Media Conference Call: Pakistan's Parliamentary Election (Audio)

OPERATOR:  Excuse me, everyone.  We now have our speakers in conference.  Please be aware that each of your lines is in a listen-only mode.  At the conclusion of the presentation, we will open the floor for questions.  At that time, instructions will be given if you would like to ask a question. 

I would now like to turn the conference over to Mr. Paul Stares.  Mr. Stares, you may begin.

PAUL STARES:  Thanks very much.  Good morning, everybody, and welcome to this conference call onPakistan.  Thank you all for joining us.

My name is Paul Stares.  I'm the director of the Center for Preventive Action here at the Council on Foreign Relations.  We're joined by Dan Markey.  Very pleased to have you here, Dan. 

For those who don't know him, Dan is senior fellow for India, Pakistan and South Asia at the Council on Foreign Relations.  Between 2003 and 2007, he was at the State Department in the policy planning bureau working on South Asia, and before that, held various teaching jobs.

Dan, welcome.  Before we get into open Q&A, I thought I'd ask you some just basic questions to get things rolling.  We're still awaiting, I guess, the final tally of the elections held yesterday, but could you just give us your basic assessment of the outcome and what it means?

DAN MARKEY:  Sure.  Well, it's great to be here.

I guess the bottom line is that it looks like a -- what you might call a free and fair rout of President Musharraf's party, the PMLQ party.  This was more free and more fair, probably, than people expected, or else the margin of victory of the opposition parties was greater than people also anticipated, and they were able to overcome whatever residual rigging there was.

But the basic outcome as it looks right now at the national level is that the Pakistan People's Party, Benazir Bhutto's former party, comes away with something around 30 (percent) to 35 percent of the vote.  Nawaz Sharif's party, around 25 (percent), and Musharraf's PMLQ party around 15 (percent).  These are all subject to a little bit of change as the votes continue to trickle in, but that's about where we stand.

And I think what that means is that we're likely to see a very different kind of configuration of power in Islamabad, and that's what we're going to be waiting and listening to in terms of deal-making in the background over the next days and weeks. 

But in terms of the day of the election, I think by most assessments, it went reasonably well.  Numbers of killings were relatively low for Pakistan.  The turnout seemed, by -- I get different stories in terms of the level of turnout, but the last I heard from CNN was something around a 40-plus percent turnout, which is normal by Pakistani standards.  So it's not like it was significantly depressed for fear of violence or was a massive turnout to sort of rock Musharraf out of power just though the vote.  I think it was pretty standard.

And I think if we were to look to see some of the reasons behind why it emerged the way that it did, you know, the ones that tend to get played up here in the States have to do with the lawyers' movement, the protest movement that's been brewing all -- since March of this past year.

Obviously Musharraf's long tenure in a very clearly undemocratic capacity as president and general and then, more recently, the assassination of Benazir Bhutto which, despite the fact that most outside observers and the Pakistan claim was perpetrated by terrorists, still there were a lot of Pakistanis who believed that it was probably -- there was some collusion by the government and I think wanted to express their outrage over that.

But beyond those kind of larger issues, there are some real pocketbook issues that I think got people going, which tend to get less reported here in the States.  But lack of access to energy, electricity, during the day for many Pakistanis, urban and rural alike, turned them against this government, made it less popular.  And also high prices of other basic commodities have really hurt the average Pakistani and made Musharraf and his party much less popular than it was going to be.

So I think those are the things that probably drove this outcome, more than the charisma or popularity of the various party leaders themselves.

STARES:  Now, given the split outcome, how is the power-sharing arrangement going to sort itself out?  There's been reports that Mr. Zardari and Mr. Sharif were meeting today to actually talk about how they might share power in this situation.  How -- what's the likely scenario here?

MARKEY:  Yeah, well, I'm sure the phone lines are burning up and there will be lots and lots of meetings.  And this may be a protracted issue, although it's also possible that they could come together pretty quickly.

