FACTBOX-Key political risks to watch in Pakistan=2
10 Dec 2011 04:10
in India. An attack with Pakistani fingerprints could spark serious confrontation.
ECONOMIC REFORM AND INFRASTRUCTURE
Pakistan's cabinet unanimously decided on Nov. 2 to grant India Most Favoured Nation (MFN) status, a major breakthrough that could bolster efforts to improve relations between the nuclear-armed rivals.
There are hopes that progress in trade ties will help bolster a fragile peace process, which the two resumed in February, with political implications likely to outweigh any practical benefits.
The two countries' commerce ministries say trade could easily triple in three years, which could help shore-up Pakistan's rickety economy.
The Pakistani rupee has continued to drop against the dollar, recently hitting repeated lows, and the country's economy is propped up by an $11 billion loan programme from the International Monetary Fund (IMF), as well as aid from donors including the United States.
Pakistan has said it will not seek a new loan programme or an extension to the loan, because it had no immediate balance of payments crisis, a move analysts say is a risk.
Pakistan's economy is still highly vulnerable to widening deficits, and bold moves based on false optimism could possibly lead to a downgrade from ratings agencies.
What to watch:
-- The level of donations for flood relief. Paltry donations could signal that donors are losing patience with Pakistan on many issues. (Editing by Daniel Magnowski)
FACTBOX-Key political risks to watch in Pakistan
01 Aug 2011 09:03
By Rebecca Conway
ISLAMABAD, Aug 1 (Reuters) - The raid by U.S. Special Forces in Pakistan on May 2 that killed Osama bin Laden continues to exacerbate the strain in relations between the United States and its ally in the war against militancy.
Washington is dismayed that the al Qaeda leader managed to live undetected in a Pakistani town, and such is the uncertainty surrounding Pakistan's willingness to take certain steps to help fight militancy that Congress has deferred $800 million in military assistance to Pakistan, though both sides have moved to mend rifts in the relationship.
RATINGS (Unchanged from July unless stated):
MOODY's: B3
S&P: B-
Here is a summary of key risks to watch in Pakistan:
INTERNAL SECURITY
Random violence and targeted killings continue to shake the southern port city of Karachi, Pakistan's key financial hub.
The situation has escalated, with political and sectarian violence accounting for at least 170 deaths in July. A recent report from the Human Rights Commission of Pakistan said 1,138 people were killed in Karachi in the first half of 2011, with 490 victims of political, ethnic and sectarian violence.
The violence and instability are a huge deterrent to foreign investment. Investors are particularly sensitive to attacks in Karachi, home to key financial markets and the central bank.
The frequency of attacks by militant groups fell in the second half of July, and the Pakistani army began an operation against militants in the Khurram tribal region.
Pakistan's military has yet to launch an operation against militants in the North Waziristan tribal area, something for the United States has repeatedly called.
What to watch:
-- Further attacks by militants. The assaults on high-profile military facilities have shown the continued ability of Taliban fighters to attack even protected targets.
POLITICAL VIOLENCE, GOVERNMENT WEAKNESS
Pakistan's government and military have appeared paralysed since the killing of bin Laden and the violence that has followed. The military, long seen as a powerful, and at times stabilising, force in Pakistan, has been ridiculed after a Taliban siege on the PNS Mehran naval air base in Karachi in May, which killed 10 members of the security forces.
Political leaders, many of whom are seen as incompetent and corrupt, have offered little guidance. President Asif Ali Zardari's government is weak, prone to splits, has limited control over the military and has failed to tackle corruption or reform the economy. Serious problems formulating and implementing policy will continue to deter investment.
What to watch:
-- Any operation in North Waziristan, a major sanctuary for the Haqqani network which is linked to al Qaeda. Its success is not assured and militant retaliation is likely to be bloody.
-- Attacks on politicians, and alliances forming between Islamist parties to challenge the government.
EXTERNAL SECURITY
A border incursion by a NATO helicopter and a series of drone strikes shortly after the bin Laden raid show the United States is unlikely to let up its attacks on militants thought to be hiding in Pakistan. Islamabad privately accepts the programme of U.S. drone strikes, but publicly condemns them.
Relations between Afghanistan and Pakistan have also faltered, with cross-border attacks across the Durand Line reported by both sides.
Afghan President Hamid Karzai and Pakistani counterpart Asif Ali Zardari met on July 19 amid the heightened tension between the neighbours, compounded by whispering from some Afghan lawmakers that Pakistan's spy agency, the Inter-services Intelligence (ISI), was behind recent assassinations in Afghanistan, something Pakistan vehemently denied.
