This record is a partial extract of the original cable. The full text of the original cable is not available.

C O N F I D E N T I A L SECTION 01 OF 06 NEW DELHI 005925 
 
SIPDIS 
 
E.O. 12958: DECL: 07/26/2015 
TAGS: PGOV PREL PTER MOPS ECON ASEC PBTS IN PK
SUBJECT: KASHMIRIS: INDIA NOW HOLDS ALL THE CARDS, BUT WILL 
IT PLAY THEM? 
 
Classified By: Political Counselor Geoff Pyatt for Reasons 1.4 (B, D) 
 
¶1. (C) SUMMARY: A survey of Kashmiri political opinion in 
Srinagar, Jammu, and Delhi indicates a consensus that India 
is in a magisterial position right now: our contacts assess 
that India's strategic stock is secure and rising on the 
heels of the PM's visit to Washington; they agree the mood of 
people in the Valley has swung against terrorism and 
violence; the Kashmir economy (including tourism) is booming; 
they view the political scene in Kashmir as fragmented; the 
unceasing terrorism in the Valley is viewed by an inured 
public as manageable and has lost its shock value and 
consequent political impact; and, Pakistan, as viewed from 
J&K, is on its back foot after the London blasts, Ayodhya 
attack, and American pressure.  These observers told us 
Kashmiris can see the handwriting on the wall:  India's might 
is waxing, but Pakistan is vulnerable, increasingly isolated, 
and facing its own internal demons.  As a result, our 
contacts believe Delhi is in no hurry to draw the Hurriyat or 
any other Kashmiris into a dialogue on meaningful political 
autonomy, nor does it feel pressed to make a quick deal with 
Pakistan, no matter how much the latter parties may be ready 
to talk.  Moreover, one MP and another senior GOI Kashmiri 
official say the PM and Sonia Gandhi do not seem to want to 
make deals in Kashmir because they may fear they are 
vulnerable to BJP accusations that they are selling out the 
country.  Kashmiris are happy that the bad days are fading 
into memory, but they do wish Delhi would be magnanimous and 
throw them (and Pakistan) a face-saving bone to justify all 
the deaths and suffering of the past 15 years.  END SUMMARY. 
 
WE'RE RESIGNED TO CASTING OUR LOT WITH A RESURGENT INDIA 
--------------------------------------------- ----------- 
 
 ¶2. (C) D/Polcouns visited Srinagar and Jammu July 18-21 to 
test the pulse of current Kashmiri thinking about the 
insurgency, India, and political dialogue.   Everyone we 
spoke to, from senior police officials to moderate Hurriyat 
types to journalists to educators to businessmen to MPs, said 
the biggest news in the Valley is the sea change in the 
popular mood.  Long gone and faded into bitter memory are the 
heady days of 1990 when the Valley was awash in green signs 
demanding independence, violence was pervasive, India was 
reeling from the collapse of the Soviet Empire, and prominent 
Kashmiris were handing each other Ambassadorships for a new 
independent Kashmiri country.  Instead, Kashmiris now say 
that the mood has profoundly turned.  Kashmiris are casting 
their lot with a return to status quo ante and the good old 
days when peace prevailed and life was normal.  They stressed 
that this was in no way a vote for India; rather, it was a 
vote to be left alone to lick their wounds and rebuild their 
lives.  However, they also acknowledge that India's economic 
strength and solid political position also made it clear that 
Kashmiris only have one real option for now: continued 
existence within India.  Arjun Joshi of the Hindustan Times 
in Jammu said the changed mood reflects the awakening of 
Kashmiris to new global realities; "the flirtation with 
extremism," he said, was over, and innate moderation was 
re-asserting itself.  Joshi said voices of moderation 
silenced by terrorism are proliferating, and even an 
extremist such as Ali Shah Geelani spoke of autonomy, not 
independence, when he visited Pakistan.  Mehbooba Mufti, the 
Chief Minister's daughter, and herself head of the governing 
PDP party, said people everywhere are optimistic and are no 
longer swept away by slogans. 
 
INDIA HOLDS A ROYAL FLUSH, PAKISTAN HAS THE JOKER 
--------------------------------------------- ---- 
 
¶3. (C) India, many opined, is in great strategic shape right 
now.  Manmohan Singh's splashy Washington trip was noticed as 
much for the nuclear deal as Washington's low-key handling of 
Kashmir.  Pakistan, Kashmiris told us, is in a vulnerable 
position; the Ayodhya attack happened right before Gleneagles 
and Manmohan took full advantage of it, standing side-by-side 
with Blair and the President.  The London tube attack then 
drove home India's argument that Pakistan was riding a tiger 
of its own making.  National Conference President Omar 
Abdullah told us Kashmiris can see the handwriting on the 
wall:  India's strength is waxing, but Pakistan is 
vulnerable, increasingly isolated, and facing its own 
internal demons.  Abdullah also said the rise in 
infiltration, as had happened in Gurez sector as we spoke, 
revealed Pakistani desperation.  Political scientist Amitabh 
Mattoo of Jammu University told us that India "holds all the 
cards" right now.  J&K Police Chief Director General Gopal 
Sharma predictably echoed this sentiment.  Hurriyat leaders 
Bilal Lone and Professor Abdul Ghani Bhat insisted the 
Pakistani establishment is ready to impatient to work a deal 
with India, but would not ascribe such eagerness to 
desperation. 
 
