Identifier
Created
Classification
Origin
08KARACHI466
2008-08-05 06:29:00
CONFIDENTIAL
Consulate Karachi
Cable title:  

KARACHI - MUSHARAFF MEETS WITH BUSINESS COMMUNITY

Tags:  PGOV ECON PREL PTER PK 
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VZCZCXRO3295
PP RUEHLH RUEHPW
DE RUEHKP #0466/01 2180629
ZNY CCCCC ZZH
P 050629Z AUG 08
FM AMCONSUL KARACHI
TO RUEHC/SECSTATE WASHDC PRIORITY 0568
INFO RUEHIL/AMEMBASSY ISLAMABAD PRIORITY 0036
RUEHBUL/AMEMBASSY KABUL PRIORITY 0169
RUEHNE/AMEMBASSY NEW DELHI PRIORITY 1750
RUEHLH/AMCONSUL LAHORE PRIORITY 2549
RUEHPW/AMCONSUL PESHAWAR PRIORITY 4432
RUEKJCS/SECDEF WASHINGTON DC PRIORITY
C O N F I D E N T I A L SECTION 01 OF 02 KARACHI 000466 

USCENTCOM INTEL CEN MACDILL AFB FL PRIORITY

USCINCCENT MACDILL AFB FL PRIORITY

CIA WASHDC PRIORITY

SIPDIS

E.O. 12958: DECL: 08/05/2018
TAGS: PGOV ECON PREL PTER PK
SUBJECT: KARACHI - MUSHARAFF MEETS WITH BUSINESS COMMUNITY

Classified By: Classified by Kay Anske, Consul General, 1.4 b and d

C O N F I D E N T I A L SECTION 01 OF 02 KARACHI 000466

USCENTCOM INTEL CEN MACDILL AFB FL PRIORITY

USCINCCENT MACDILL AFB FL PRIORITY

CIA WASHDC PRIORITY

SIPDIS

E.O. 12958: DECL: 08/05/2018
TAGS: PGOV ECON PREL PTER PK
SUBJECT: KARACHI - MUSHARAFF MEETS WITH BUSINESS COMMUNITY

Classified By: Classified by Kay Anske, Consul General, 1.4 b and d


1. (C) Summary: The Consul General (CG) was briefed by
Majyd Aziz, a Karachi textile manufacturer, who attended
meetings between President Pervez Musharraf and the city,s
business leaders during his August 1)4 visit to Karachi.
Musharraf first held a private meeting on August 2 with a
small group of business leaders, during which he expressed
concern over the current lack of political leadership and the
worsening economic scenario in Pakistan. He did not rule out
using his authority to dissolve the government, but implied
that the time is not right for such an action. On August 3,
the President defended the Inter-Services Intelligence (ISI)
agency at a dinner gathering of around 200 business leaders
and called for leadership to reinvigorate the country,s
ailing economy. End summary.


2. (C) On August 4, Majyd Aziz, a textile manufacturer,
gave the Consul General (CG) a read out on meetings he
attended between President Pervez Musharraf and business
leaders during the President,s August 1)4 visit to Karachi.

Private Meeting With Business Leaders
--------------


3. (C) Aziz participated in the private meeting that
Musharraf held with business leaders on August 2 at the
office of Sindh Governor Ishrat-ul-Ebad (a member of the
Muttahida Qaumi Movement (MQM) party),during which Musharraf
expressed concern about the lack of leadership in Pakistan,s
current coalition government. Musharraf pointed out a
growing gap between the current Pakistan People,s Party
(PPP) government and the business community. This was a
problem exacerbated, he said, by a lack of accountability
among the current GOP leadership. According to Musharraf,
there is confusion over whether Prime Minister Yousef Gilani
or PPP Chair Asif Zardari is actually in charge of the
government.


4. (C) Musharraf told the business leaders that he had
tried to stay in the background since the election, but the

business community,s concerns over the State Bank of
Pakistan,s recent interest rate increases had forced him to
intervene and question the bank,s governor. The rate
increases, taken to combat rising prices, were actually
fueling inflation, the business executives told Musharraf.
They reminded the President that the issues of small and
medium enterprises were substantially different than those
faced by larger corporations.


5. (C) The business representatives were concerned that PPP
government support for new labor unions was fomenting labor
unrest, and cited a case where the President of the Karachi
PPP had joined in one labor protest at a bank. They also
complained to Musharraf about a worsening law and order
situation, using a sharp increase in kidnappings as an
example, and asked for resumption of the country,s
Inter-Services Intelligence (ISI) agency assistance in
locating cell phones used by kidnappers to make ransom
demands. As a result, Aziz said, the President ordered ISI
to coordinate with provincial law enforcement authorities on
this issue.


6. (C) Aziz said the President told the group that for the
moment, he did not plan to use his power to dissolve the
government under Article 58.2(b) of the Pakistan
Constitution, but did not rule it out completely. Aziz said
he believed that Musharraf realized that Nawaz Sharif,s
Pakistan Muslim League-Nawaz (PML-N) party would sweep new
elections at this time, thus the reason for his reticence to
force new elections. Musharraf also told the group that he
would not attempt to regain power by decree as that would
make Pakistan an &international pariah.8

Dinner With Business Leaders
--------------


7. (C) Musharraf defended the ISI at an August 3 dinner,
telling around 200 attendees that attacks on the agency were
part of a conspiracy against the GOP. Weakening the
intelligence agency would weaken Pakistan, he said.

KARACHI 00000466 002 OF 002


Musharraf called upon the business leaders to support ISI and
declared that the time had come for Pakistanis to decide what
kind of country they want, adding that &we have to stand up
and be counted.8 He said that Pakistan remains a moderate
nation with a small extremist element.


8. (C) Political instability, a dysfunctional coalition
government, and a prevalent view of Pakistan as
&uncivilized8, Musharraf cautioned, was driving investors
away from the country and leading to a capital exodus.
Musharraf said he supported the current government, but
referred to his commitment to his &constitutional duties8
on several occasions, which, Aziz felt, was a veiled
reference to his power to dissolve the current government.


9. (C) Aziz forecast that PPP Chair Zardari would soon be
asked to step aside from his role as de facto leader of the
government in favor of Prime Minister Gilani. Aziz noted
that Musharraf appeared more confident than he had in over a
year. Aziz predicted to the CG that the economy would
deteriorate over the next year. It was at that point, he
reasoned, that Musharraf would dissolve the government and
call for new elections.


10. (C) Comment: Musharraf's visit to Karachi is part of a
new strategy by his Pakistan Muslim League party to
increasingly criticize the PPP-led coalition. With the
business community, Musharraf was playing to a receptive
crowd worried about the lack of a coherent plan to tackle a
growing economic crisis.
Anske