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08ISLAMABAD226 2008-01-15 13:15:00 SECRET Embassy Islamabad
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1. (C) Summary. During a meeting January 14 with NSA Aziz,
Charge said the U.S. strongly opposed any delay in Pakistan's
election as had been reportedly proposed to accompany
formation of a national unity government. Aziz said he
enthusiastically supported the idea of a national unity
government but insisted that elections would go forward as
scheduled on February 18. Aziz confirmed reports that the
Pakistan Muslim League (PML) faced significant losses because
of an expected sympathy vote over Benazir Bhutto's
assassination and continuing energy and flour shortages.
The idea of a national unity government and election delay
may have been just a trial balloon floated by Musharraf to
counter concerns about his party's declining fortunes.
However, we should continue to reinforce the need for
elections to proceed as scheduled. See septel for an
additional analysis of current calculations regarding a
national unity government. Charge also raised consular access
for Amcit Dr. Sarki, visas for IRI staff, and problems with
tenders submitted by American companies in Pakistan. End

2. (C) Charge and Polcouns met January 15 with NSA Tariq
Aziz to raise several issues, including reports of an
election delay and the formation of a national unity
government. Charge noted that Musharraf had clearly ruled
out formation of a national unity government in the press on
January 14, but we were interested in Aziz's views on this
initiative. Charge stated that the U.S. strongly opposed any
delay in elections.


3. (C) During a meeting in Islamabad on January 14,
Musharraf envoy Brig (Ret) Niaz Ahmad reportedly approached
Pakistan Muslim League-Nawaz (PML-N) President Shahbaz Sharif
about the possibility of forming a national unity government
which would oversee Pakistan for a year, thus delaying the
scheduled February 18 national and provincial elections.
Shahbaz briefed CG Lahore (septel) on the meeting;
subsequently, former Commerce Minister Humayun Akhtar Khan
briefed CG Lahore January 15 on Khan's meeting with Niaz
(septel) and confirmed that Niaz had made the national unity
government proposal to PML-N. Shahbaz subsequently met with
the Saudi Ambassador to Pakistan, and the press has
speculated that Riyadh supported PML-N participation in a
national unity government.

Unity Government-Yes; Delay-No

4. (C) Without acknowledging Niaz's initiative, Aziz
confirmed that he was enthusiastic about the idea of a
national unity government and had shared this view with
President Musharraf. A national unity government, he said,
would put to rest opposition complaints that the caretaker
government was biased and would improve the ground for
credible elections. However, Aziz said categorically that
elections would not be postponed. The government only
postponed the January 8 election because so many Election
Commission offices and ballot boxes had been destroyed. Aziz
did not explain how the government would manage to formulate
a national unity government in the five weeks remaining
before scheduled elections.

5. (C) Aziz admitted that the Pakistan Muslim League (PML)
party faced a backlash, both from the pro-Pakistan People's
Party (PPP) sympathy vote after Benazir Bhutto's
assassination, and from voters concerned about electricity
cuts and flour shortages. He said candidly that former Prime
Minister Shaukat Aziz had a great deal to answer for on
several fronts--the wheat shortage, sugar hoarding, poor
management of the energy sector, and the delay in
privatization of the steel industry. The next government
faced the unhappy prospect of raising gasoline prices as one
if its first acts. The intelligence agencies were now
predicting that the PML would receive between 35 and 85 seats
in the Punjab; Aziz thought the number would be somewhere in
between, probably 66. (Note: Before Bhutto' assassination,
PML leaders were confidently predicting they would win 110
seats in the Punjab.) But this was another sign that PML
needed a partner to form a coalition.

ISLAMABAD 00000226 002 OF 002

6. (C) Charge asked if a coalition with PPP, as had been
envisioned with Bhutto, was still possible. Aziz said yes
and shared his views of PPP Vice Chairman Amin Faheem as
someone with whom all the political parties could work.
Faheem was weak, Aziz acknowledged, and would need to appoint
good managers to the cabinet if he became Prime Minister.
According to Aziz, however, PPP Co-Chairman Asif Zardari
would not be accepted as a candidate for Prime Minister. He
doesn't even have a university degree so he is ineligible to
run for the National Assembly. Aziz said that Zardari had
invited him for talks but they had not yet agreed on a date
and place; clearly, Aziz found the prospect of working with
Zardari as distasteful.

7. (C) Aziz said that the PML would be able to work with
Shahbaz Sharif, but not with his brother Nawaz. If Shahbaz
had appealed the Election Commission's decision to declare
him ineligible to be a candidate for the National Assembly,
Aziz predicted Shahbaz would have won. Describing Shahbaz as
being sharper than Nawaz and a good Punjab administrator,
Aziz said he can also be difficult for subordinates to deal
with. He understood also that Shahbaz was on medication for
psychological problems.

Security Concerns

8. (C) Looking ahead, Aziz said he was increasingly
troubled by ongoing reports of suicide bombings across the
country. He estimated there were perhaps 300-400 suicide
bombers loose in Pakistan and agreed that, unfortunately,
Pakistani politicians had yet to take adequate security
measures. He noted that Amin Faheem had recounted his pleas
to Benazir Bhutto the evening of her assassination to sit
down inside the protective cover of her armored car.

9. (SBU) Charge also raised with Aziz: (1) consular access
for Amcit Dr. Sarki; (2) visa renewals for International
Republican Institute (IRI) permanent staff in Pakistan; and
(3) our concerns about changing tender conditions for
American companies. Charge left white papers with Aziz on
all three issues.

10. (C) Comment: It is unclear if the Niaz initiative was
anything more than a trial balloon launched by an
increasingly nervous President Musharraf, who is
contemplating the possibility his party may not win the
elections. Although the Chaudhrys of the PML have reached
out to both the PPP and the PML-N about post-election
coalitions, it also is not clear that the PML blessed this
Niaz initiative. PML President Chaudhry Shujaat Hussain has
been in China for the last week undergoing herbal medical
treatments. We do not believe Musharraf can form a unity
government at all, much less within the five weeks before
elections (see septel for a more complete analysis). Any
election delay at this point would further undermine
Musharraf's domestic and international credibility and would
send PPP supporters into the streets. Given the current
uncertainty of the political situation, we likely will see
more of these trial balloons and we will continue to strongly
counsel that elections be held as scheduled.