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President of Pakistan Announces Resignation

18 Aug 08

Pakistani president Pervez Musharraf has announced his resignation, which will lead to further political uncertainty as various factions compete to fill the resulting power vacuum in the fragile country, creating concerns for international allies.

Global Insight Perspective

 

Significance

The resignation of Pakistani president Pervez Musharraf follows 10 days of uncertainty, sparked by the civilian coalition's announcement that it would seek to impeach the president.

Implications

Musharraf's resignation leaves a power vacuum that is likely to be fought over by the partners of the civilian coalition, which are already locked in an uneasy and acrimonious partnership. It also creates significant concerns for international allies, which see Pakistan as of continued strategic interest but do not see a trusted leader emerging to take over power.

Outlook

The resignation may be met with short-term optimism as the civilian government promises to restore full democracy to the country. However, this is likely to be short-lived as the economy is likely to deteriorate further and the security situation will worsen as the ruling coalition remains in policy deadlock.

Pakistani president Pervez Musharraf today announced that he will resign in order to avoid impending impeachment proceedings. In a televised address to the nation he said: "After viewing the situation and consulting legal advisers and political allies, with their advice I have decided to resign. I leave my future in the hands of the people."

The announcement had taken observers by surprise as it followed a speech in which Musharraf denied that a single charge in the impeachment charge sheet, which included charges of gross misconduct and violation of the constitution, would stand against him. He had stated: "no charge can be proved against me because I never did anything for myself, it was all for Pakistan." In the address, he provided a detailed defence of his nine years in power, saying that there was now improved law and order and more deeply entrenched democracy in the country, and that it was an important player on the world stage. He finally proceeded to announce his resignation, citing the destabilising effect an impeachment would have on the country, and that he would submit the resignation to parliament later today.

Nawaz Sharif, one of the ruling coalition leaders and the former prime minister, hailed the decision as a "victory for the people of Pakistan", saying that the country was now finally free of a dictatorial regime. Celebrations have erupted in several cities across the country.

Musharraf, a former army general and a close U.S. ally in the "war on terror", seized power in a bloodless coup in 1999. His arrival in power was initially greeted with much optimism in Pakistan. The population welcomed the removal of the inept, corrupt, and economically disastrous tenure of Nawaz Sharif, and were keen to see a charming, liberal, and moderate man in power. He managed to secure strong economic growth and cracked down on Islamist extremists. However, challenges soon began to mount as his liberal aspirations were hampered by the conservatives he needed for support. His popularity began to suffer as his allegiance to the United States became increasingly evident and his marginalisation of mainstream parties allowed extremist politics to gain influence. His downfall began in March 2007, when he dismissed the independent-minded chief justice, Iftikhar Muhammad Chaudhry. The decision was met with widespread protests. His popularity plummeted in November 2007, when out of desperation he imposed temporary emergency rule over the country (see Pakistan: 6 November 2007: Pakistani Government Moves to Stifle Dissent over State of Emergency). A series of terror attacks, one of which killed opposition leader Benazir Bhutto in December 2007, was also blamed on his policies. Musharraf stepped down as head of the army in December 2007 after he was re-elected to the presidency in what is widely seen as a controversial election. His allies, the Pakistan Muslim League-Quaid-e-Azam (PML-Q), suffered significant losses in the February 2008 parliamentary election, which led to the establishment of a civilian coalition between Ali Zardari of the Pakistan Peoples Party (PPP) and Nawaz Sharif of the Pakistan Muslim League-Nawaz (PML-N).

Mounting Pressure Led to Resignation

The initial announcement by the civilian coalition that it was pressing ahead with plans to impeach Musharraf was met with defiance by the president (see Pakistan: 7 August 2008: Ruling Coalition Reportedly Agrees to Impeach Pakistani President). His spokesman denied that Musharraf was considering resignation throughout the days that leading up to today’s speech (see Pakistan: 11 August 2008: President of Pakistan to Refuse Resignation Despite Looming Impeachment). However, recent events had clearly put considerable pressure on Musharraf to resign. Last week, all four provincial assemblies adopted resolutions asking Musharraf to seek a fresh vote of confidence from the parliamentary electoral college, which comprises the provincial assemblies and the two houses of the national parliament. There would have been little chance for Musharraf to survive such a vote given the current make-up of the electoral college. Furthermore, the provincial assemblies voted against Musharraf in large numbers (see Pakistan: 12 August 2008: Bomb Hits Pakistani Air Force as Pressure on President Musharraf Mounts).

In addition, Musharraf’s allies either openly spoke out for his resignation or quietly distanced themselves from him. A key ally of the president, former interior minister Aftab Sherpao, last week said he would back moves to impeach Musharraf. Sherpao, who leads a breakaway faction of the PPP, said he changed his mind after speaking to Zardari. Although this move did not guarantee that the coalition would have gained the necessary two-thirds majority in parliament to unseat the president, it certainly brought them a step closer.