Relations with India have also been shaken by the killing of bin Laden, with some Indian commentators questioning Pakistan's ability and will to contain militant activity.
What to watch:
-- Drone attacks. Any drone attack that results in high civilian deaths could further damage the U.S.-Pakistan relationship.
-- Attacks in India. An attack with Pakistani fingerprints could spark serious confrontation.
ECONOMIC REFORM AND INFRASTRUCTURE
Pakistan's economy is propped up by an $11 billion loan programme from the International Monetary Fund (IMF), as well as aid from donors, including the United States.
Pakistan negotiated a nine-month extension to the IMF programme, until Sept. 30, that would spread out the last two payments of approximately $3 billion of the original loan. This reflects the IMF's general tolerance of Pakistan's regular slippage on fiscal goals.
What to watch:
-- Status of IMF loan disbursements. Pakistan expected the last two tranches, worth more than $3 billion, to land by the end of 2010. But a delay in implementing tax reform meant payments have stalled as Pakistan faces a serious financial crunch from flood damage and declining foreign aid.
Those tranches are expected by Sept. 30, unless the government abandons the current programme and enters into a new one.
The IMF has delayed the payment of the sixth trance since August 2010 because of patchy implementation of fiscal reforms. IMF and government officials were due to meet in July but that was delayed, and no new date has been announced.
KEY DATES:
Early August - Ramadan starts
August 14 - Pakistan Independence Day (Editing by Chris Allbritton and Daniel Magnowski)
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President Zardari unlikely to return: Najam Sethi
Talking during his talk show, Aapas Ki Baat on private Geo TV, Sethi said that the memo-stirred controversy was of significant importance as far as the future of the incumbent government was concerned. He said that Dec 15 was vital, as a Supreme Court bench hearing identical petitions regarding the memo issue have sought replies from Chief of Army Staff, ISI Chief, President, Prime Minister and other respondents by that date.
He was of the opinion that President Zardari would monitor the developments from Duabi and incase of any adverse ruling on the memogate case, would prefer to stay abroad.
To a question he said that President Zardari would not resign, rather he would fight out his opponents politically.
Sethi said that President was under tremendous pressure from different quarters including military establishment and his political opponents. He said that in case of any unfavorable political development, Zardari would run and control party affairs from abroad.
He said that if there was a military coup over the memo issue, PPP chairman Bilwal Bhutto Zardari would be used to create reaction in Sindh and the prime minister would resign in protest against such extra constitutional step. He said that PPP had started to evolve its future strategy in the face of any military intervention.
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US wishes Zardari well, dismisses coup rumours
WASHINGTON: The United States Wednesday wished Pakistani President Asif Ali Zardari well after aides said he suffered a heart attack and dismissed rumours that the civilian leader was being pushed out.
“We have seen the reports. We certainly wish him a speedy recovery,” said White House spokesman Jay Carney.
Zardari’s illness sparked media reports that he is contemplating resignation, but loyalists ruled out the idea he may step down.
State Department spokesman Mark Toner, asked if the United States was worried that a quiet coup was underway against the embattled president, said: “No concerns and no reason to believe” the speculation.
“Our belief is that it’s completely health-related,” Toner told reporters.
Zardari is considered to have a fraught relationship((Marked by or causing distress; emotional:)) with the military, which historically has been Pakistan’s most powerful institution and has repeatedly pushed aside elected leaders.
Mustafa Khokhar, an adviser to Pakistan’s prime minister on human rights who sits in the cabinet, told AFP in Islamabad that Zardari suffered “a minor heart attack” on Tuesday.
“He flew to Dubai where he had an angioplasty. He’s in good health now,” Khokhar said.
“There’s no question of any resignation,” he added.
The 56-year-old head of state left Pakistan for treatment after falling ill in the midst of a major scandal over alleged attempts by a close aide to seek US help to limit the power of Pakistan’s military.
His illness also comes at a time of deep crisis for Washington’s fraught anti-terror alliance with Pakistan.
Ties between the United States and Islamabad plummeted after a US commando raid killed Al-Qaeda leader Osama bin Laden in the Pakistani garrison town of Abbottabad, north of the capital Islamabad, in May.
Relations slid to a new low last month when Nato air strikes killed 24 Pakistani soldiers on the Afghan border, prompting Pakistan to boycott an international conference in Bonn on Afghanistan’s future.