I think the primary issues that are at stake here are -- it looks right now that Zardari's Pakistan People's Party, the PPP, is out front, which makes them the kind of presumptive prime minister-makers.  And that means that Nawaz Sharif needs to kind of make deals with them.

And I think that it's possible that they will all come together in a kind of a opposition unity party, at least for some time, and set to removing Musharraf, which is something that they could -- along with some of the smaller parties, that they could do at the center.  They could try and go for a two-thirds majority and essentially roll back Musharraf's changes that he made during emergency rule and essentially impeach him, whether directly impeaching him or actually just turning back some of the provisions, restoring the judiciary and so on, that would effectively amount to an impeachment.

The problem with that scenario -- although I wouldn't discount it being possible -- the problem though is that there is a day after, and in that day after, the Pakistan People's Party and Asif Zardari may not come out all that great.  And Nawaz Sharif may seize the opportunity.  And under those conditions, which are foreseeable, Zardari ends up in opposition himself.  So he may choose to take a slightly more conciliatory approach to form a majority, a working majority at the center that wouldn't necessarily go for the removal of Musharraf in the near term.

But I think that by all accounts this election, this repudiation of Musharraf and his party has weakened him and it's only a matter of time before he's on the way out the door.

STARES:  And you discount the likelihood of Mr. Zardari and Musharraf, General Musharraf, reaching a deal to exclude Mr. Sharif from --

MARKEY:  Well, that's what I mean by it's possible that Zardari will be looking over his shoulder and saying, look, I can make a deal with Nawaz today, then Nawaz may steal my lunch tomorrow, or I can make a deal with Musharraf today and stave off the challenge from Nawaz Sharif for some period of time.

The problem with that second calculation is that the party, Musharraf's party, the PMLQ, could -- it looks like they're disintegrating.  Most of the party leadership lost even their own seats, which was stunning.  And because they lost their own seats, they won't be around to be dealmakers themselves.  And the rest of the party may, in fact, get picked off and split up into -- and join some of the other major parties.  So it could be the end of the PMLQ, despite the fact that they got something close to 40 seats in the national assembly.

STARES:  You mentioned the day after.  There's also the -- sort of the weeks and months after, and the record of civilian rule inPakistan hasn't exactly been distinguished.  And how do you see the likelihood of instability in the medium-, long-term?

MARKEY:  Yeah.  I'm afraid that many people will be looking back at at least the earlier years of the Musharraf regime with some nostalgia after some time, once they experience what could be very much of a circus inIslamabad that's likely to follow.

The level of animosity between these parties is very clear and will not go away quickly.  They will fight tooth and nail for every ministry and assignment within the parliament.  And they will also fight in the provinces themselves in terms of forming governments at the provincial level.

And then when you also add that to the fact that Asif Zardari is renowned for his corruption and doesn't show a lot of remorse for his previous behavior, Nawaz Sharif very clearly as leader ofPakistan and his family and his cronies were also quite corrupt. 

You know, you can say a lot of things about President Musharraf, but he personally was less corrupt than these individuals, and also had a better relationship -- a working relationship with the army, coming out of the army, than they do. 

And that will be another opportunity for a cleavage within Pakistani politics now.  As these civilians are ascendant, the question will be how they relate to the army, and whether they take a relatively mature approach to dealing with army or whether they essentially campaign against it. 

STARES:  Then what does this mean for future U.S. policy?  This is clearly a major repudiation of this administration's support for Mr. Musharraf, but there are some positive outcomes from this election -- not least, of course, that the elections were held with apparently little rigging and little violence, but tell us what this means for U.S. policy and how we should proceed --

MARKEY:  Yeah.  Well, I think first of all, it shouldn't -- I would go back to the point that a lot of Pakistanis voted for reasons that have nothing to do with Musharraf's relationship to the United States.  So that wasn't in the minds of many Pakistanis as they cast their ballots, I'm sure. 