WHY A PASSAGE BACK TO INDIA? RESIGNATION; BUT CASH, TOO 
--------------------------------------------- ---------- 
 
¶3. (C) After 15 years of bloody violence and dashed political 
dreams, Kashmiris told us they are realizing that Pakistan 
and India will never allow the area to be independent. 
Professor Bhat said even the most zealous such as Geelani now 
realize independence is a mirage and talk only of autonomy. 
Moreover, Kashmiris realize that Pakistan has been just as 
fickle and manipulative in its dealings with Kashmiris as 
India had historically been, stooping to assassinate 
prominent Kashmiris whenever they deviated from the party 
line dictated from Islamabad.  Bilal Lone spoke particularly 
bitterly about what he called the Geelani/Pakistani role in 
his father's death.  In addition, the elites and common 
people now understand that India is not going to cut and run, 
no matter how bad the violence gets.  At the same time, 
prominent banker A.Y. Khan explained to us that as people 
hunkered down for the long years of violence, they sent their 
sons and daughters to school in every part of India, opened 
shops and businesses in Himachal, Delhi, Rajasthan, 
Bangalore, and Punjab, and, ironically, prospered mightily. 
Here's how he explained it:  the already-rich elites in 
Kashmir had been taking money from India (the RAW and the IB) 
for a long time.  Then, money started flowing in from 
Pakistan.  In addition, radical Islamic money flowed in from 
all over the world.  The end result was a situation where 
cash was abundant in Kashmir, and much of that cash was 
invested where it was safe:  in businesses and factories and 
educations in an India that was finally beginning to prosper 
economically.  One symptom of this cash boom, said educator 
Vijay Dhar, is that prices of real estate in the Valley have 
increased 50-60 percent per annum since the violence began, 
and there is no end in sight.  The rows of small mansions on 
the road from Srinagar airport bear witness to this 
phenomenon.  Another symptom, said J&K Agriculture Secretary 
Khursheed Ganai, is that Kashmiris, whose horticultural 
products are renowned, invested heavily in less efficient 
Himachal orchards that are closer to the Delhi market, and 
they now make a killing in the north Indian fruit market. A 
third consequence, noted Dhar, is that Kashmiris' children 
received blue-chip educations at elite Indian schools and are 
now productively employed in the Indian corporate sector. 
Finally, two businessmen told us Kashmiri handicrafts 
salesmen moved their shops and inventories directly into the 
rest of India and the world, eliminating the middlemen and 
boosting sales. 
 
EVEN TOURISM IS FLOURISHING IN THE FACE OF CONTINUED TERRORISM 
--------------------------------------------- ----------------- 
 
¶4. (C) We were surprised to see all flights to Srinagar and 
Jammu sold out.  Poloffs' flight was packed with businessmen, 
hippie backpackers, government workers, and Hindu pilgrims. 
The fancy hotel in Srinagar was gleaming, and full of 
government types, diplomats, and well-heeled North Indian 
pilgrims to Hindu shrines.  Srinagar streets were thick with 
cars from all over North India, and one businessman told us 
the Indian tourists are spending a million dollars a day on 
local goods and services.  An hotelier said the boom times 
are back, and added he was spending a lot to refurbish and 
expand.  We met a lower-middle class-looking chap ("I'm a 
betel nut salesman") with his wife and son who told us he had 
spent $2500 (a large sum for an average Indian's holiday) on 
a two-day helicopter trip to see a Hindu shrine in the 
Himalayas outside Srinagar.  There were so many more like 
him, perhaps not as well-heeled.  Even in the best of times, 
tourism represented only fifteen percent of the Kashmiri 
economy, said banker AY Khan.  That sector, so visible as a 
barometer of economic prosperity, has taken off with a 
vengeance.  We heard estimates that as many as 600,000 
tourists may visit J&K this year.  While well-heeled 
Westerners have still not returned, the Indian presence has 
marked a strong resurgence for a Valley where, for ten years, 
not a tourist was to be seen.  The net effect for Kashmiris 
is a sense that the good old days are starting to come back, 
albeit tinged with bitter memory.  Everyone from cab drivers 
to Shikara boatmen had a big smile about tourist cash.  For 
India, it means that 15 years of holding on -- no matter what 
-- have started to pay off, and the downhill stretch, albeit 
bumpy with repeated terrorism, now looms.  Like Tel Aviv and 
Jerusalem residents, Indians have a long acquaintance with 
terrorism in their cities, and they understand its random 
nature; this may contribute to their appetite for tourism to 
J&K despite the almost-daily litany of throats slit, grenades 
thrown, shootouts in bazaars with troops, and car bombs. 
 