US President Barack Obama on Sunday expressed condolences to Zardari in a telephone conversation over the deaths but said the incident was not a “deliberate attack.”
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Rumours run riot: Zardari’s heart condition sets pulses racing by
ISLAMABAD: The times are such in Pakistan.
President Asif Zardari flew to Dubai on Tuesday triggering a seemingly endless stream of contradictory statements from his top aides, speculation from ‘insiders’ and ‘experts’, and wild conjecture that the county’s powerful security establishment was plotting to oust the embattled leader from office, leading to a frenetic day for those following the story.
What seemed to be lost in all the rumours was that the president had travelled for treatment for his heart condition.
A steady flow of contradictions
The first statement from the Presidency on Tuesday said Zardari had left for Dubai to visit his children and also to undergo some medical tests. According to the president’s personal physician, Colonel Salman, the proposed medical tests were of a routine nature.
It was reported by private television channels that Zardari was first taken to the Armed Forces Institute of Cardiology (AFIC) in Rawalpindi for an initial check-up and it was there that he was advised to proceed to Dubai.
The government initially denied that the president had visited a hospital before leaving the country by air-ambulance, but later admitted that he went to AFIC.
Zardari’s spokesperson Farhatullah Babar, however, denied reports that the president was first taken to any hospital for tests or treatment. Instead, Babar said the president held meetings with PPP leaders to review security arrangements for Ashura.
By Wednesday the story had been modified – enough to set the rumour mill in full motion.
Mustafa Khokhar, the human rights minister, made the blood pressure of political observers rise to alarming levels when he said Zardari had suffered a “minor heart attack” and was in Dubai for a small operation. Khokhar added that, despite media reports, there was “no question of any resignation” by Zardari.
Meanwhile, a statement from the prime minister’s office said Zardari went to a Dubai hospital at the insistence of his children, who live there. A Dubai-based member of the PPP, Mian Muneer Hans, said the president landed in Dubai around 7:30pm on Tuesday. “He walked to his car in the airport and was not in an ambulance.”
The Presidency still claimed it was business as usual. “Reports about the president’s health and activities are speculative, imaginary and untrue,” said the president’s spokesperson, denying a number of comments on television portraying different political scenarios.
PPP seeks to reassure country through Bilawal
Late on Wednesday, it emerged that the president’s son Bilawal Bhutto Zardari – also the chairman of the PPP – had arrived in Islamabad and chaired a meeting of the party’s top leaders in the evening.
According to political observers, this particular move appeared to be an attempt at showing the nation that there would be no political vacuum even if Zardari had to step down.
An official statement of the meeting’s conclusions was released – curiously, there was no mention of the armed forces or issues related to defence, despite the current situation revolving around the country’s heightened security situation.
Intrigue, conjecture and denials
Military sources told The Express Tribune that Zardari had a meeting with a top military official while at the AFIC in Rawalpindi and hinted that he might have had an exchange of “harsh words”. Although unconfirmed, this visitor is believed to have been army chief General Ashfaq Pervez Kayani.
On Wednesday a US magazine reported that Zardari might resign due to ill-health. In its report, The Cable quoted a former US government official saying that when US President Barack Obama spoke with Zardari recently regarding Nato’s killing of the 24 Pakistani soldiers, Zardari was “incoherent.”
The report claimed that Zardari was “feeling increased pressure over the Memogate scandal”, and quoted the official as having said: “The noose was getting tighter — it was only a matter of time,” expressing the growing expectation inside the US government that Zardari may be stepping down.
Another rumour doing the rounds said that the president was given two choices by the military: either to quit his brand of politics or face a trial under Article 6 of the Constitution that deals with high treason.
Islamabad was already abuzz with rumours that top military authorities had asked Zardari to shun high profile activities. Some commentators went to the extent that Zardari had nominated Senate Chairman Farooq Naek as his successor – though he was deemed unacceptable by the military.
However, senior members of the PPP rubbished this.
The president did take some desperate steps to give the impression that all was well, phoning Awami National Party chief Asfandyar Wali Khan about his plans to return.
Zardari has come under growing pressure over a memo allegedly written by close aide Husain Haqqani. The website of US magazine Foreign Policy reported that Zardari had been considering his resignation over the Memogate scandal.
There has been speculation that the ongoing row between the presidency and the military establishment had further intensified after the military came to know that the government had told the US it was ready to send representatives to the Bonn conference, but the military was standing in the way.