And so that means that there is still an opportunity for the United States to work with whoever emerges in power -- whether it's the PPP or PMLN or so on.  I think eventually there will be a modus operandi reached between them, and I'm sure that they're working hard to do that.  So that's a possibility. 

Also, in terms of a long-term future in the relationship, it is better, of course, to have civilians running the country than to have an army.  It is better to have elected officials running the country, than to have people who came to power from a coup.  So these things are positive. 

And beyond that, the Pakistan People's Party, being a kind of a center-left, relatively progressive party within the country, is more inclined to undertake projects -- at least ideologically more inclined to undertake projects that would hit at the roots of extremism and militancy than even Musharraf's PMLQ was.  So these are all positives. 

The problem, I think, in the near term, is that all of the Pakistani civilian political leaders are going to be very distracted from any issues that have to do with things the United States cares most about, and are probably going to be so focused on political maneuvering that they will really neither devote time nor energy towards treating these problems that we see as being so incredibly urgent. 

So that's a -- that's a trouble.  And beyond that, if you were to see a complete opposition sweep -- in terms of they decide to form a unity government, not only might they go after Musharraf, but they may also try and go after the top leadership within the army, and go for a purge there, which would be more profoundly destabilizing and more troubling from a, from a U.S. perspective, in terms of cooperation on counterterrorism, counterinsurgency, cross-border infiltration, and so on. 

STARES:  One result that seems to be particularly encouraging for theU.S. is the poor showing of the religious parties in the Northwest part of Pakistan.  Could you say some more about that? 

MARKEY:  Yeah, this was something that I had been hearing about for a period of time prior to the elections, and it definitely came true.  The ANP, which is a Pashtun Nationalist Party, with a long history in the NWFP, in the frontier province, really did quite well, and, along with the Pakistan People's Party in the North-West Frontier. 

And they completely swamped the MMA, which was this coalition of Islamist parties.  And they did so for at least two reasons:  One is the MMA split, roughly, in half.  Half the party did not contest the vote, and the other half did.  So it was weakened by that. 

And it was also swamped because the MMA, as the ruling party over the last five years, failed to deliver -- didn't deliver to the more extreme members of its constituency because it didn't actually implement Shari’a law, as it had promised; and it didn't deliver to the average people because it was no less corrupt or more effective than any government that had come before it.  So they were booted out, including the head of the JUIF, Fazlur Rahman -- which is a bit of a surprise that he couldn't even win. 

Now this new government could be, actually, very helpful to theUnited States and to the West, in terms of providing a local face of moderation, one that is inclined to treat problems of militancy and extremism, and work with the international community to do so.  I think they could be a very useful partner for the United Statesas we look to do more in the tribal areas and in that back part of Pakistan.  So that's a -- that's a real positive. 

STARES:  Okay, well that's a good summary and overview, Dan.  Thanks so much.  I think we're going to now open it up to Q & A for those on the line. 

OPERATOR:  Thank you.  At this time we will open the floor for questions.  If you would like to ask a question, please press the star key, followed by the 1 key on your touchtone phone now.  If at any time you would like to take yourself out of the questioning queue, press star 2. 

Once again, to ask a question, press star 1.

And or first question comes from Gary Thomas, from Voices of America. 

QUESTIONER:  Thank you.  Dan, it's Gary Thomas, from VOA. 

MARKEY:  Hi, Gary.  

QUESTIONER:  Hi.  I'm wondering if Musharraf has any room to maneuver left -- given the bad blood between the two winning parties, if he might exploit that, try and drive a wedge between them, and that gives him perhaps at least some move to salvage what's left of his, of his tenure. 

MARKEY:  Yeah, I think that's precisely what he will try to do, and that's also what he's been trying to do.  It was widely reported that some of his top lieutenants had put out feelers, and were having talks with Asif Zardari in the days prior to the elections.  And what he can offer, even with this kind of (a rump ?) PMLQ -- which is about 15 percent at the national assembly, if he can deliver them, and the PPP, conceivably, he could, together with maybe one or two other parties, form a coalition and majority at the center. 