DIVIDE AND RULE HAS SUCCEEDED MAGNIFICENTLY 
------------------------------------------- 
 
¶5. (C) Another reason for Kashmiri's change in mood is the 
realization that neither India nor Pakistan had any intention 
of allowing a legitimate Kashmiri leader to emerge to fulfill 
their national aspirations.  Even Hurriyat members 
acknowledged that their political strength was 
geographically-based, with each member perhaps able to secure 
a handful of seats in the J&K legislature, were they to 
contest elections.  Bilal Lone acknowledged that his Hurriyat 
faces an uphill battle to get Kashmiris to unite.  Everyone 
we spoke to complained that nationalist leaders who had 
captured the public imagination and earned its respect ended 
up either bought or dead.  Neither India nor Pakistan had the 
slightest interest, they said, in seeing a true leader 
evolve.  The result, these analysts and practitioners told 
us, is a political geography that is splintered.  One 
journalist, Saleem Pandit of the Times of India, said none in 
the Hurriyat spoke for Kashmiris; they merely spoke for 
themselves.  Omar Abdullah of the National Conference said 
that there are two competing Hurriyats (each of which is 
itself fragmented), several violent rejectionist groups, many 
parties coopted into government, Hindus (themselves 
splintered), Sikhs, and Buddhists, and, of course, the 
apolitical.  Others lamented that the days when Farouq 
Abdullah's father could command the respect and votes of 
virtually the entire Valley are gone forever. 
 
WE HAVE BECOME ACCUSTOMED TO THIS LEVEL OF VIOLENCE 
--------------------------------------------- ------ 
 
¶6. (C) Perhaps the saddest thread of explanations we heard 
for this change of mood came from natives to the Valley who 
told us that the area was safe and crime-free for many 
decades, but now has become accustomed to violence. 
Kashmiris from old families said that, when compared to the 
bloodshed they passed through in the mid-1990s, today's 
violence is almost unremarkable.  We saw this for ourselves: 
when a suicide bomber killed four soldiers in a government 
neighborhood in Srinagar on July 20, daily life in other 
parts of the city continued without stop.  The only people 
who were rattled were students and parents at a school close 
to the explosion.  When we passed the scene an hour later, 
traffic flowed and clean-up was well underway.  Kashmiris 
lamented that this acceptance of violence means that violence 
as a political means has lost its effectiveness.  The people 
no longer are shocked by it, they do not support it, and it 
has now become bad for the tourist business.  Thus, India, 
which had always demonstrated it would ride out whatever the 
terrorists threw at it in order to keep Kashmir, feels even 
more secure in coping with the weekly onslaught of 
low-intensity warfare directed against it.  As a result, said 
Police Chief Sharma, the one remaining lever Pakistan had in 
Kashmir is now manageable.  In fact, said Sharma, the 
terrorists are undermining their own cause with all their 
senseless violence. 
 
SO WHITHER THE POLITICAL DIALOGUE? WILL IT WITHER? 
--------------------------------------------- ----- 
 
¶7. (C) Kashmiris were divided over the direction and speed of 
the political dialogue with Delhi.  The Hurriyat, including 
Professor Bhat, Yasin Malik and Bilal Lone, still starry-eyed 
over their meetings with Musharraf, insisted that they could 
deliver the Pakistanis and, by consequence, end the terrorism 
in the Valley.  Others, such as Police Chief Sharma snorted 
with skepticism and said the terrorists were out of 
Pakistan's control anyway and the Pakistanis would use the 
Hurriyat just as cynically as they had used other Kashmiri 
political leaders.  Amitabh Mattoo agreed that since Delhi 
held all the cards for now, it was in no hurry to send the 
Hurriyat in all its variegated hues any engraved invitations 
to take tea with the PM, especially after offending Delhi 
with their sashaying around Islamabad.  Hurriyat leaders such 
as Lone and Yasin Malik said that the longer Delhi lets them 
twist, the more vulnerable they become to skeptics who say 
the only thing they will get out of Manmohan Singh is "tea 
and samosas."  GOI Kashmir confidant Wajahat Habibullah told 
us that he has been urging the PM to reach out to the 
Hurriyat now, taking advantage of India's current strength. 
Yet, police contacts, perhaps reflecting the dominant GOI 
view, dismissed Hurriyat complaints, saying they are 
fragmentary, unelected, unable to deliver, and besides, the 
PM had already told them they were free to come to Delhi 
anytime they wanted.  Omar Abdullah insisted the Hurriyat 
does represent the aspirations for autonomy that still linger 
in Kashmiris, but he doubted Delhi would be magnanimous; Home 
Minister Shivraj Patel had snubbed them during his July visit 
to Srinagar.  Moreover, said Omar, if he, as a proven loyal 
Indian, couldn't get Shivraj to return his calls for the past 
six months, what could the Hurriyat expect?  We left Srinagar 
with the impression that the political dialogue between Delhi 
and Srinagar is subservient to the dialogue between Delhi and 
Islamabad, and many in Kashmir felt the dialogue between 
Delhi and Islamabad is currently moving slowly as the GOI 
waits for Pakistani action to restrain a surge in terrorist 
activities in north India.  Consequently, most folks in the 
Valley are in wait and see mode. 
 
