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INFO OCT-01 ISO-00 CIAE-00 DODE-00 PM-03 H-01 INR-05 L-02
NSAE-00 NSC-05 PA-01 RSC-01 PRS-01 SP-02 SS-15
USIA-06 AID-05 COME-00 EB-07 FRB-01 TRSE-00 XMB-02
OPIC-03 CIEP-01 LAB-04 SIL-01 OMB-01 AGR-05 FEA-01
SAM-01 STR-01 SWF-01 /087 W
--------------------- 128156
R 090500Z DEC 74
FM AMEMBASSY ISLAMABAD
TO SECSTATE WASHDC 7901
INFO AMEMBASSY DACCA
AMEMBASSY KABUL
AMCONSUL KARACHI
AMCONSUL LAHORE
AMEMBASSY NEW DELHI
AMEMBASSY TEHRAN
C O N F I D E N T I A L SECTION 1 OF 5 ISLAMABAD 11424
E.O. 11652: GDS
TAGS: PINT, EGEN, PGOV, PINS, PK
SUBJ: PAKISTAN QUARTERLY INTERNAL POLITICAL ASSESSMENT
SUMMARY. THE GOVERNMENT OF PRIME MINISTER BHUTTO CONTINUES FIRMLY
IN CONTROL IN ISLAMABAD AND HAS STRENGTHENED ITS HAND IN PAKISTAN'S
FOUR PROVINCES. BHUTTO AND HIS PEOPLES' PARTY GOVERNMENT ARE
ENJOYING INCREASED POPULARITY AS A RESULT OF THE SUCCESSFUL DAMPING
DOWN OF THE AHMADIYA CONTROVERSY AND BALUCHISTAN INSURGENCY WHICH
WERE TROUBLING THE NATION IN THE SUMMER. INCREASED POPULAR
EXPECTATIONS HAVE BEEN FUELED BY A CABINET EXPANSION, NEW GESTURES
TO THE PRIVATE SECTOR AND ATTEMPTS TO BROADEN AND CLEANSE THE RULING
PARTY. OPPOSITION TO BHUTTO AND HIS GOVERNMENT IS STILL INEFFECTUAL
AND DISORGANIZED. HIS GREATEST PROBLEMS CONTINUE TO BE ECONOMIC:
INFLATION AND INDUSTRIAL STAGNATION, THE LIKELIHOOD OF A POOR
WINTER WHEAT CROP AND CONTINUING DIFFICULTIES IN PAKISTAN'S BALANCE
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OF PAYMENTS. STILL, BHUTTO IS MASTER IN HIS OWN HOUSE WITH NO
PEERS IN HIS PARTY AND NO EFFECTIVE CHALLENGERS FROM WITHOUT. THIS
REPORT, PREPARED IN CLOSE CONSULTATION WITH THE CONSULATES, INCLUDES
SIGNIFICANT COMMENTS FROM THEM, BOTH ON NATIONAL AND REGIONAL AFFAIRS
.
END SUMMARY.
1. GOVERNMENT PROGRESS ON SOME FRONTS. AS BEFORE, BHUTTO IS IN
CONTROL IN THE CENTER AND HAS INCREASED HIS POWER OVER THE FOUR
PROVINCES. OVER THE PAST THREE MONTHS HIS GOVERNMENT APPEARS TO HAVE
REGAINED SOME POPULARITY LOST EARLIER IN THE YEAR, DAMPED DOWN SOME
INTERNAL CONFLICTS, AND CREATED BY SIGNIFICANT
CHANGES IN PARTY, POLICY AND CABINET, A NEW SENSE OF MOMENTUM. AS
BEFORE, BHUTTO PERSONALLY HAS NOT ONLY TAKEN THE MAJOR POLICY DECI-
SIONS BUT ALSO INVOLVED HIMSELF IN MINOR MATTERS OF ADMINISTRATION
AND PERSONNEL. DESPITE A FULL SCHEDULE OF FOREIGN VISITS AND
VISITORS, INCLUDING SECRETARY OF STATE KISSINGER, THE PRIME MINISTER
HAS SPENT MOST OF HIS TIME WORKING OUT DOMESTIC PROBLEMS, MAKING
EXTENSIVE TOURS OF THE PROVINCES, PLANNING THE REORGANIZATION OF
THE PAKISTAN PEOPLES' (PPP) AND RECONSTITUTING HIS CABINET.
2. IN LATE AUGUST AT THE TIME OF THE EMBASSY'S LAST QUARTERLY
ASSESSMENT PAKISTAN SEEMED BESET BY STUBBORN PROBLEMS OF INTERNAL
CONFLICT, FOREIGN HOSTILITY AND ECONOMIC STAGNATION/INFLATION.
WHILE MANY OF THESE PROBLEMS ARE STILL NOT RESOLVED, AND MAY INDEED
NOT BE SUSCEPTIBLE TO RESOLUTION, THE SITUATION GENERALLY SEEMS
BRIGHTER AND MORE STABLE THAN IT DID THEN.