But there is a lot of bad blood also between Musharraf and these other parties.  In Pakistan People's Party, Asif Zardari is already facing a lot of potential for fishers within the party.  Zardari is by no means a recognized leader in the way that Benazir Bhutto was.  And he has to watch his back within the party.  He has to avoid a complete breakdown. 

And one of the figures who he needs to, I think, be especially worried about has achieved national prominence, is Aitzaz Ahsan, this lawyer who didn't actually run for election; has been under house arrest on and off over the past few months; and was very much a leader of the lawyer's movement.  And Aitzaz Ahsan has long enjoyed a prominent place within the PPP, and has been very much in opposition mode towards Musharraf. 

And he, and others like him within the PPP, would not be inclined to want to see the party go -- now work Musharraf and turn away from Nawaz Sharif.  So, there are a lot of barriers to Musharraf playing the PPP angle.  And it's very clear that he can't possibly play the Nawaz Sharif angle.  There's no love there and it's very much a zero-sum game.  One or the other will win.  The other one loses and would have to leave.  And right now it looks like Musharraf is the big loser. 

So it's definitely something that he's trying to do, but the prospects for success, I think -- at least today, look relatively slim, at least in terms of actively forming a coalition.  It's possible that he'll stick it out just simply because he can become less and less relevant to the politics of the country; that both Nawaz Sharif and Asif Zardari will, for one reason or another, decide to turn their guns on each other rather than turning on Musharraf right away; and Musharraf will just sort of cool his heels on the sidelines for some period of time. 

The problem with that scenario is that Musharraf is a relatively powerful president now, at least constitutionally -- and because he's brought, over the past few years he's brought changes in the Pakistani system that makes the presidency more powerful than the parliament.  And I don't think that either Zardari or Nawaz Sharif are going to be very happy to see that persist over much -- over very long. 

So, there are a lot of things that make Musharraf's job pretty tough right now.  And, according to some reports, he's been relatively despondent over, you know, over the past few months.  If things get much worse he may decide that he's just had enough and leave on his own volition. 

STARES:  Okay, thanks Gary. 

Next question. 

OPERATOR:  Thank you.  Our next question comes from Paul Richter (sp), from L.A. Times. 

QUESTIONER:  Hi, Dan.

MARKEY:  Hi, Paul.

QUESTIONER:  The U.S. government has been nervous, to say the least, about Nawaz Sharif in the past.  I think they're worried about his ties to Islamist groups, I guess. 

And I wonder:  Do you expect that to be a difficulty for the U.S. now?  And also, to what extent do you think the U.S. has been reaching out to these other people who will be players now?

MARKEY:  Yeah.  I think the U.S., at least on the ground in Pakistan in terms of the embassy and the various consulates, has been reaching out as a matter of course to all of the various political factions -- including even some of the Islamist parties -- over the past few months.

So they definitely wanted to keep the lines of communication open.  But the Nawaz Sharif angle has been a tough one, because Nawaz has felt so little love from Washington, because Washington didn't do a lot to help him get back into the country when he was in exile, and because they basically had almost no relationship over years while Musharraf was in power.  So that's a tough one. 

And then, yes, you're right.  There are a lot of concerns in Washington about Nawaz Sharif's ties to various Islamists.  And some of these are rumors, some of these are pretty clearly true.  His coalition is, you know, center-right, but at times has looked even further to the right in the Pakistani sense in terms of being closer to militant groups and so on; and has very clearly used the rhetoric -- kind of old-think rhetoric -- anti-India, nuclear bomb, support for various militant operations -- during the campaigning season.  So Nawaz Sharif hasn't done any -- himself any favors in terms of working with the U.S., and yet now he's in a very powerful position.

So it puts Washington in a tough bind.  As I say, they've been reaching out to everyone.  There will be talks with him and with his people.  You know, in past the Clinton administration worked with him.  It wasn't always an easy relationship, but it could be reengineered.  I think the United States would have to work with anyone who actually ends up in power. 

