CABINET NEGOTIATIONS CONTINUE

1. (C) Summary. Internal leadership disputes continue to
plague the Pakistan People's Party (PPP), but Asif Zardari
appears to be focusing on a Punjabi -- either Yousef Gillani
or Shah Mehmood Qureshi -- as his choice for Prime Minister.
PPP leaders now hope there will be a new Prime Minister by
March 24. Negotiations to apportion ministries among the
coalition have bogged down over disputes between the PPP and
the Pakistan Muslim League-N (PML-N). Although they have
agreed on a formula for sharing ministries, final choices
will be announced only after the Prime Minister is announced.
The PPP is planning a "First 100 Days" populist program to
address power outages, food inflation and unemployment. End
Summary.

2. (C) Polcouns met separately March 18 with PPP leader
Sherry Rehman and PPP Senator Enver Baig. Baig, who is a
staunch supporter of PPP Vice Chairman and prime ministerial
candidate Amin Faheem was despondent over continued
intra-party leadership disputes and warned of coming splits
within the party. Baig confirmed that Faheem told Zardari he
would support him as PM, but if Zardari did not take the job,
then Faheem would not back down from his own demand to be PM.
As Baig explained it, the problem Zardari has with Faheem is
based more than anything on class differences. When Zardari
was young, he and Faheem's younger brother were good friends,
but both had to pay homage to Faheem's spiritual/feudal
position by literally kissing Faheem's feet. Today,
according to Baig, Zardari cannot contemplate ceding
authority to Faheem.

3. (C) Rehman, just back from ongoing consultations with
coalition partners, admitted negotiations to apportion
cabinet ministries were emblematic of the difficulties to
come. The new PM, she predicted, would face a difficult job
mediating coalition priorities. She said there would only be
38-40 cabinet ministries in the new government. Despite
winning only six seats, Jamiat Ulema-e-Islam (JUI-F) leader
Fazlur Rehman had demanded three ministries; the PPP was
reluctantly agreeing to give him one, relating to Kashmir.
The Awami National Party would get two ministries. The
Pakistan Muslim League-N (PML-N) was demanding all the plum
positions in Foreign Affairs, Interior, Defense and Finance.
Ishak Dar was adamant on getting Finance, and Rehman said the
PPP would probably concede this. She said she would happily
give up the Information Ministry to PML-N in exchange for a
more substantive portfolio but did not seem optimistic this
would happen. She confirmed rumors that PML-N's Nisar Ali
Khan wanted to be Foreign Minister.

4. (C) Unable to come to an agreement with PML-N, Rehman
said final decisions would be postponed until after the Prime
Minister is named. Later in the day, the PPP announced an
agreement on power sharing based on one ministry for every
six parliamentary members with added consideration given to a
party's Senate strength.

Prime Minister: Still Waiting


--------------------------



5. (C) When asked about Faheem and the continuing
controversy over his candidacy, Rehman simply shrugged and
said "it won't be Faheem--his chances are finished." Rehman
said, the party did not want to remove Faheem as president of
the PPP Parliamentarians, but "that would be up to him."
Acknowledging that Faheem may be working behind the scenes to
split from the party, she asked, "What can he do? He can't
form an effective forward block with 20-30 people."

6. (C) She confirmed that, by giving the National Assembly
Speaker and Deputy Speaker jobs to PPP representatives from
Sindh and the Northwest Frontier Province (septel), the Prime
Minister would have to be a Punjabi. She said that Ahmed
Mukhtar "has been talking too much" so the choice will be
between Shah Mehmood Qureshi and Yousef Gillani. She would
not say which one Zardari would choose. (Note: Zardari
earlier told Ambassador his choice would be Gillani. See
reftel) Rehman predicted that Musharraf would call the
National Assembly back into session over the weekend, and
said she hoped there should be a Prime Minister by Monday,

ISLAMABAD 00001219 002 OF 002


March 24.

7. (C) Rehman confirmed that Zardari plans to run in a
by-election and predicted that Nawaz also would run. But she
said that Zardari has no plans to become Prime Minister.

First 100 Days


--------------------------



8. (C) Rehman said she had drafted a "First 100 Days" plan
that would be circulated for coalition approval. It focused
on a populist platform of addressing power shortages, food
inflation and unemployment; all proposals were for quick
executive action rather than parliamentary consideration.
She acknowledged that the government was broke and said the
PPP had a team of economic experts studying how to address
the current cash crunch.

9. (C) Given the economic challenges and the issue of
restoring the judiciary, Rehman said the PPP would avoid
proposing changes to the National Security Council or other
actions that will be controversial with the military. "We
just don't need that on our plate right now." She indicated
the PPP might reconsider its options after the March 2009
Senate elections. On the judiciary, Rehman reaffirmed there
was an agreement between Zardari and Nawaz Sharif not to
reinstate former Chief Justice Chaudhry. Asked how they
would accomplish this, Rehman said they were working with
Chaudhry's "peers" to convince him to back down, but she was
not certain they would succeed. Rehman said that Aitzaz
Ahsan wanted to contest the by-election on a PPP ticket, and
the party would use that as leverage to restrain his activism
on behalf of Chaudhry.

USG Support


--------------------------



10. (C) Assuming the latest air strikes in Waziristan were
launched by the U.S., Rehman said "these don't help us." She
did ask for U.S. support in working in the tribal areas and
said the government may also need additional financial
assistance "later on." She welcomed Ambassador's offer to
brief the PPP and all the major parties on what the U.S. is
providing Pakistan in terms of economic and military
assistance, including training and equipment for the Frontier
Corps. Tackling extremism, Rehman noted, is a priority for
the PPP; she said that the Awami National Party was providing
good information on ground realities. The PML-N was adamant
that it didn't want to describe the problem as "terrorism"
and instead use the terms "extremism" and "militancy," which
the PPP had readily agreed to do. She agreed that it would
important for the new government to increase cooperation with
Afghanistan.

11. (C) Comment: Zardari appears determined to make the
announcement of Prime Minster on his terms and at a time of
his choosing. The PPP is rapidly coming to terms with the
fact that, given Nawaz's strength, coalition politics are
going to be complicated and difficult.


PATTERSON