MGPK01: SITREP 22, AMEMBASSY ISLAMABAD: BHUTTO

C O N F I D E N T I A L SECTION 01 OF 02 ISLAMABAD 004876 SIPDIS SIPDIS E.O. 12958: DECL: 11/16/2017 TAGS: AEMR AMGT CASC KFLO PGOV PINR PK PREL SUBJECT: MGPK01: SITREP 22, AMEMBASSY ISLAMABAD: BHUTTO RELEASED AGAIN REF: A. ISLAMABAD 4830 ¶B. ISLAMABAD 4842 Classified By: Deputy Chief of Mission, Peter W. Bodde, Reasons 1.4 (b) , (d) ¶1. (C) Summary: The government this morning released PPP leader Benazir Bhutto and human rights activist Asma Jahangir. Senate Chairman Soomro today was sworn-in as Pakistan's caretaker prime minister. Musharraf amended the Provisional Constitutional Order to give the president and not the Chief of Army Staff authority to lift the state of emergency. The Karachi Stock Exchange continues to experience volatility. Heavy fighting continues in Swat. The government allowed all news channels, except GEO and ARY, back on the air. Isolated protests and demonstrations continue. Political and criminal violence is growing in Karachi's Lyari neighborhood where three people were yesterday shot and killed. Mission offices continue to operate normally. End summary. ¶2. (C) The government of Pakistan (GOP) released Pakistan People's Party (PPP) leader Benazir Bhutto from house arrest early this morning. Bhutto has not yet decided whether she will leave Lahore today, according to a mission contact; Pakistan broadcast media reported she will travel to Islamabad. Lahore CG also confirmed the GOP this morning released Human Rights Commission of Pakistan chairperson Asma Jahangir from house arrest, but we have no news on Aitzaz Ahsan's detention. ¶3. (U) Senate Chairman Soomro today was sworn-in as Pakistan's caretaker prime minister (refA),as was a caretaker cabinet. This cabinet will sit until elections are held and a new government is formed. This is the first time in Pakistan's history that the assemblies have completed their full five year tenure. ¶4. (U) Musharraf amended the Provisional Constitutional Order (PCO) on Wednesday night, shifting the authority to lift the state of emergency from the Chief of Army Staff (COAS) to the president. This will allow Musharraf--and not his successor to the post of COAS--to lift the state of emergency as president after he steps down from his post in the Army. ¶5. (C) The Karachi Stock Exchange (KSE) is down 0.26% on the day's opening at 13,145. The KSE is down 2.1% from its close of 13,423 on November 9 for the week and is down 1.0% from the November 5 low of 13,279 after the government enacted the state of emergency. Observers believe the volatility will continue until elections. The continuation of Salman Shah as Finance Minister in the caretaker government should provide an important signal to the market and international financial community that current market-based economic policies will continue under the caretaker government. ¶6. (C) Heavy fighting continues in Swat after the Army launched a counter-offensive against militants there. It is unclear if the government intends to use these operations as justification to lift the state of emergency once the operations are well under way (refB). ¶7. (U) The government is now allowing all news channels, except for GEO and ARY, to be broadcast on cable. The government has allowed some media groups back on the air without signing PEMRA's code of conduct. ¶8. (U) Peshawar: Demonstrations by opposition parties including Jamaat-i Islami (JI),Jamiat-i Ulema-i Islam (JUI-F),Awami National Party (ANP),and PPP are expected today in Peshawar's downtown area and throughout the NWFP. Lawyers, journalists, and students yesterday continued their protests in Peshawar and several Frontier Province (NWFP) cities. In Peshawar, police yesterday reportedly used tear gas and baton-charges to break-up a PPP rally. In Battagram, police yesterday used similar tactics to disperse an ANP and JI sit-in that was blocking a highway. ¶9. (U) Karachi: Political and criminal violence is growing in Karachi's Lyari neighborhood where three people were yesterday shot and killed. Those killed include two boys (aged 9 and 12) and one PPP activist. The police have been given shoot-to-kill orders if attacked in Lyari, which is the ISLAMABAD 00004876 002 OF 002 center of PPP support in Karachi and the site of a long-term gang war between two large drug groups. Government arrest of PPP activists, opposition parties, and lawyers continued in Karachi, Hyderabad, Khaipur, and Larkana. ¶10. (U) Lahore: Approximately 3000 students at Punjab University yesterday protested against the student faction of the conservative Islamist JI party for beating up and detaining opposition leader Imran Khan. PATTERSON