3. THE DOMESTIC POLITICAL EQUATION HAS CLEARLY IMPROVED FROM PRIME
MINISTER BHUTTO'S VIEWPOINT. THE PROBLEM SURROUNDING THE STATUS OF
THE AHMADIYA SECT, WHICH HAD POSED THE DANGER OF WIDESPREAD DOMESTIC
DISTURBANCES, HAS BEEN LARGELY RESOLVED, APPARENTLY TO THE PRIME
MINISTER'S ADVANTAGE. DESPITE HIS PERSONAL DISTASTE FOR SUCH
RELIGIOUS
OBSCURANTISM AND SECTARIAN VINDICTIVENESS, BHUTTO SAW FIT TO BOW
TO THE UNRELENTING DEMANDS OF THE UNITED PARLIAMENTARY OPPOSITION
(WHICH APPEARED TO REFLECT THE GENERAL PUBLIC'S PREFERENCE) AND
AGREED TO DECLARE THE AHMADIYAS A NON-MUSLIM MINORITY RATHER THAN A
SECT OF ISLAM. ONCE THIS WAS DONE, THE CONTROVERSY DIED DOWN AND
BHUTTO AND HIS PARTY, CLAIMING CREDIT FOR "PROTECTING" ISLAM,
BASKED IN GENERAL PUBLIC ACCLAIM.
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4. A SECOND CANKER ON THE PAKISTAN BODY POLITIC WAS THE INSURGENCY
IN BALUCHISTAN PROVINCE, AT ITS PEAK THREE MONTHS AGO,
AND OCCASIONAL BOMBINGS BY DISSIDENTS ELSEWHERE. WHILE
BHUTTO ANNOUNCED A PERIOD OF AMNESTY IN BALUCHISTAN UP TO
OCTOBER 15 WITH SEVERE MEASURES THREATENED AGAINST THE
INSURGENTS THEREAFTER, IN FACT HE ORDERED THE LOCAL MILITARY
COMMANDERS TO SURROUND AND CAPTURE THE TRIBALS, AND
APPARENTLY LARGELY PACIFIED THE X RRI AREA BY THE OCTOBER
15 "DEADLINE" DATE. SIMULTANEOUSLY, THE GOP HAS CONTINUED
TO BRING IN OUTSIDERS TO BEEF UP THE BALUCHISTAN ADMINISTRATION,
NEGOTIATED WITH MODERATE ELEMENTS OF LOCAL NAP IN AN
ATTEMPT TO SPLIT THE PARTY AND ADD LEGITIMACY TO THE COALITION,
AND CONTINUED TO POUR IN DEVELOPMENT FUNDS AND HAND OUT
PATRONAGE TO PROVINCIAL LEADERS. SERENITY DOES NOT REIGN
IN BALUCHISTAN BUT BETWEEN CAPTURES, SURRENDERS AND THE COLD
WEATHER, THE INSURGENCY IS GREATLY REDUCED. THE ISOLATED
BOMBINGS CONTINUE AND HAVE SPREAD FROM THE QUETTA AND
PESHAWAR AREAS TO KARACHI, LAHORE AND RAWALPINDI. DESPITE
GOVERNMENT CLAIMS TO HAVE CAPTURED THE GUILTY TERRORISTS,
THE IDENTITY AND MOTIVATION OF THE BOMB-THROWERS IS STILL
UNCLEAR.
5. CHANGES IN THE MINISTRY, THE PPP, AND GOP ECONOMIC POLICY.
THE EXPANSION OF THE GOP CABINET ON OCTOBER 22 PUT FLESH
ON A BARE-BONES MINISTRY WHICH HAD BEEN LIMPING ALONG,
UNDERSTAFFED AND TORN BY SQUABBLES FOR ALMOST A YEAR. THE
CABINET EXPANSION (TO 12 MINISTERS, 9 MINISTERS OF STATE
AND 8 PARLIAMENTARY SECRETARIES) WAS AN ATTEMPT BY BHUTTO
TO GAIN GREATER CONTROL OVER HIS GOVERNMENT APPARATUU WHILE
PERMITTING GREATER DELEGATION OF AUTHORITY. THE CABINET
RESHUFFLE WAS ACCOMPANIED BY PROMISES: MORE EFFICIENT
PUBLIC SERVICES; FEWER CORRUPT OFFICIALS; AND GREATER COOPERATION
WITH AND ENCOURAGEMENT TO THE ECONOMY'S PRIVATE SECTOR.
THE PUBLIC, DESPITE DEEPSEATED SKEPTICISM ABOUT RED TAPE,
CORRUPTION AND EXAGGERATED PRIMISES, IS IN A MOOD TO
HOPE FOR SOME IMPROVEMENT.
