as of today are in power, resistance against Lal masjid as clearly we thought it's an attack on ISLAM and out faith was in danger... Yet some how we don't feel responsible for our own demise but surely we are ready to blame every thing on USA and musharraf.
 
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When ever US interests increased in the region, and Military Dictator took over!

Its the Fact of History and u cant be able to Deny that.
 
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1.) National economic growth has to be correlated with the global economic climate --- Mush came at a time when the global economy was quite healthy. Then the 2008 financial meltdown happened --- around the same time that this traitor was ousted (I also call most political leaders traitors, btw). Of course PML N and PPP are no better.

2.) While he jailed/exiled PPP and PML N leaders, Mush aligned himself with PML Q (just as corrupt; I know some of the kids of that family personally) and MQM (which the Army claims is a RAW-backed militant party; also responsible for absurd levels of targeted assassinations of police officers and extortion which we all know about --- except Musharraf, who obviously felt that allying with RAW-backed militant extortionists is the most patriotic thing to do). Good job cleansing the country.

3.) What about Kalabagh Dam? He announced it, and should have seen its completion, especially given his "commando" reputation of getting things done.

4.) You cannot hold Musharraf against the same yardstick as you do politicians. Mush had the unique advantage and luxury of (at least initially) being able to pass and implement any law without the nuisance of Parliament (without the need to tackle friction caused by the Opposition or vested interests) --- so we must hold him against a much higher and much more stringent standard. For example, ground-up police and civil service reforms (radical in nature) should have but did not happen. It is very hard to do these in a democracy because of vested interests --- most politicians gain illegal benefit through these services.

5.) "Importing" a PM who later starts to work as a financial consultant for an Indian steel giant speaks volumes of his ability to pick strong, patriotic leaders.

Was Mush all-bad? Of course not.

But his achievements need to be seen in the context of the global arena.

And his massive shortcomings and mistakes need to be discussed.

Where US interests increased in the region, and Military Dictator took over!

Its the Fact of History and u cant be able to Deny that.

Exactly!
 
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I really hope Raheel Shareef finds it in him that when there is state Vs constitution ... State is more sacred. Constitution is not serving state it is protecting corrupt and powerful.. through injustice....We need to rush to save the state and only Army has the means in terms of man power and influence to take down flawed democratic system...... there isn't anything democratic about or current governing system anyway ... so why bother...
 
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I really hope Raheel Shareef finds it in him that when there is state Vs constitution ... State is more sacred. Constitution is not serving state it is protecting corrupt and powerful.. through injustice....We need to rush to save the state and only Army has the means in terms of man power and influence to take down flawed democratic system...... there isn't anything democratic about or current governing system anyway ... so why bother...

Brother,

Who is raheel sharif, why we always look towards our Cheif of Army staff? why not towards cheif of Air staff, Cheif of Naval Staff??

Raheel sharif is COAS, and he is a gentlemen and professional soldier, his tenure is ending! and never ever appreciate his extension, time always runs, and new people will always be welcomed!
 
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Sharifs used paper mill to whiten money, Dar told court in 2000
— PUBLISHED NOV 13, 2009 12:00AM

ISLAMABAD, Nov 12 The Musharraf government prepared a money laundering reference against PML-N leaders Mian Nawaz Sharif and Mian Shahbaz Sharif in 2000 on the basis of a statement recorded by one of their trusted lieutenants, Senator Ishaq Dar, according to a court document seen by Dawn here on Thursday.

Senator Dar's handwritten statement, given before a magistrate back on April 25, 2000, had alleged that Sharif brothers used the Hudaibya Paper Mills as cover for money laundering during the late 1990s.

The reference was prepared on the orders of then president Pervez Musharraf, but it was shelved after the Sharif brothers went into exile in December of the same year.

The Musharraf government tried to reopen the reference in 2007 after Nawaz Sharif announced his return to the country.

The confessional statement of Senator Ishaq Dar was recorded before a district magistrate in Lahore. He was brought to the court from a jail by Basharat Shahzad, who was then serving as assistant director in the Federal Investigation Agency (FIA).

According to legal experts, the senator's deposition was an 'irrevocable statement' as had been recorded under section 164 of the Criminal Procedure Code (CrPC).

Senator Ishaq Dar has always been regarded as one of the closest aides of the Sharif family, and is now also a relative as his son is married to Nawaz Sharif's younger daughter.

However, the NAB record clearly shows that back in 2000 he had agreed to give a written statement against the Sharifs about their alleged involvement in money laundering.

The top PML-N leaders had hit a rough patch by then as some of their lieutenants were busy developing a new political system for Gen Pervez Musharraf after his Oct 1999 military coup.

In the statement, Ishaq Dar accused Nawaz and Shahbaz Sharif of money laundering in the Hudaibiya Paper Mills case. At one point in the 43-page statement, Mr Dar said that on the instructions of Mian Nawaz Sharif and Shahbaz Sharif, “I opened two foreign currency accounts in the name of Sikandara Masood Qazi and Talat Masood Qazi with the foreign currency funds provided by the Sharif family in the Bank of America by signing as Sikandara Masood Qazi and Talat Masood Qazi”.

He said that all instructions to the bank in the name of these two persons were signed by him under the orders of “original depositors”, namely Mian Nawaz Sharif and Mian Shahbaz Sharif.

“The foreign currency accounts of Nuzhat Gohar and Kashif Masood Qazi were opened in Bank of America by Naeem Mehmood under my instructions (based on instructions of Sharifs) by signing the same as Nuzhat Gohar and Kashif Masood Qazi.”

The document shows Dar stated that besides these foreign currency accounts, a previously opened foreign currency account of Saeed Ahmed, a former director of First Hajvari Modaraba Co and close friend of Dar, and of Mussa Ghani, the nephew of Dar's wife, were also used to deposit huge foreign currency funds provided by “the Sharif family” to offer them as collateral to obtain different direct and indirect credit lines.

Senator Dar had disclosed that the Bank of America, Citibank, Atlas Investment Bank, Al Barka Bank and Al Towfeeq Investment Bank were used under the instructions of the Sharif family.

Interestingly enough, Ishaq Dar also implicated himself by confessing in court that he — along with his friends Kamal Qureshi and Naeem Mehmood — had opened fake foreign currency accounts in different international banks.

Mr Dar said an amount of $3.725 million in Emirates Bank, $ 8.539 million in Al Faysal Bank and $2.622 million were later transferred in the accounts of the accounts Hudaibya Paper Mills.

He said that the entire amount in these banks finally landed in the accounts of the paper mills.

The Hudaibiya Paper Mills case is still pending in the National Accountability Bureau.

If it is opened again, the Sharif brothers may be in for a rude shock a confidant is to blame for the albatross around their necks.

In this regard Dawn made repeated efforts to contact Senator Dar on telephone, but without luck as his mobile number was switched off and he did not reply to text messages.

However, a PML-N spokesman Siddiq ul Farooq alleged that the signed statement was extracted from Mr Ishaq Dar under duress.
 
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