SINDH/KARACHI: LOCAL GOVERNMENT TO BE DISSOLVED

UNCLAS SECTION 01 OF 02 KARACHI 000222

SENSITIVE
SIPDIS

E.O. 12958: N/A
TAGS: PGOV PGOV PHUM PK
SUBJECT: SINDH/KARACHI: LOCAL GOVERNMENT TO BE DISSOLVED


1. (SBU) Summary: Prime Minister Gilani's announcement that Local
Government (LG) will be dissolved in August and Administrators
appointed, with the understanding that the government will hold
elections when the law and order situation permits, has changed the
political landscape in Karachi and Sindh Province. The Muttahida
Qaumi Movement (MQM) does not expect elections will actually be held
within 90 days, as stipulated under the Constitution. Local
Pakistan People's Party (PPP) politicians describe the present local
governance system as unworkable, due to its five-tiered structure
and the overlaps between the powers of the local and provincial
governments. MQM wants the system to continue, albeit with some
changes - unsurprisingly, as it is a major stakeholder in the
system, controlling the governments of both Karachi and Hyderabad.
End Summary.


2. (SBU) With Prime Minister Gilani's announcement that Local
Government will be dissolved in August and Administrators appointed,
political parties have begun to jockey for position. Shahla Raza,
Deputy Speaker of the Sindh Assembly and a PPP member, told post
that the government wants to hold free and fair elections for the
local bodies, however the MQM wants assurances that it will be
allowed to form the next local government of Karachi with its own
Nazim (Mayor). The PPP wants changes in the Sindh Local Government
Ordinance of 2001, including the restoration of the magisterial
powers for Commissioners, but MQM opposes these proposed changes.


3. (SBU) Shahla described the present system of local government,
where the City District Government of Karachi (CDGK) is more
powerful than the Sindh Provincial government, as unworkable. She
also noted that not a single PPP worker has been given a job in the
(MQM-led) Karachi city government. Any development project
initiated by a PPP minister faces obstacles from the city
government, which may refuse to provide water and No Objection
Certificates (necessary to start any project). Shahla related how
MQM ministers bluntly told her that development projects will bring
votes in the next elections, and that MQM cannot afford to lose its
voter base. She said MQM intends to retain control of the PKR 52
billion budget of the Karachi City Government, noting that it has
refused any auditing of CDGK funds.


4. (SBU) Agha Siraj Durrani, Sindh Minister for Local Government and
PPP member, reiterated to post the government's resolve to hold
elections after amendments to the local government system have been
completed, but confirmed that the appointment of Administrators is a
legal requirement prior to elections. He noted that, at present,
the five levels of government in the province (Union Council, Town,
District, City and Provincial Government) creates confusion, and
needs to be clearly defined. Durrani also wants the Administrators
to be granted magisterial powers to check consumer prices, and to
maintain law and order.


5. (SBU) The MQM has not yet put to the government its proposed
changes in the local government system. Faisal Sabzwari, Deputy
Parliamentary Leader of the MQM in the Sindh Assembly, told post the
MQM wants Executive District Officers (EDO) and District
Coordination Officers (DCO) to be granted magisterial powers to
control the prices of staple goods. Police should come under the
Nazim in order to control law and order more effectively. In one
area of agreement, both MQM and PPP agree on holding the elections
on a party basis.


6. (SBU) Sabzwari and three MQM members of the Sindh Provincial
Assembly told post the Local Government laws need some modification,
but that overall it is a good system. Positive results have been
achieved in Karachi and Hyderabad, and in other towns with good
mayors. The MPAs also called for adequate compensation for the
councilors, in order to reduce corruption. They complained that
some Union Councils are either too small or too large, and need to
be adjusted. The current demarcation of Karachi into eighteen towns
needs to be reorganized to make them more administratively
practical.


7. (SBU) Sabzwari said the MQM wants local governments to be
fiscally autonomous from the provincial and federal governments. He
said that current development funds for the City District Government
of Karachi have been frozen, and future allocations reduced by
30%-40%.


8. (SBU) Sabzwari expressed doubts that the elections will be held,
as (according to him),PPP has never conducted local body elections
when it has been in power. He is concerned about "managed" polls,

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especially in rural Sindh, noting that vote rigging had occurred
previously under former Chief Minister Arbab Rahim.


9. (SBU) Comment: The MQM, if it perceives that these changes may
cause it to be weakened in its Karachi power base, may react by
creating civil disturbances. Alternatively, it could destabilize
the provincial and federal government by threatening to quit these
coalitions. The present system of local government functions well
in the sense that it devolves power to the grass roots, but all
analysts agree that it needs changes, and that the division of power
between provincial and local governments needs to be more clearly
defined.

FAKAN