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ACTION NEA-10
INFO OCT-01 ISO-00 CIAE-00 DODE-00 PM-03 H-01 INR-05 L-02
NSAE-00 NSC-05 PA-01 RSC-01 PRS-01 SP-02 SS-15
USIA-06 AID-05 COME-00 EB-07 FRB-01 TRSE-00 XMB-02
OPIC-03 CIEP-01 LAB-04 SIL-01 OMB-01 AGR-05 FEA-01
SAM-01 STR-01 SWF-01 /087 W
--------------------- 130357
R 090500Z DEC 74
FM AMEMBASSY ISLAMABAD
TO SECSTATE WASHDC 7902
INFO AMEMBASSY DACCA
AMEMBASSY KABUL
AMCONSUL KARACHI
AMCONSUL LAHORE
AMEMBASSY NEW DELHI
AMEMBASSY TEHRAN
C O N F I D E N T I A L SECTION 2 OF 5 ISLAMABAD 11424
6. THE PRIME MINISTER HAS LONG HAD ON HIS AGENDA THE
REVAMPING OF HIS PARTY TO MAKE IT A MORE EFFECITVE INSTRUMENT
FOR CARRYING OUT HIS WILL. AT THE PPP CENTRAL COMMITTEE
MEETING IN SEPTEMBER, BHUTTO REPORTEDLY PRESSED FOR AN
EXPANDED MEMBERSHIP AND A DECENTRALIZED STRUCTURE OVER THE
OBJECTIONS OF THOSE FACMIONS AND INDIVIDUALS WHO NOW
ENJOY THE POWER AND PRIVILEGE OF PUBLIC OFFICE. BHUTTO,
AS PARTY CHAIRMAN, APPARENTLY WANTED TO REDUCE FACTIONALISM
AND BRING A BALANCE BETWEEN THE LEFTISTS AND CENTRISTS OF
HIS PARTY. HE MAY ALSO HAVE WANTED TO CUT DOWN TO SIZE
SOME OF HIS APPOINTEES AND PARTY LEGISLATORS WHOSE REPUTATION
FOR CORRUPTION AND PETTY TYRANNY HAD ALIENATED OTHER PARTY
WORKERS AND IMPORTANT ELEMENTS OF THE GENERAL PUBLIC.
REORGANIZATION OF THE PPP IS PROCEEDING HALTINGLY AND IS
CONFIRMED TO PUNJAB AND SIND: THE PROCEDURE FOR NEW ENROLL-
MENTS WAS ANNOUNCED ONLY ON NOVEMBER 30.
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7. THE PARTY'S GREATEST STRENGTH AND MOST PERSISTENT
INTERNAL RIVALRY HAS BEEN IN THE PUNJAB. BHUTTO MOVER TO
EFFECT A COMPROMISE SETTLEMENT OF FACTIONS THROUGH
APPOINTMENTS TO HIS NEW CABINET AND THE ANNOUNCEMENT OF
NEW PROVINCIAL AND DISTRICT-LEVEL LEADERS ON OCTOBER 30.
THERE ARE INDICATIONS THAT BHUTTO IS TRYING TO TACKLE THE
PROBLEM OF UNCOVERING CORRUPTION WITHIN THE PARTY (WITHOUT
GETTING CAUGHT UP IN FACTIONAL WRANGLES) BY SETTING UP A
PRIVATE SCREENING MECHANISM UNDER HIS PERSONAL DIRECTION.
8. NEW ECONOMIC DIRECTIONS? THE PRIME MINISTER ALSO MADE A
SERIES OF MOVES IN THE PAST THREE MONTHS TO ENCOURAGE
GREATER PARTICIPATION BY THE PRIVATE SECTOR AND TO STRENGTHEN
THE ECONOMIC EXPERTISE OF HIS GOVERNMENT. THE LARGE-SCALE
CABINET RESHUFFLE REMOVED THE POWERFUL DOCTRINAIRE-SOCIALIST
MINISTER OF FINANCE, MUBASHIR HASSAN, AND BROUGHT IN SEVERAL
NEW MINISTERS WITH PRIVATE BUSINESS EXPERIENCE. WHEN
COUPLED WITH BHUTTO'S SPEECHES TO THE BUSINESS COMMUNITY
IN KARACHI ON OCTOBER 22 AND ELSEWHERE, THE RESHUFFLE WAS
INTERPRETED AS A MOVE IN THE DIRECTION OF GREATER INCENTIVES
TO POTENTIAL PRIVATE INVESTORS. AFTER LONG BUREAUCRATIC
DELAYS, THE GOP AWARDED TWO MAJOR GAS AND OIL EXPLORATION
CONCESSIONS AND STEPPED UP NEGOTIATIONS WITH US FIRMS OVER
NEW AND EXPANDED FERTILIZER PLANTS. WHILE THESE MOVES
ARE WELCOMED, THE BUSINESS COMMUNITY IS STILL SKEPTICAL
WHETHER BHUTTO'S VISION OF A SOCIALIST ECONOMY WILL GIVE ANY
PROFITABLE PLACE TO THE PRIVATE SECTOR IN THE FUTURE. FARMERS
CONTINUE TO COMPLAIN THAT HIGH INPUT COSTS ARE EATING
UP THEIR PROFITS.
9. PPP CONTROL OVER THE PROVINCES. THE PPP POSITION IN
THE VARIOUS PROVINCES HAS ALSO IMPROVED REMARKABLY. THE
AHMADIYA DECISION WAS TREMENDOUSLY POPULAR AND IT GAVE
THE PPP A UNIQUE OPPORTUNITY TO ANSWER LONGSTANDING
ACCUSATIONS THAT ITS SECULAR AND SOCIALIST POLICIES WERE
UN-ISLAMIC. INCREASINGLY, NUMBERS OF LEGISLATORS AND POLITICAL
ACTIVISTS HAVE ANNOUNCED THAT THEY HAVE JOINED THE PPP,
ESPECIALLY IN THE PUNJAB. THEY COME FROM THE RANKS OF THE
MUSLIMS LEAGUES, THE RELIGIOUS PARTIES AND INDEPENDENTS.
