From the Wall Street Journal (Thursday February 26, 2009


Pakistan's Leader Stirs Fresh Turmoi


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By
<http://online.wsj.com/search/search_center.html?KEYWORDS=MATTHEW+ROSENBERG&
ARTICLESEARCHQUERY_PARSER=bylineAND> MATTHEW ROSENBERG and
<http://online.wsj.com/search/search_center.html?KEYWORDS=ZAHID+HUSSAIN&ARTI
CLESEARCHQUERY_PARSER=bylineAND> ZAHID HUSSAIN


ISLAMABAD -- When Asif Ali Zardari won the presidency last year, he vowed to
unite this fractious country after nearly a decade of military rule.
Instead, Mr. Zardari is emerging as a divisive figure at a time when
Pakistan faces a rising Islamist insurgency and a stuttering economy.

The widower of slain former Prime Minister Benazir Bhutto is alienating both
allies and foes. Even his personal style has turned off supporters of his
wife -- some of whom serve in his government but are now reluctant to deal
with him directly. At meetings in recent months, according to several
witnesses, he lashed out at senior ministers, calling one a "witch" and
another "impotent."

Protests in Pakistan

View Slideshow <http://online.wsj.com/article/SB123561113179577559.html> 

 <http://online.wsj.com/article/SB123561113179577559.html>
[SB123558126895873541]

Associated Press 

Sharif's supporters protested in Rawalpindi Wednesday.

On Wednesday, Pakistan was plunged into fresh political turmoil when the
Supreme Court barred from elected office former Prime Minister Nawaz Sharif,
the country's leading opposition politician, citing a past criminal
conviction. The court also barred Mr. Sharif's brother, Shahbaz Sharif, from
office, effectively unseating him as chief minister of Punjab, Pakistan's
largest and most powerful province. Following the decision, Mr. Zardari
dismissed Punjab's state government and imposed executive rule in the
province, sparking demonstrations in several cities

"It is a political decision given on the directives of Mr. Zardari," Nawaz
Sharif, a former prime minister still popular across Pakistan, said at a
news conference at his residence in Lahore. "It is a conspiracy to keep me
out of politics."

Several government officials and Western diplomats say the friction caused
by Mr. Zardari's rule is weakening the government and diminishing Pakistan's
ability to solve the thicket of challenges it faces.

Wednesday's developments triggered a 5% drop in Pakistan's benchmark stock
index in Karachi on the expectation of political tensions and possible
street violence. The prospect of Mr. Sharif and his supporters leading a
campaign against Mr. Zardari is likely to concern Washington. The Obama
administration wants the president and his top officials focused on
countering the threat posed by al Qaeda and the Taliban -- not contending
with domestic political unrest.

Since taking over the presidency last September, Mr. Zardari has surrounded
himself with a small cadre of advisers, many of them unelected, including
family members and associates whom Mr. Zardari got to know in jail or in
exile, leaving even government officials unsure of who runs what. Among the
members of Mr. Zardari's inner circle: his former physician, Dr. Asim
Hussain, who in addition to running a hospital in Karachi is the
government's adviser on petroleum affairs and runs the oil ministry, despite
having no background in the industry.

Pakistan's Problems

.        Political Turmoil: Fresh tensions arose Wednesday after the Supreme
Court banned a key opposition leader from contesting elections.

.        Sputtering Economy: Pakistan was forced to seek a $7.6 billion
rescue package from the IMF in November.

.        Mumbai Fallout: November's attack on Mumbai, blamed on an Islamic
militant group based in Pakistan, set back peace efforts with New Delhi.

.        Taliban Troubles: In the Swat Valley, hours from Islamabad,
authorities agreed to impose Islamic law, yielding to a key demand of a
Taliban faction. The Taliban have stepped up attacks on convoys supplying
U.S. troops in Afghanistan.

More

.         <http://online.wsj.com/article/SB123555032830769401.html> Zardari
Imposes Federal Rule in Punjab

.         <http://online.wsj.com/article/SB123548899610559519.html> Taliban
Extend Truce, Gain Sway

Mr. Zardari, 53 years old, declined to be interviewed for this story. A
spokesman, Farhatullah Babar, said Mr. Zardari is seeking to bring the best
people into Pakistan's government. He also said the president had never
"used intemperate language" with colleagues.

"Far from endorsing infighting and general nastiness, President Zardari is
seeking to melt away the bitterness of the past," Mr. Babar said in an
email.