Dubai’s ruler, Sheikh Mohammad bin Rashed al-Maktoum, visited Zardari in hospital and wished him a “speedy recovery”.
(Read: The memo that opened the gates!)
(With additional input from wires)
Published in The Express Tribune, December 8th, 2011.
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Return plans: Memogate progress to shape Zardari’s homecoming
ISLAMABAD: President Asif Ali Zardari initially planned to return to Pakistan on Monday – but how the memogate case unfolds will determine when he ultimately does.
Insiders of the Pakistan Peoples Party (PPP) said the president is likely to have a brief stay in the country in order to dispel speculations that he has abandoned ship. “It all depends on how things unfold in the next two days. But according to the initial plan before he left, he is due to arrive this Monday,” sources in the PPP close to the presidency told The Express Tribune.
Following his short stay in Pakistan, he is likely to leave for another visit to a ‘friendly country.’
In the meantime, PPP members said that the party is burning the midnight oil to chalk out a strategy to deal with the lingering threat of the memogate scandal in the Supreme Court. Haqqani already filed his reply, which was rejected by the SC. Now the PPP is waiting for the armed forces’ reply to the court, they said.
“Different options are under consideration … a lot depends on the contents of the replies to be filed by the chief of army staff and director-general the Inter-Services Intelligence. His stay will be brief and he will leave once again for a ‘follow-up medical check up’ in case of an adverse situation,” sources said.
The Supreme Court, while taking up former prime minister NawazSharif’s petition on an alleged secret memo, had asked all respondents including the president, chief of army staff, director-general ISI, former ambassador to the US Husain Haqqani and US businessman Mansoor Ijaz to file their replies within two weeks.
It is not yet clear when army officials will file their replies or if they do, but sources claim that some backchannels are working to resolve the government-military row.
There have been conflicting reports on the nature of the president’s ailment, and PPP sources claimed that he had gone through some preplanned tests for his heart.
“He had a meeting with Prime Minister Gilani and the Senate chairman before leaving the country. There is no credence to the reports that he had fallen down in the presidency. But it is true that he is a heart patient,” another PPP leader said.
Gilani, meanwhile, said Zardari was out of intensive care and “making satisfactory progress so far as his health was concerned”.
Despite repeated queries from presidential spokesperson Farhatullah Babar and PPP Secretary Information Qamar Zaman Qaira, the president’s date of arrival could not be confirmed.
However, giving credence to reports of his arrival, Zardari reportedly told journalist Hamid Mir that he is “fine and will return soon.” Mir repeated the statement on state television. “I did not want to leave. My children and friends and the prime minister insisted that I go for a checkup.”
Zardari also appeared to acknowledge speculations regarding his resignation. ”Those that run from the country run with their kids,” Mir quoted the president as saying. “My son is in Pakistan. I left him there … my enemies will be disappointed.”
‘Away for a fortnight’
On the other hand, the UAE-based Gulf News, citing one of Zardari’s close aides at the hospital, said it could be more than two weeks before he returns home.
“He may leave the hospital and rest in his house under observation of doctors, but we want him to stay here because he needs rest”, the aide said.
Malik dismisses coup talk
In an attempt to counter frenzied speculation, Interior MinisterRehman Malik dismissed rumours that a coup could overthrow the government.
“We understand that the people have given us a mandate for five years, and if someone tried to do something, people would foil such attempts,” Malik said.
WITH ADDITIONAL INPUT FROM AGENCIES
Published in The Express Tribune, December 10th, 2011.
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FACTBOX-Key political risks to watch in Pakistan=2
10 Dec 2011 04:10
in India. An attack with Pakistani fingerprints could spark serious confrontation.
ECONOMIC REFORM AND INFRASTRUCTURE
Pakistan's cabinet unanimously decided on Nov. 2 to grant India Most Favoured Nation (MFN) status, a major breakthrough that could bolster efforts to improve relations between the nuclear-armed rivals.
There are hopes that progress in trade ties will help bolster a fragile peace process, which the two resumed in February, with political implications likely to outweigh any practical benefits.
The two countries' commerce ministries say trade could easily triple in three years, which could help shore-up Pakistan's rickety economy.
The Pakistani rupee has continued to drop against the dollar, recently hitting repeated lows, and the country's economy is propped up by an $11 billion loan programme from the International Monetary Fund (IMF), as well as aid from donors including the United States.
Pakistan has said it will not seek a new loan programme or an extension to the loan, because it had no immediate balance of payments crisis, a move analysts say is a risk.