ALTHOUGH SOME CLAIMED THAT THE PPP HAS NOW "PROVEN ITS ISLAMIC
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CREDENTIALS" BY THE AHMADIYA DECISION, THE STAGING OF THESE
ACCESSIONS WAS APPARENTLY DESIGNED FOR MAXIMUM PROPAGANDA VALUE,
TIMED AS THEY WERE TO COINCIDE WITH BHUTTO'S DESIRE TO ENLARGE
THE PARTY'S MEMBERSHIP. ALSO IN THE PUNJAB THE LEVEL OF
FACTIONAL INFIGHTING HAS BEEN MODERATED, AT LEAST TEMPORARILY.
FORMER CHIEF MINISTER KHAR AND HIS BULLY BOYS ARE OUT,
RAMAY'S GOVERNMENT HAS SURVIVED AND HIS POSITION IS SOMEWHAT
STREGTHZMZB UNDER BHUTTO'S CONTINUING PATRONAGE. TROUBLE-
MAKERS K. H. MEER AND NIAZI HAVE BEEN CHASTIZED. AN INCREASE
OF 45 PER CENT IN WHEAT PRICE SUPPORT HAS TAKEN SOME OF THE EDGE
OFF THE RURAL SECTOR'S BITTERNESS PREVALENT IN THE SUMMER.
FAIR PRICE SHOPS HAVE CUSHIONED THE IMPACT OF INFLATION IN
THE URBAN CENTERS.
10. IN SIND, THE CABINET OF GHULAM MUSTAFA JATOI IS POPULAR,
ESPECIALLY AMONG THE RURAL SINDHIS. THERE IS EVIDENCE THAT
HE HAS MADE MODEST INROADS AMONG THE CITY DWELLERS, URDU
SPEAKERS, INDUSTRIALISTS, AND MUHAJIRS (REFUGEES), FOUR
OFTEN OVERLAPPING CATEGORIES. A SIND CABINET RESHUFFLE
IN LATE OCTOBER RATIONALIZED DISTRIBUTION OF PORTFOLIOS,
BROUGHT IN TALENTED NON-LEGISLATORS TO SERVE IN "ADVISORY"
POSITIONS AND INTRODUCED THE SIND CABINET'S ONLY MUHAJIR/URDU
SPEAKER. THE SIND PPP IS MORE UNITED BUT NOT ANY BETTER
ORGANIZED THAN THE PUNJAB BRANCH. MUMTAZ BHUTTO, NOW IN
THE FEDERAL CABINET, HAS CONTINUED TO CRITICIZE RATO
N
DISAPPOINTING HOPES THAT THIS SOURCE OF DISCORD IN THE SIND
PPP WOULD BE REMOVED. SINDHI SUGARCANE GROWERS ARE NOT
COMPLAINING BUT COTTON GROWERS ARE. IN OCTOBER
THE GOP REMOVED THE EXCISE TAX ON COTTON YARN, PROVIDED
CREDIT TO GINNERS TO PAY FARMERS FOR THE PREVIOUS SEASON'S
CROPS, AND OFFERED A REDUCED BUT GUARANTEED FLOOR ON RAW
COTTON TO CUSHION THE IMPACT OF THE SLUMPING WORLD COTTON PRICES.
THIS LEFT THE FARMERS OF SIND AND PUNJAB DISCONTENTED BUT LESS
SO COMPARED WITH THREE MONTHS AGO.
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16
ACTION NEA-10
INFO OCT-01 ISO-00 CIAE-00 DODE-00 PM-03 H-01 INR-05 L-02
NSAE-00 NSC-05 PA-01 RSC-01 PRS-01 SP-02 SS-15
USIA-06 AID-05 COME-00 EB-07 FRB-01 TRSE-00 XMB-02
OPIC-03 CIEP-01 LAB-04 SIL-01 OMB-01 AGR-05 FEA-01
SAM-01 STR-01 SWF-01 /087 W
--------------------- 128252
R 090500Z DEC 74
FM AMEMBASSY ISLAMABAD
TO SECSTATE WASHDC 7903
INFO AMEMBASSY DACCA
AMEMBASSY KABUL 4414
AMCONSUL KARACHI
AMCONSUL LAHORE
AMEMBASSY NEW DELHI
AMEMBASSY TEHRAN
C O N F I D E N T I A L SECTION 3 OF 5 ISLAMABAD 11424
11. IN BALUCHISTAN, BHUTTO'S SURROGATES SEEM EVEN MORE
ENSCONCED IN THE SEAT OF POWER THAN EARLIER, WITH THE CORRUPT,
INEFFECTUAL MINISTRY OF CHIEF MINISTER JAM QADIR ABLE
TO COUNT ON A NARROW BUT SAFE PARLIAMENTARY MAJORITY. THE
SMALL, AMORPHOUS PPP WAS REORGANIZED IN MID-OCTOBER AND
BHUTTO HAS HAD SOME LUCK IN ROPING INTO THE PARTY SECOND-
LEVEL BALUCH TRIBAL CHIEFTAINS PLUS SOME PATHANS INTERESTED
IN GOVERNMENT PATRONAGE. CHIEF MINISTER QADIR IS EXPECTED
TO ANNOUNCE HIS CONVERSION TO THE PPP SOON. THE PPP'S
IMAGE CULTIVATED IN ISLAMABAD, SIND AND PUNJAB IS PROBABLY
IRRELEVANT IF NOT UNCONGENIAL TO THE BALUCH/PATHAN ENVIRONMENT,
HOWEVER, AND THE CORRUPTION OF THE PRESENT PROVINCIAL
RULERS LIMITS AND DISTORTS THE DEVELOPMENT IMPACT OF FEDERAL
MONEY AND PERSONNEL.