Concession to Taliban


In one recent controversial move, officials effectively yielded to a key
Taliban demand and agreed to impose Islamic law in the Swat Valley. The
region, located a few hours' drive northwest of the capital, until two years
ago was best known as an alpine weekend getaway.

The government of the North West Frontier Province, where Swat is located,
opted this month for a truce with the Taliban faction fighting in the
valley, even though a similar deal collapsed after only a few weeks last
year. Mr. Zardari initially opposed the deal, say officials. But with the
army losing ground, he concluded he had "no other option but to go along
with the decision of a beleaguered provincial government," one of his aides
said.

The truce stunned officials in Washington, who are concerned that the war in
Afghanistan will be undermined if the insurgents have a safe haven in
Pakistan from which to launch cross-border attacks.

Mr. Zardari emerged as Pakistan's most powerful politician in the wake of
Ms. Bhutto's December 2007 assassination. Previously, he was best known for
his love of polo and for corruption allegations that made the nickname "Mr.
Ten Percent" stick with the public. Mr. Zardari nonetheless led the PPP to
victory in elections last February.

Pakistan's mounting problems not only worry the new administration of U.S.
President Barack Obama. They also have contributed to a sharp decline in Mr.
Zardari's own popularity. Recent opinion polls indicate the president's
approval rating has sunk to a level near that of Pervez Musharraf, the
widely reviled former general ousted from the presidency by Mr. Zardari and
Mr. Sharif last summer.

[Pakistan President Asif Ali Zardari (pictured) has had a strained
relationship with his hand-picked prime minister, Yousuf Raza Gilani
(below).]Reuters 

Pakistan President Asif Ali Zardari (pictured) has had a strained
relationship with his hand-picked prime minister, Yousuf Raza Gilani
(below).

Even Mr. Zardari's relationship with his handpicked prime minister, Yousuf
Raza Gilani, has become strained of late, several government officials say.
Associates of Mr. Gilani say the prime minister has grown frustrated at Mr.
Zardari's failure to fulfill his promise to reduce the presidency to its
traditional role as head of state, allowing the prime minister to take a
bigger role in decision-making and appointments.


Mumbai Attack


Tensions came to a head in January. Mr. Gilani fired his national security
adviser, Mahmood Ali Durrani, for acknowledging that the sole surviving
gunman captured by India during November's terrorist attack on Mumbai was
Pakistani. Mr. Durrani was a close ally of Mr. Zardari and was fired days
ahead of a visit by Joseph Biden, then U.S. vice president-elect.

Within minutes of hearing the news, a furious Mr. Zardari phoned Mr. Gilani
to demand the move be reversed, one of the president's top aides said. When
Mr. Gilani refused, the president asked: "Can you wait at least till Joe
Biden's visit to Islamabad is over?" according to the aide. The prime
minister again refused.

Mr. Babar, the president's spokesman, said Mr. Zardari approved the national
security adviser's firing. He dismissed talk of a split between the
president and prime minister as the talk of "PPP haters who think that their
best chance to destabilize the system is to spread rumors of a rift within."

Mr. Gilani, in an interview during last month's World Economic Forum in
Davos, Switzerland, said his relationship with the president was "very
good." As for Mr. Durrani's firing, Mr. Gilani said the president "has to
approve it, and therefore that was approved."

But, he added, "I have to run the government. I'm the chief executive."

The infighting in the government contrasts with the tenor of government
under Mr. Musharraf. He became a U.S. favorite by keeping a lid on
intramural squabbles and making it clear he was the sole decision maker in
Pakistan.

[Yousuf Raza Gilani]Bloomberg News 

Yousuf Raza Gilani

Mr. Zardari's supporters say he remains determined to restore Pakistan to a
stable civilian democracy after nine years of Mr. Musharraf's
military-backed rule. He often cites as motivation the 11 years he spent in
prison in Pakistan on corruption and murder allegations. He says these were
politically motivated; most of the allegations were dropped under an amnesty
deal with President Musharraf.

On a February visit to Peshawar, the capital of the North-West Frontier
Province and a city beset by Taliban insurgents, he told a gathering of
tribal and political leaders: "I am myself a tribesman and know what misery
is. I have passed through all such traumas for 11 years in jail."

He added: "But I never compromised on principles and succumbed to a
dictator."