SOME WONDER IF MANMOHAN'S HEART IS IN IT 
---------------------------------------- 
 
¶8. (C) One argument we heard again and again from senior 
politicians -- including Kashmiri National Conference MP AR 
Shaheen -- was that they doubted that PM Singh and Sonia 
Gandhi want to do much with Kashmir.  In the best of times, 
journalist Ved Bhasin said, Kashmir is "a pimple on the 
Indian elephant," sending only 6 MPs to the 585 seat Lok 
Sabha.  Nowadays, Kashmir is less of a front-burner issue 
than ever for the reasons stated above.  Moreover, the PM and 
Sonia -- one a Sikh bureaucrat, the other an Italian -- are 
vulnerable, Omar Farooq told us, to charges from the BJP and 
others that they would "sell out" India if they made any 
deals to cede some autonomy to Kashmir.  Yasin Malik, himself 
an ex-terrorist, said Vajpayee and Advani, ironically, would 
have been in better shape to be magnanimous, but he doubted 
Congress' desire to engage in the Kashmir minefield even 
though he felt a deal could be struck.  Nowadays in Delhi, 
Kashmiris also opined, nobody senior seems to be "running" 
the Kashmir account.  The RAW and IB have gone back to their 
old ways in Kashmir, the Home Ministry seems not to care, and 
there is nobody in the PMO who focuses on Kashmir, residents 
of the Valley say.  Theirs is an issue without a Delhi 
address in this administration, they believe.  Yasin Malik 
thought NSA Narayanan might be managing the dossier in Delhi, 
but was risk-averse. 
 
SO WHAT DO KASHMIRIS WANT? PEACE WITH (SOME) HONOR 
--------------------------------------------- ----- 
 
¶9. (C)  Amitabh Mattoo, Arun Joshi, Ved Bhasin, and Bilal 
Lone said India, as the senior and powerful player, could 
afford to appear to "lose" a little tactically to Kashmiris 
and to Pakistan in order to win strategically.  All Kashmiris 
seem to want after their long ordeal is some face-saving way 
out to justify all the sacrifice.  Not one family in the 
Valley has been unaffected.  Human rights group estimate 
30-35,000 have died.  Fifteen years of violence had taken a 
toll.  If India, our contacts argued, would throw Kashmiris a 
bone, then, the people of the Valley would accept status quo 
ante with resignation.  When pressed, they suggested that 
some measure -- even symbolic -- of enhanced autonomy would 
be key.  Moreover, Kashmiris asked that India should expand 
their ability to travel to, and trade with, Pakistani Kashmir 
and the rest of Pakistan.  Troops should withdraw from the 
daily life of the people and hew to the frontiers.  The J&K 
police should be the primary security service.  More 
Kashmiris should occupy senior positions across the J&K civil 
administration.  These measures, they said, would be very 
cheap for India and would allow peace with some measure of 
honor.  They wondered, however, whether India had any 
motivation at this juncture to make such a deal. 
 
COMMENT:  WHERE DO US INTERESTS LIE? 
------------------------------------ 
 
¶10. (C) COMMENT:  Kashmiris seem to believe some outline of a 
deal may be within grasp, but a resurgent India distracted by 
other political worries may not want to pay even a relatively 
low price for this.  If a lasting political settlement in 
Kashmir encourages soft borders and blunts Pakistani exports 
of terror, it could in time help ease the Pakistani 
establishment's traditional preoccupation with Kashmir and 
help to drive further normalization of Indo-Pak relations. 
In that sense, a Srinagar-Delhi deal is in our interests. 
Our challenge will be convincing the PM's advisors to invest 
any time on an issue so fraught with risks, so easily 
disrupted by terrorism, so linked to the temperature of 
Indo-Pak relations, and yielding so few readily-apparent 
domestic electoral rewards.  END COMMENT. 
Minimize considered. 
 
BLAKE