12. IN THE NWFP THE PPP-LED COALITION CONTINUES TO CONTROL
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THE PROVINCIAL ASSEMBLY WITH ENHANCED STRENGTH. IN NOVEMBER
SEVEN MEMBERS OF THE PROVINCIAL ASSEMBLY (INCLUDING CHIEF
MINISTER GANDAPUR AND FOUR OTHER MINISTERS) JOINED THE PPP
TO GIVE IT 13 SEATS IN THE 42-SEAT HOUSE. ALTHOUGH THIS
STRENGTHENS BHUTTO'S CONTROL OVER THE GOVERNMENT COALITION,
IT PROBABLY ADDS A NEW DIMENSION OF FACTIONAL INFIGHTING
WITHIN THE PROVINCIAL PARTY AND MAY REPRESENT A CHALLENGE
TO SENIOR MINISTER SHERPAO'S LEADERSHIP. THE PPP, HOWEVER,
REMAINS A SKELETAL ORGANIZATION WITH LITTLE PUBLIC APPEAL.
AS IN BALUCHISTAN, THE PPP'S SECULAR AND SOCIALIST PROGRAM
IS SUSPECT AND TO SOME EXTENT IS CONSIDERED AN "OUTSIDE"
FORCE WHICH THREATENS LOCAL ASPIRATIONS. SHERPAO HIMSELF IS
NOT AN IMPRESSIVE LEADER AND HAS FAILED TO WIN POPULARITY
WITH OTHER POLITICIANS OR WITH THE GENERAL PUBLIC. HE
SURVIVES ONLY BECAUSE HE IS BHUTTO'S AGENT.
13. THE OPPOSITION. THE GOP CONTINUES TO REPRESS OPPOSITION
POLITICAL ACTIVITY. THERE IS A STRONG ELEMENT OF OVERKILL IN THIS
APPROACH: THE MEASURES TAKEN TO PROVENT THE OPPOSITION
PARTIES FROM GETTING THEIR MESSAGE TO THE PUBLIC SEEM TO GO
WELL BEYOND THE CHALLENGE THESE WEAK AND DIVIDED GROUPINGS
POSE TO BHUTTO AND HIS REGIME, PARTICULARLY IN THE PUNJAB AND
SIND. IN ITS FRUSTRATION, THE OPPOSITION, NEVER NOTED FOR
THE RESPONSIBILITY OF ITS POLITICAL APPROACH, HAS BECOME
INCREASINGLY SHRILL AND OUTLANDISH IN ITS CHARGES AGAINST THE
PRIME MINISTER AND ALL HIS WORKS.
14. GOVERNMENT AND PPP SPOKESMEN CONTINUE TO DENOUNCE THE
NATIONAL AWAMI PARTY AND ITS LEADER WALI KHAN FOR SEDITIOUS
ACTIVITIES IN BALUCHISTAN AND NWFP, BUT HAVE AS SO FAR BEEN
UNSUCCESSFUL IN WHAT SEEMS TO BE THEIR EFFORT TO BRING ABOUT
AN ALIENATION BETWEEN THE NAP AND OTHER CONSTITUENTS OF THE
UNITED DEMOCRATIC FRONT. IN RESPONSE TO A SERIES OF BOMB
EXPLOSIONS IN PUBLIC PLACES, ESPECIALLY IN AND AROUND
PESHAWAR AND QUETTA, THE GOVERNMENT ISSUED AN ORDINANCE
SETTING UP ONE-JUDGE COURTS FOR ACCELERATED TRIALS OF SUSPECT
SABOTEURS. THESE NEW PROCEDURES HAVE MOSTLY BEEN USED
AGAINST FRONTIER AND BALUCHISTAN NAP OFFICIALS: WHILE SOME
OF THE ACCUSED MAY BE GUILTY OF SUBVERSION OR SABOTAGE, THE
PROCEDURES CIRCUMVENT MANY ASPECTS OF NORMAL JUDICIAL PROTECTION.
THE GOP MAINTAINS THEY ARE NECESSARY TO MEET LEGITIMATE
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SECURITY REQUIREMENTS. CRITICS CONSIDER THEM ANOTHER WAY TO
INTIMIDATE AND REPRESS THE GOVERNMENT'S FOES.