Western officials say they view Mr. Zardari's record of government to date
as mixed. They credit him with keeping the military focused on fighting the
Taliban and al Qaeda and providing intelligence to aid missile strikes on
the militants by U.S. drone aircraft. His position is a risky one because of
the widespread outrage in Pakistan over the attacks.


Military's Role


For now, there appears little prospect that the powerful military, which has
ruled Pakistan for much of its 62 years as an independent nation, will
intervene. It saw its morale and reputation battered in the final days of
Mr. Musharraf's rule. Gen. Ashaq Kayani, the army chief and a veteran
soldier, is determined to focus on fighting the militants and staying out of
public life, say senior civilian and military officials and Western
diplomats who often deal with him.

"I think there's a lot of patience in the services right now to let the
civilian government take its course," said an officer at Inter-Services
Intelligence, Pakistan's premier spy agency. "The patience won't last
forever but it will last for a long time."

Mr. Zardari has proved willing to back down on policy changes that Gen.
Kayani opposes. In November, Mr. Zardari announced that Pakistan was
adopting a "no first strike" policy for its nuclear arsenal. It was a
drastic change from the military's long stance of refusing to rule out a
nuclear first strike, a strategy designed to keep larger rival India off
balance. Pakistan's top military brass was livid.

Gen. Kayani immediately called Mr. Zardari to say Pakistan's nuclear
doctrine was "irreversible." The policy of vagueness was restored.


Fuel Subsidies


Early in his tenure, Mr. Zardari had won praise for making the tough call to
eliminate national fuel subsidies that were bankrupting Pakistan. When that
didn't stanch the flow of hard currency out of the country, he successfully
negotiated with the International Monetary Fund for $7.6 billion in loans
that staved off financial collapse.

"When I met the president in the spring, before he was president, I came
away thinking this is the man we need," said Munir Ladha, a former board
member of the Karachi Stock Exchange and the chairman of Eastern Capital
Ltd, a securities firm.

Mr. Ladha says he has since grown deeply disillusioned, pointing to the
government's failure to make good on a commitment to aid the collapsing
Karachi Stock Exchange. At the end of July, with shares plummeting, the
government pledged to create a $635 million fund that would buoy the market
by buying back stocks in seven government-owned companies.

Ultimately, the fund took months to materialize. By then the Pakistani stock
market had fallen sharply. The benchmark KSE-100 index is now hovering above
5,000 points, its all-time high of more than 15,000 points reached in April
2008.

The IMF said in a statement Wednesday that Pakistan is on track to comply
with the economic program agreed under the $7.6 billion credit facility
granted in November. But it added that the deterioration in the global
economy required Pakistan's government to "recalibrate" its fiscal and
monetary policies.


In the Red Zone


Today, Mr. Zardari rarely ventures outside the presidential palace, deep in
Islamabad's heavily secured "Red Zone," down roads blocked off from regular
traffic by police checkpoints and cement barricades. Traditions such as
visiting a local mosque during major holidays have been discarded. Mr.
Zardari and top officials instead held this year's prayers for Eid al-Adha,
a major Muslim holiday, inside the palace.

Presidential aides say security concerns keep him inside the Red Zone and he
does his best to regularly meet with ordinary Pakistanis and local
politicians inside the palace. "Never before has the presidency been opened
to all cross sections of the diverse public," said Mr. Babar.

Some of those who visit him there, however, say they are frequently
subjected to boorish behavior.

At a meeting in mid-January, Mr. Zardari taunted Sen. Raza Rabbani,
Pakistan's provincial coordination minister, calling him "impotent" after
the two disagreed on how to approach allied political parties about running
certain candidates in upcoming Senate elections. "You always say no, and
that is a reason why you don't have children," the president told the
55-year-old senator, according to multiple witnesses.

In previous meetings, Mr. Zardari has called a senior cabinet minister a
"witch" on many occasions. He has told others to "shut up" or mocked their
personal foibles, divorces, affairs. "This is what you come to expect at the
presidency. You go there and you are insulted," said another senator who was
at the mid-January meeting. .

Officials say his behavior is putting off people to the point where they
actively try to avoid working with him. That is keeping the government from
getting things done, they say, citing everything from shaping economic
policy to deciding the future of the tribal areas, which are ruled by the
federal government.

Mr. Babar said such criticisms were motivated by opposition to the
president's reform agenda. He described Mr. Zardari's approach to leadership
as, "Forgive but do not forget the past, arrange for the present and face
the future."

-Marc Champion contributed to this article. 

Write to Matthew Rosenberg at [log in to unmask]

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