Meanwhile, both the army and the United States did not speak out strongly in favour of Musharraf. It is widely reported that the civilian coalition sought assurances from Army chief Kayani before announcing the impeachment that he would keep the army out of the proceedings. Kayani, while a strong ally of Musharraf, has made efforts to remove the army from political dealings. Without the staunch support of the military, Musharraf also did not have the options of dissolving parliament or imposing a fresh state of emergency. Finally, the United States had been surprisingly ambivalent towards their ally. The country had stated that the impeachment issue was an "internal matter"; U.S. secretary of state Condoleezza Rice yesterday told journalists that granting asylum to Musharraf was not under consideration.

As such, over the last few days it looked increasingly likely Musharraf was going to resign in exchange for immunity from prosecution (see Pakistan: 15 August 2008: Pakistani President Reportedly in Resignation Talks). The civilian coalition over the weekend gave him a two-day ultimatum to quit or face the charge sheet. The Saudi Arabian intelligence chief and officials from the United States and the United Kingdom have reportedly been involved in the resignation talks, sparking speculation that Musharraf may go into exile in Saudi Arabia, free from the threat of prosecution over his imposition of the state of emergency last year, and also safe from the numerous assassination attempts that had marred his presidency.

Outlook and Implications

Deadlock Between Ruling Coalition Partners Set to Continue as Musharraf’s Departure Leaves Power Vacuum

Although it is not clear exactly what will happen next to Musharraf, it is likely that the ruling coalition will continue to lock horns. The coalition had been caught in policy deadlock for several months, primarily over the reinstatement of the judges Musharraf had dismissed (see Pakistan: 13 May 2008: Pakistan's Ruling Coalition Fractures amid Disagreement over Reinstatement of Judges), and also on how to deal with Musharraf himself. These issues effectively paralysed the government and exposed the deep divide between the two parties, which still harbour competing ambitions and maintain a historically antagonistic relationship. While one of these issues has now been resolved by the resignation of Musharraf, his departure also threatens to expose further divides in the coalition in the absence of a common enemy. Furthermore, the president’s departure leaves a considerable power vacuum, which various factions in the coalition are likely to fight over. Sharif stated in his press conference that the democratic government would have to perform and prove to the people that democracy is capable of delivering on its promises. However, given Sharif’s previous record in government, and the continued tensions in the coalition, more infighting is likely in the short term.

Security Situation to Worsen as "War on Terror" Allies Approach Resignation with Caution

In the meantime, the security situation continues to deteriorate. Nearly 500 people, mostly suspected Taliban militants, have been killed in the last week in clashes in Bajaur in Pakistan’s tribal area bordering Afghanistan, displacing nearly 220,000 people. Sectarian fighting between Sunnis and Shi'as in Waziristan have left 200 people dead. Meanwhile, the threat of terror attacks in Pakistani cities remains significant (see Pakistan: 14 August 2008: Suicide Bombing Kills Eight in Pakistani City of Lahore), particularly in the wake of the recent message from al-Qaida’s deputy, Zawahiri, branding Musharraf an "enemy of Islam".

Musharraf's resignation will thus have particular international resonance because of his alliance with the United States since the terrorist attacks on September 11, 2001. Behind the scenes, the countries' relationship was never easy, as many in the United States were uncomfortable supporting someone whose democratic credentials were questionable, and success in combating the extremists was limited. The Taliban is once again resurgent in the tribal areas and these provide a key staging post for the escalating battles in Afghanistan. The U.S.-Pakistan relationship publicly soured last month when the U.S. military presented evidence that the Pakistani intelligence service helped plan the 7 July attack against India's embassy in the Afghan capital, Kabul. The United States pointedly confronted Prime Minister Yousaf Raza Gilani rather than Musharraf, acknowledging that the latter now carried little influence. The United States will now be very concerned over Pakistan's future. The country remains as important strategically as ever, not least given its nuclear arsenal, and the United States will be scrambling to recruit new allies in the political establishment. It is likely to look to the army to provide a measure of stability in the interim, as there is no trusted leader on the horizon. Afghanistan’s Ministry of Foreign Affairs expressed hope that the resignation would lead to a strengthening of government and democracy, resulting eventually in an improvement in security along their border.  

Economy Likely to Deteriorate 

The latest political convulsions come at a critical juncture for the economy, which is faced with mounting macro-economic pressures. Inflation has surged into double digits, fuelled by spiralling food and energy costs and by robust domestic demand growth. Consumer spending has been spurred by robust remittance inflows and negative real interest rates, while—more insidiously—government spending has risen unbridled. Reversing previous fiscal consolidation, the budget deficit has ballooned to around 8.0% of GDP, financed by inflationary borrowing by the government from the central bank. The lax fiscal stance compounded by still inadequate adjustments in state administered prices has inflated imports, pushing the trade balance deep into deficit. Truncating foreign investment inflows as confidence in the political outlook has deteriorated, has forced increasing reliance on short-term capital inflows for financing as foreign-exchange reserves have declined, increasing the exposure of the balance of payments to potential volatility. The State Bank of Pakistan has raised interest rates aggressively to dampen demand pressures and support the rupee exchange rate, but has stated emphatically that current pressures would not be relieved without significant reform by the government. Stock markets rallied on the news of Musharraf's resignation in hope that political uncertainty may clear. However, with political infighting set to escalate in the power vacuum since created, optimism may prove short lived as prospects dim for the decisive implementation of policy required to stabilise the economy.
 
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