The one thing that I think people here will be most concerned about is the prospect of a real purge within the army and intelligence.  And that's one of the things that I think if Nawaz Sharif really gained power, that's something that he would definitely go for. 

He has a lot of people he sees as enemies.  He's known to be fairly vindictive.  He will go after them in those services and try to remove them. And doing that, I think, would be a setback for Washington -- a significant setback in terms of hurting working relationships, hurting people that Washington has come to trust a bit more and who seem to have a better understanding as to what Washington's trying to do.  So I think that would be a lot tougher.

I think he would take Pakistan in a -- I think he would take Pakistan in an unproductive direction.  So from Washington's perspective, even the PPP under Asif Zardari is probably a better outcome than Nawaz Sharif now.

STARES:  Sharif's links to Saudi Arabia are also emphasized.  Is this something to be concerned about?

MARKEY:  I would be somewhat less concerned about that -- at least at the top level.  I mean, the Saudis have a mixed kind of relationship with Washington too and we can get things from them and work with them at times, and then other times have real difficulties. 

So it's not the official contact, but the unofficial contacts with various prominent Saudi families and wealthy individuals who have a vision of the world that, obviously, in line with what we'd like to see -- not at all progressive for Pakistan.  They would have more influence under him and would try to exert that influence.  I think that would be moving Pakistan in a direction that I think would be dangerous over time.

STARES:  Okay.  Next question?

OPERATOR:  Thank you.

Our next question comes from Aziz Haniffa from India Abroad.

QUESTIONER:  Hi, Dan.  I'm Aziz from India Abroad.

MARKEY:  Hi.

QUESTIONER:  Thanks very much.  You've covered a lot of the questions I had in mind.

But in terms of going back to U.S. policy, what should Washington do?  Should they, in a sense, move quickly, take its time, let things sort of play itself out and then think of what the strategy should be?  And of course, people like Senator Biden, Senator Kerry are out there. And the fact that they have also met with PPP officers like Sherry Rehman and others who came out here. 

Does it help in the sense that perhaps in a democratic dispensation next year that there are people who've already felt the sort of elections play out and they have a sense of what it's all about?

MARKEY:  Yeah.  I think these are all good things.  These are, in terms of the relationships that prominent democratic party leaders have made with Pakistan People's Party leaders.  These are obviously relationships they had for a long time and they've been reaffirmed over the past few months and now after the elections.  I think that's a useful thing to have more contacts, more understanding and these closer ties.

I think that, broadly, in terms of the Bush administration I think they're going to have to be in a bit of wait-and-see mode over the next few days.  There's nothing that hurts a Pakistani candidate like the kiss from Washington.  So I think they will not be inclined to come out publicly to say much of anything, other than if the election monitors endorse the process, I think Washington will get behind that and will -- will have reason to be pleased with the fact that the election day itself went off reasonably well and can definitely support that. 

And the outcome was not a disaster.  It didn't lead to the sweeping victory of anyone who would be deeply dangerous to Washington, but it will complicate things.  And so I think therefore, Washington will want to pull back and sort of keep quiet -- at least at the public level.

Privately, I think at least the embassy and others will want to reach out to these various political parties and really open up channels, so that no matter who ends up on top will be kept in the loop.  I think that'll be a very high priority. 

And then I think if there is any push or any influence, it would be to try to get the Pakistan People's Party to act in a more moderate, constructive way rather than going for a full sweep and removing Musharraf and removing the top level of the army and intelligence and so on, that they try to come to some sort of working arrangement.  But I'm not sure that Washington would necessarily want to do that at this stage.

STARES:  Okay.  Thank you,  Aziz.

Next question.

OPERATOR:  Thank you.  Our next question comes from Azmah Amont (sp) from Pakistan Post.

QUESTIONER:  Yes, hi.