15. THE OPPOSITION TO BHUTTO REMAINS STRONGEST IN THE
FRONTIER WHERE THE NAP CONTINUES TO BE A MAJOR POLITICAL
FORCE. THE GOVERNMENT HAS BEEN UNABLE TO BREAK THE SPIRIT
OF THE PARTY OR DRAW OFF SUPPORT FROM IT BY ITS POLICY OF
MASS ARRESTS OR BY ITS CONTINUING CAMPAIGN OF LINKING NAP
WITH AFGHANISTAN AND THE BOMB EXPLOSIONS. MANY NAP MILITANTS
WOULD PREFER THAT WALI KHAN CONCENTRATE HIS ATTENTION ON
REGIONAL ISSUES AND PATHAN GRIEVANCES AGAINST OUTSIDE CONTROL.
WALI AND THE MODERATE NAP LEADERSHIP, HOWEVER, APPEAR TO BELIEVE
THAT BY FOCUSING ON NATIONAL ISSUES, IN COLLABORATION WITH
THE OTHER UDF PARTIES, THEY CAN UNDERMINE BHUTTO'S POSITION
AND FORCE HIM TO COME TO AN UNDERSTANDING WITH THE OPPOSITION.
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ACTION NEA-10
INFO OCT-01 ISO-00 CIAE-00 DODE-00 PM-03 H-01 INR-05 L-02
NSAE-00 NSC-05 PA-01 RSC-01 PRS-01 SP-02 SS-15
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OPIC-03 CIEP-01 LAB-04 SIL-01 OMB-01 AGR-05 FEAE-00
SAM-01 STR-01 SWF-01 /086 W
--------------------- 000357
R 090500Z DEC 74
FM AMEMBASSY ISLAMABAD
TO SECSTATE WASHDC 7905
INFO AMEMBASSY DACCA
AMEMBASSY KABUL
AMCONSUL KARACHI
AMCONSUL LAHORE
AMEMBASSY NEW DELHI
AMEMBASSY TEHRAN
C O N F I D E N T I A L SECTION 4 OF 5 ISLAMABAD 11424
16. ALTHOUGH THE GOVERNMENT IN MID-SUMMER WAS FACED WITH
A MULTITUDE OF PROBLEMS, THE OPPOSITION FAILED TO EXPLOIT
THEM TO GOOD ADVANTAGE. BHUTTO WAS ABLE TO CLAIM CREDIT
FOR "SOLVING" THE AHMADIYA PROBLEM. OPPOSITION CHARGES
OF GOVERNMENT REPRESSION IN BALUCHISTAN DID AROUSE PUBLIC
CONCERN BUT AS THE HEAT OF THE INSURGENCY HAS DIMISHED THIS
ISSUE IS LESS LIKELY TO ATTRACT PUBLIC ATTENTION. THE UDF
FORAY INTO THE CHANCERIES OF ISLAMABAD TO PUBLICIZE THE
BALUCHISTAN SITUATION WAS GENERALLY UNPOPULAR. AND, OUTSIDE
THE UDF THE TEHRIK-I-ISTIQLAL HAS FACED PROBLEMS OF LEADERSHIP
PLUS THE USUAL MEDIA BLACKOUT; ITS ANTI-SOCIALIST AND RULE
OF LAW APPEAL SEEM TO HAVE A SELECTED AND LIMITED IMPACT
AMONG THE UPPER MIDDLE CLASS AND INTELLIGENTSIA.
17. OTHER ELEMENTS: STUDENTS, LABOR, PROFESSIONALS AND
THE MILITARY. STUDENTS ON THE WHOLE ARE SKEPTICAL OF THE
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PPP AND DO NOT LIKE BHUTTO BUT ARE NOT MOTIVATED ENOUGH TO
TAKE TO THE STREETS OR ORGANIZE. THE JAMAAT-I-ISLAMI (JI)
AND OTHER CONSERVATIVE GROUPS CONTINUE TO LEAD STUDENTS'
ORGANIZATIONS IN SIND AND PUNJAB. AFTER A PERIOD OF CHAOS
AND VIOLENCE AT PUNJAB UNIVERSITY, THE STUDENTS THERE AND
IN SIND ARE UNUSUALLY QUIET. IN BALUCHISTAN AND NWFP,
THE STUDENT ORGANIZATIONS APPEAR TO BE IN THE FOREFRONT
OF DEMANDS FOR GREATER REGIONAL AUTONOMY (AND PREFERENTIAL
EMPLOYMENT OPPORTUNITIES FOR LOCALS) AND MAY BE INVOLVED
IN SOME OF THE BOMBINGS.
18. THE PPP IS NO LONGER AS POPULAR AS WAS WITH INDUSTRIAL
LABORERS: DESPITE GOVERNMENT MANDATORY WAGE INCREASES
AND SUBSIDIZED FOOD, INFLATION QUICKLY ERODES ALL GAINS
AND THE GOP'S LABOR LEGISLATION SEVERELY RESTRICTS UNIONS' ROLE.
THE SALARIED AND PROFESSIONAL CLASSES HAVE BEEN HARDEST
HIT BY INFLATION AND GOVERNMENT DOCTORS, ENGINEERS, ACCOUNTANTS,
ETC., HAVE AGITATED FOR GREATER PAY, STATUS AND PERQUISITES.
IT IS THIS MIDDLE-CLASS URBAN ELEMENT THAT CONTINUES TO
DISAPPROVE OF BHUTTO BECAUSE OF HIS AUTHORITARIAN STYLE.
