Identifier
Created
Classification
Origin
08PESHAWAR434
2008-08-25 10:07:00
CONFIDENTIAL
Consulate Peshawar
Cable title:  

NWFP: OPERATIONS CONTINUE IN SWAT WHILE BUSINESS DECLINES

Tags:  PTER EAID PGOV PINR ASEC PK 
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VZCZCXRO7740
PP RUEHLH RUEHPW
DE RUEHPW #0434/01 2381007
ZNY CCCCC ZZH
P 251007Z AUG 08
FM AMCONSUL PESHAWAR
TO RUEHC/SECSTATE WASHDC PRIORITY 7601
INFO RUEHIL/AMEMBASSY ISLAMABAD PRIORITY 4367
RUEHKP/AMCONSUL KARACHI PRIORITY 1603
RUEHLH/AMCONSUL LAHORE PRIORITY 1596
RUEHBUL/AMEMBASSY KABUL PRIORITY 1225
RUEHNE/AMEMBASSY NEW DELHI PRIORITY 0881
RUEHBY/AMEMBASSY CANBERRA PRIORITY 0503
RUEHLO/AMEMBASSY LONDON PRIORITY 0641
RUEHOT/AMEMBASSY OTTAWA PRIORITY 0593
RUEHNO/USMISSION USNATO PRIORITY 0504
RUEHTC/AMEMBASSY THE HAGUE PRIORITY 0551
RHEHAAA/NSC WASHINGTON DC
RUEAIIA/CIA WASHDC
RUMICEA/USCENTCOM INTEL CEN MACDILL AFB FL
RHMFISS/CDR USSOCOM MACDILL AFB FL
RUEHPW/AMCONSUL PESHAWAR 4631
C O N F I D E N T I A L SECTION 01 OF 02 PESHAWAR 000434 

SIPDIS

E.O. 12958: DECL: 8/25/2018
TAGS: PTER EAID PGOV PINR ASEC PK
SUBJECT: NWFP: OPERATIONS CONTINUE IN SWAT WHILE BUSINESS DECLINES

REF: A) PESHAWAR 422 B) PESHAWAR 345 C) PESHAWAR 364 D) 07 PESHAWAR 800

CLASSIFIED BY: Lynne Tracy, Principal Officer.
REASON: 1.4 (a),(b),(d)
Summary
-------

C O N F I D E N T I A L SECTION 01 OF 02 PESHAWAR 000434

SIPDIS

E.O. 12958: DECL: 8/25/2018
TAGS: PTER EAID PGOV PINR ASEC PK
SUBJECT: NWFP: OPERATIONS CONTINUE IN SWAT WHILE BUSINESS DECLINES

REF: A) PESHAWAR 422 B) PESHAWAR 345 C) PESHAWAR 364 D) 07 PESHAWAR 800

CLASSIFIED BY: Lynne Tracy, Principal Officer.
REASON: 1.4 (a),(b),(d)
Summary
--------------


1. (C) Noor Muhammad Khan, a resort and business owner in Swat
who has been a regular contact of the Consulate, detailed the
decline of business interests in Swat during a meeting with
Principal Officer on August 18. He said that while the recent
round of operations (Ref A) in Swat have been more successful
than those of November 2007-January 2008 (Ref D),the Pakistan
army and civilian government still lack credibility. The
government, he commented, could do the most immediate good by
providing relief in the form of basic food staples. Although
some of Noor's economic statistics are difficult to confirm, we
offer his comments as a window onto the toll that Swat's
insurgency has taken on the local economy and as a community
leader's assessment of the government's performance in Swat.
End Summary.

Continuing Operations
--------------


2. (C) Noor told PO that the Pakistan Army's first operation in
Swat (Ref D) had ended abruptly and without results. Then, from
the beginning, questions about the militants' sincerity in
negotiation suggested that the peace agreement would fail (Ref B
& C). He remarked that in the first operation it seemed like
"the army was trying to scare the militants rather than defeat
them," striking to the side of targets rather than hitting the
center. Noor remarked that the second phase of the agreement
has been conducted more correctly. Nevertheless, he made the
caveat that the army should strike targets more carefully and at
closer range. Frequently, attacks hit civilians. He expects
the operation to last until Ramadan.


3. (SBU) Mingora and Saidu Sharif observe a curfew time from
2000-0700 hrs. However, during the daylight traffic is moving
as normal. In some ways infrastructure has improved, the road
over the Malakand River has been completed expediting travel
between Swat and Islamabad or Peshawar.

Credibility

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


4. (C) Noor credited the provincial government with taking the
correct course of action in signing a peace deal in May with
militants. The government, he said, need to show a willingness
to talk. Now that the militants have continued attacks, the
government, he continued, is justified in a military response.


5. (C) Noor maintained, however, that the Pakistan Army loses
credibility when it has the opportunity to strike and fails to
act or strikes inaccurately. A recent press conference held by
militants was a perfect example, he said, of how the military's
credibility can be undermined. Despite the fact that the
militants gave advance notice of the press conference, held it
around 5 kilometers from a Pakistan Army location, and several
high level militants attended, the Army did nothing.


6. (C) Noor said that between January and February the Pakistan
Army received PRS 100 million ($1.43 million) for relief
efforts. After negotiation, the money went to locally elected
officials for distribution and implementation of relief
projects. Now, due to the second operation, the civilian
government has stopped work in areas where militants are most
active (Kabal and Matta Tehsils). Noor said that immediate
relief was necessary. As Ramadan approaches, edibles,
particularly flour and oil could be as important as larger scale
projects.

Business Decline
--------------


7. (C) Noor's hotel, Rock City Resort (located on the opposite
side of the Swat River from Mullah Fazlullah's Imam Dheri
compound),is not operating both because there are no tourists
and because the army is occupying it. He closed his factory,
Allied Rubber, because most of the skilled laborers were from
the Punjab and returned home for fear of the security situation.

PESHAWAR 00000434 002 OF 002


Many poor people and semi-skilled laborers have also departed
for Karachi and the Punjab to find jobs. Many more are trying
to go to the Middle East for work.


8. (C) Noor estimated that 70% of Swat's fruit crops are still
arriving at market. However, people are becoming afraid to work
in the village fields. He said that places around Mingora,
previously safe, are being targeted by militants. Noor also
noted that a cosmetics factory had been receiving threats
because it employed 50% female workers. It closed last week
after being bombed.

Comment
--------------


9. (C) Swat continues to be plagued by militant attacks,
particularly a bombing campaign that has reportedly destroyed at
least 25 girls' schools since May. The simmering instability in
Swat will continue to hamper the revival of local industries,
and Swat's long-term recovery in part depends on the
government's ability to restore the confidence of businessmen
like Noor.
TRACY