MGPK02: SITREP 6: CALM BEING RESTORED; ELECTION

C O N F I D E N T I A L SECTION 01 OF 02 ISLAMABAD 005410

SIPDIS

SIPDIS

E.O. 12958: DECL: 12/31/2017
TAGS: PGOV PK PREL AEMR AMGT ASEC CASC KFLO MARR
SUBJECT: MGPK02: SITREP 6: CALM BEING RESTORED; ELECTION
DECISION DEFERRED; STOCKS DROP

REF: ISLAMABAD 5393

Classified By: Anne W. Patterson, Reasons 1.4 (b),(d)


1. (C) Summary: Pakistan today slowly returned to life after
three days of mourning for Benazir Bhutto. Major cities were
largely quiet December 31, with most businesses open and
public transportation running. Pakistan's Election
Commission deferred to tomorrow a decision on whether
elections can occur January 8. Pakistan People's Party (PPP)
leader Makhdoom Amin Faheem is meeting with Musharraf tonight
regarding election timing. Opposition parties, including
Pakistan People's Party are committed to contesting elections
on time, but there are logistical hurdles, especially in
Sindh where several election offices were torched over the
weekend. Trading on the Karachi Stock Exchange has been
suspended for today due to a five percent drop in trading.
The GOP agreed to a Scotland Yard investigation of the Bhutto
assassination, but we have no confirmation that a request has
been conveyed to the U.K. Embassy and consulates returned to
regular operations. End summary.

Calm Being Restored
--------------


2. (SBU) After three days of mourning (and violent riots),
Pakistan's cities were relatively quiet December 31, with
some small demonstrations randomly occurring. CGs Peshawar
and Lahore report a return to "normalcy," with most shops,
gas stations and other businesses open and city public
transportation running. Islamabad and Rawalpindi have been
normal. There were reports late December 31 of sporadic
violence in Karachi related to rumors of attacks on the
Muttahida Quami Movement's (MQM) headquarters. National and
international (to/from India) train lines are also re-opening.

Election Decision Deferred
--------------


3. (U) Pakistan's Election Commission (ECP) postponed to
January 1 a decision on whether the scheduled January 8
general elections could go forward. It has asked for reports
from provincial governments and ECP branch offices.


4. (U) Sindh's provincial election commissioner has already
stated that several district offices were torched over the
last three days, destroying ballot boxes and voters' lists.
The printing of ballots has also been delayed. The Sindh
official doubted elections could be held on time in these
areas, estimating that three weeks were needed to get back on
schedule.


5. (SBU) Pakistan People's Party (PPP) decided December 30 to
go forward with elections on schedule. In light of this
decision, fellow opposition Pakistan Muslim League-Nawaz
(PML-N) confirmed December 31 that it, too, will contest
elections (contrary to Nawaz Sharif's publicly-stated
inclinations on December 27). Jamiat Ulema-e-Islam (JUI-F)
leader Fazlur Rehman was quoted as "favoring a slight delay"
in elections. Musharraf's Pakistan Muslim League party is
prepared to delay elections until mid-February.

The Investigation
--------------


6. (C) Pakistan's National Security Advisor Tariq Aziz to the
Ambassador December 31 that it will abide by a Bhutto family
request and have Scotland Yard conduct an independent
investigation of Bhutto's assassination. However, the U.K.
has not received any request so far. The press is full of
conspiracy theories. Several home videos that purport to
show various versions of the assassination are being shown on
local TV.

Karachi Stock Exchange Drops
--------------


7. (SBU) The Karachi Stock Exchange's KSE 100 Index lost
647.9 points in heavy trading triggering the overall five
percent loss threshold, which suspended trading. Trading
will resume tomorrow. The KSE 100 index fell from 14772.08
to 14077.16 overall. This drop is not unique in comparison

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to past market reactions to other major, national crises, and
the KSE 100 is still up about 40 percent for the year.
PATTERSON