19. THE MILITARY HAS TWO FRUSTRATIONS: THE LACK OF ARMS
COMPARABLE IN QUANTITY AND QUALITY TO INDIA'S AND AFGHANISTAN'S
AND THE CONTERINSURGENCY OPERATIONS IN BALUCHISTAN. PENDING
ANY CHANGE IN US ARMS SUPPLY POLICY, THE GOP IS PROCEEDING
WITH ARMS PROCUREMENT IN SEVERAL AREAS AND LOANS FROM OIL
PRODUCERS HAVE INCREASED THE FUNDS AVAILABLE. THE BALUCHISTAN
INSURGENCY REPRESENTED TO MANY IN THE MILITARY THE DIVERSION
OF RESOURCES AWAY FROM DEFENSE OF THE INTERNATIONAL BORDERS,
THE FRUSTRATION OF BEING UNABLE TO SEIZE THE INITIATIVE
FROM THE INSURGENTS (UNTIL THE ARMY WAS UNLEASED IN AUGUST),
AND A SENSE OF DISTASTE FOR OPERATIONS AGAINST THEIR OWN
COUNTRYMEN. BY LATE NOVEMBER, HOWEVER, THE SECURITY
SITUATION IN BALUCHISTAN WAS MUCH IMPROVED AND THE MILITARY
HOPE TO BE ABLE TO TURN OVER AS MUCH RESPONSIBILITY AS POSSIBLE
TO THE LOCAL CIVIL
ADMINISTRATION. EMBASSY CONTACTS WITH
MILITARY OFFICERS OF THE RANK OF MAJOR AND ABOVE LEAD US TO CON-
CLUDE THAT THE SERVICES WILLINGLY ACCEPT THE IDEA OF CIVILIAN
CONTROL AND ARE LOYAL TO BHUTTO AND HIS GOVERNMENT BUT ARE
GENERALLY CRITICAL OF THE PPP AND ITS SOCIALIST SLOGANS. THROUGH-
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OUT THE CONFLICT AND CONTROVERSY SURROUNDING THE AHMADIYA
ISSUE, THE ARMY DEMONSTRATED ITS EFFECTIVENESS AND DISCIPLINE
AND BORE THE BRUNT (WITH THE FEDERAL SECURITY FORCE) OF
HOLDING A TOUGH LINE AGAINST DISORDER.
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ACTION NEA-10
INFO OCT-01 ISO-00 CIAE-00 DODE-00 PM-03 H-01 INR-05 L-02
NSAE-00 NSC-05 PA-01 RSC-01 PRS-01 SP-02 SS-15
USIA-06 AID-05 COME-00 EB-07 FRB-01 TRSE-00 XMB-02
OPIC-03 CIEP-01 LAB-04 SIL-01 OMB-01 AGR-05 FEA-01
SAM-01 STR-01 SWF-01 /087 W
--------------------- 128540
R 090500Z DEC 74
FM AMEMBASSY ISLAMABAD
TO SECSTATE WASHDC 7906
INFO AMEMBASSY DACCA
AMEMBASSY KABUL
AMCONSUL KARACHI
AMCONSUL LAHORE
AMEMBASSY NEW DELHI
AMEMBASSY TEHRAN
C O N F I D E N T I A L SECTION 5 OF 5 ISLAMABAD 11424
20. ECONOMIC PROBLEMS PERSIST. IN THE ECONOMIC SPHERE THE
SUBSTANTIAL HURDLES OF THE SUMMER STILL FACE THE
GOVERNMENT. THE ANNUAL RATE OF INFLATION CONTINUES AT
BETWEEN 25-30 PERCENT. A POOR MONSOON, LOW SNOW MELT AND A
PREMATURE RELEASE OF WATER FROM THE DAMAGED TARBELA
RESERVOIR ALL ADVERSELY AFFECT PROSPECTS FOR THE IMPORTANT
WHEAT CROP NOW BEING PLANTED. LACK OF WATER ALSO REDUCED
THE SUMMER COARSE GRAIN CROPS AND LOW FOOD STOCKS CAUSED THE
GOVERNMENT TO INCREASE PLANS FOR WHEAT IMPORTS FROM ONE TO
1.5 MILLION TONS. INDUSTRIAL PRODUCTION WILL BEAR THE BRUNT
OF THE SHORTAGE OF POWER EXPECTED FROM ABOUT THE MIDDLE
OF DECEMBER TO THE END OF MARCH. PRODUCTION WILL CERTAINLY
BE ADVERSELY AFFECTED, EMPLOYMENT NOT TO BE SAME EXTENT
BECAUSE THE GOP WILL RESIST ANY MAJOR FACTORY SHUTDOWNS
OR LAYOFFS. AS MENTIONED EARLIER, THE GOVERNMENT RESPONDED
TO THE PROBLEMS OF COTTON GROWERS AND TEXTILE PRODUCERS
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THROUGH A SERIES OF RELIEF MEASURES BUT INFLATION WILL BE
FUELED BY THE RESULTANT IMBALANCE IN THE BUDGET. PRICES OF
MAJOR EXPORTS HAVE REMAINED STEADY OR FALLEN BUT THE COST
OF MANY IMPORTS HAS CONTINUED TO RISE. DEVELOPMENT PRO-
GRAMS APPEAR TO BE THE LIKELY CASUALTY. THE GOP APPEARS
TO BE ABLE TO MEET ITS IMPORT REQUIREMENTS THIS FISCAL
YEAR AS A RESULT OF FOREIGN LOANS AND IMF DRAWINGS,
BUT PAKISTAN'S LONGTERM BALANCE OF PAYMENT POSITION IS NOT
PROMISING.