Pakistan's economy is still highly vulnerable to widening deficits, and bold moves based on false optimism could possibly lead to a downgrade from ratings agencies.
What to watch:
-- The level of donations for flood relief. Paltry donations could signal that donors are losing patience with Pakistan on many issues. (Editing by Daniel Magnowski)
====================
Is Zardari under mly establishment’s radar even in Dubai?
President Zardari, whose abrupt departure to Dubai on December 6 for ‘medical checkup’ has led to widespread speculations back in Pakistan. Speculations and rumours were rife that the president was on his way out under the severe pressure of the powerful military establishment over the memogate scandal. However, the President himself and his aides are rubbishing the speculations and rumours as baseless and concocted.
But, well-placed sources while talking to The News Tribe claimed that the president’s Dubai visit was not just meant for just medical checkup, rather it was under a political strategy to deal with the memogate scandal.
They said that following the memo scandal, the distrust between the civilian and military establishment has widened and the military was reluctant to trust the president, who is also co-chairman of the ruling Pakistan People’s Party (PPP). The president is under tremendous pressure from the military to take those involved in the memo scandal to the task and the military is said to be using the scandal to force out the embattled president .
When in the midst of the scandal, the president decided to go to Duabi, the sources claimed, the establishment was not ready to allow him to leave for Dubai. However, they added, the president was allowed to go to Duabi only after the establishment made arrangements to monitor the president even there.
According to them, renowned American cardiologist Dr Arjumand Hashmi, who enjoy greater influence both in Pakistan’s military circle and US administration, was selected for the purpose and was summoned immediately to Dubai.
Dr Hashmi is also the mayor of Paris, a small city of Texas. Salma Hashmi, wife of his brother Hassan Farid Hashmi, has also remained mayor of a city of California. Hashmi family has access in top US administration and during Republican’s n regime Dr Hashmi was frequently spotted around President Bush.
The sources said that Dr Hashmi was currently in Duabi for treatment of Zardari, though he has never been a physician of President Zardari. But, he has been a personal physician of former president General Pervez Musharraf and has given one of his houses in Dallas to General Musharraf, where the former military dictator is currently residing along with his personal security staff provided by Pakistan military.
The sources claimed that in the Dallas house, Chief of Army Staff General Pervaz Kayani, former Ambassador Hussain Haqqani and Pakistan Tehrik-e-Insaf Chief Imran Khan had stayed in the past.
US-based commentators describing Dr Hashmi as a ‘proxy’ of military establishment, who will monitor President Zardari’s activities under the garb of treatment.
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US lawmakers freeze $700 mln to Pakistan over IEDS
13 Dec 2011 02:02
(Adds details throughout)
WASHINGTON, Dec 12 (Reuters) - The leaders of a U.S. House-Senate negotiating panel said on Monday they had agreed to freeze $700 million in U.S. aid to Pakistan until it provides some assurances of assistance in the fight against improvised explosive devices in the region.
The explosive devices are among militants' most effective weapons against U.S. and coalition troops in Afghanistan. Many are made using ammonium nitrate, a common fertilizer shipped across the border from Pakistan. The freeze on U.S. aid was agreed as part of a defense bill that is expected to be passed this week.
The United States wants "assurances that Pakistan is countering improvised explosive devices in their country that are targeting our coalition forces," Representative Howard McKeon, a House Republican, told reporters.
The United States has allocated some $20 billion in security and economic aid to Pakistan since 2001, much of it in the form of reimbursements for assistance in fighting militants.
But U.S. lawmakers have expressed increasing frustration with Pakistan's efforts in the war. There have been numerous proposals to make U.S. aid to Pakistan conditional on more cooperation in fighting militants such as the Haqqani network Washington believes operate out of Pakistan and battle U.S. troops in Afghanistan.
U.S. lawmakers allege that many Afghan bombs are made with fertilizer smuggled by militants across the border from Pakistan into Afghanistan.
"The vast majority of the material used to make improvised explosive devices used against U.S. forces in Afghanistan originates from two fertilizer factories inside Pakistan," Senator John McCain, a Republican, said in the Senate last week.
The provision freezing $700 million in aid to Pakistan was agreed upon by leaders of the armed services committees from both parties in the House and Senate, including McCain. It is part of compromise legislation authorizing U.S. defense programs expected to be approved this week, McKeon said.
He said the bill would also require the Pentagon to deliver a strategy for improving the effectiveness of U.S. aid to Pakistan. (Editing by Todd Eastham)
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