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 
 
¶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