21. SHORT-TERM PROGNOSIS. THE NEXT QUARTER WILL SHOW
WHETHER BHUTTO'S CABINET RESHUFFLE AND PARTY REORGANIZATION
HAVE SUCCEEDED IN REDUCING FACTIONALISM AND BRINGING IN
NEW ELEMENTS OF STRENGTH WITHOUT ALIENATING OLD SUPPORTERS.
ALTHOUGH THE ELECTION COMMISSION IS PROCEEDING TO UPDATE
THE ELECTORAL ROLLS AND REDEFINE CONSTITUENCIES, RUMORS
OF GENERAL ELECTIONS IN THE SPRING OF 1975 HAVE FADED AND
BOTH THE PM AND PRESIDENT HAVE DENIED THAT THEY WILL BE
HELD BEFORE 1977. LOCAL BODY ELECTIONS ARE PRESENTLY
PLANNED IN THE PROVINCES TO TAKE PLACE FROM APRIL, THE SAME
MONTH WHEN AZAD KASHMIR WILL GO TO THE POLLS. THESE MAY
SET THE STAGE FOR PROVINCIAL AND GENERAL ELECTIONS LATER.
22. THE GOVERNMENT IS EXPECTED TO BE ABLE TO CONTINUE
TO CONTROL UNEASY COALITIONS IN BALUCHISTAN AND NWFP.
IN BALUCHISTAN, THE GOP IS LIKELY TO CONTINUE ALONG THE
SAME PATH, PURSUING THE MENGAL REBALS AND SUPPORTING THE
PRESENT COALITION, WHILE BUILDING UP THE PPP AND ITS
ALLIANCES WITH MINOR SARDARS AND SETTLED AGRICULTURALISTS.
IN NWFP, THE COALITION, ALTHOUGH FOUNDED ON OPPORTUNISM,
APPEARS SAFE. ALTHOUGH THE GOP DOES NOT APPEAR ABLE TO
HALT THE OCCASIONAL TERRORIST'S BOMB, THESE ARE AN EMBARRASS-
MENT, NOT A THREAT. THE GOVERNMENT'S SUMMARY COURTS FOR
ACCUSED SABOTEURS ARE EXPECTED TO RESULT IN PREARRANGED
CONVICTIONS LINKING NAP WITH AFGHAN-SUPPORTED SUBVERSION.
JUDGING BY ITS PAST PERFORMANCE, THE GOP WILL, HOWEVER,
PERMIT THE OPPOSITION TO EXIST. BHUTTO PROBABLY FEELS
THAT IT IS SO INEFFECTIVE THAT IT CAN SAFELY BE PERMITTED
TO OPERATE AND WILL EVEN PROVIDE A FOIL FOR THE GOP. IF
REGIONAL DISCONTENT CAN BE MUTED IN THESE FRONTIER AREAS,
THE PURPORTED POINT OF AFGHAN HOSTILITY MAY BE DEFLECTED.
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23. ONLY TIME, TOO, WILL TELL WHETHER THE GOP'S PUBLIC
APPEALS AND ECONOMIC POLICIES WILL INCREASE INVESTMENT,
AGRICULTURAL AND INDUSTRIAL PRODUCTION AND CUSHION
INFLATION. GOP IMPORTUNINGS TO THE PRIVATE SECTOR MAY BE
SLOW IN OVERCOMING SKEPTICISM. EACH TIME THE PM EMBARKS
ON HIS SPEAKING TOURS HE REVERTS TO SOCIALIST RHETORIC
WHICH MAY STRENGTHEN THE PPP'S IMAGE AS THE PARTY OF THE
MASSES BUT ONLY DISCOURAGES THE PRIVATE INVESTMENT NEEDED
TO FUEL THE ECONOMY. BENEATH THE SURFACE CALM IN THE
CITIES LIES THE POTENTIAL FOR DISORDER AND VIOLENCE AMONG
THE DISAFFECTED STUDENTS, LABOR AND SALARIED MIDDLE
CLASSES, WHO HAVE SO FAR LACKED THE ORGANIZATION OR THE WILL
TO TAKE TO THE STREETS.
24. STILL, BHUTTO IS MASTER IN HIS OWN HOUSE, WITH NO
PEERS WITHIN HIS PARTY AND NO EFFECTIVE CHALLENGERS FROM
WITHOUT. HIS GOVERNMENT'S PRESTIGE AND POPULARITY HAVE
RISEN AND THE PUBLIC APPEARS TO BE WILLING TO WAIT AND
SEE IF HE AND HIS REORGANIZED MINISTRY CAN MOVE FORWARD TO
RESOLVE THE MANY PROBLEMS BESETTING PAKISTAN.
BYROADE
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