I was wondering:  With the security of the nuclear program, do you think that there's going to be -- it's going to be exclusively under the army control still or there's going to be some civilian government sharing it?

And then, you know, when you say that Nawaz has close ties to militants or extreme -- you know, Islamist groups -- don't you think he would try to do more to show the world that he is committed to fighting extremism there?

MARKEY:  Yeah.

The nuclear program -- that's a really interesting question, because I think it depends on who ends up in that civilian role as prime minister as to what effort they make to try to reassert a certain amount of -- or assert, actually, for the first time some level of control over the nuclear program and authority over it. 

And I think that you would be more inclined to see a more aggressive campaign of that sort from a Nawaz Sharif-type individual -- somebody who is really pushing to assert his authority -- because that's what you saw the last time that he was in power, that he was really trying to kind of bring all levels of national power under him and avoid any kind of independent or professional bureaucratic army of being in some way independent from his power.

So I think -- but somebody like Asif Zardari is, I think, quite unlikely to take the steps that would be necessary to assert his control over Pakistan's nuclear arsenal, primarily because I don't think that that would be a high priority for him.  I don't think that that would be something that he would see as being at the top of his agenda. 

I think he would be much more concerned about issues that relate to domestic politics, issues that would be likely to help him personally in the Pakistan People's Party as an institution in terms of building it up and strengthening it -- pork barrel projects, development projects, education.That kind of spending, control over the budget at the civilian level would be more interesting to him than nuclear politics.

QUESTIONER:  What does the U.S. favor?

MARKEY:  I'm sorry, what's that?

QUESTIONER:  Well, what would the U.S. prefer, you know, U.S. government?  Would it prefer that the army's exclusively in control of the nuclear assets?

MARKEY:  I think what it would prefer is to have a more healthy civil-military balance, and so neither the Nawaz Sharif effort -- that would be one that would try to assert full control in a way that in some ways would be more aggressive and possibly destabilizing, as he experienced the last time around -- nor a hands-off leader like Asif Zardari, who wouldn't actually know how to assert control over the nuclear program, is one that, long term, is going to favor U.S. interests.

In the short term, I think, as I was answering before, Nawaz Sharif poses more question marks, raises more questions in Washington minds than Asif Zardari does.  There's less of a relationship there with Nawaz Sharif, and he has said things that make -- in part he's said them because he wanted to assert his independence and his opposition to Musharraf.

In part he says them because I think that he -- at least his constituents actually believe them, which is very much asserting Pakistani national independence, not appearing to kowtow to American demands.  These are all reasonably healthy things for any country, but they've raised question marks in Washington's mind about what he would actually do.

And that takes me to your second question, which is, wouldn't Nawaz Sharif kind of come around and actually fight the fight against militancy and terrorism to show the world that he's to be trusted?  And I think, to some degree, he certainly would.

I think that his rhetoric, if empowered, would be moderated, that he would step back and start to say -- he has already said sort of things like that the Pakistan Muslim League-Nawaz is against terrorists.  And he would have to take more concrete steps to show that, to demonstrate it.

But I do think it would be like pulling teeth to get him to take more serious actions, because the constituency -- in terms of long-term fighting extremism, building up education, reducing the role of religious groups in actual politics, these are the kinds of things that I think the Pakistan People's Party would be more likely to do, and would still have a problem with -- it's not easy -- and the Pakistan Muslim League-Nawaz would have no interest in doing, because it doesn't suit their constituents, who are more conservative on the whole.

So I think, yes, he would be somebody that eventually would come around and Washington could work with.  There would be some initial hiccups and troubles and hurdles.  And then, over the longer term, it's not clear that he would really be committed to it or that he would just be doing it to essentially curry favor, while in the background doing very little to move Pakistan in a constructive direction.

STARES:  Okay.  Thanks, Dan.

Next questioner?

OPERATOR:  Thank you.  Our next question comes from Francine Kiefer from Christian Science Monitor.

QUESTIONER:  Hi, Dan.  Nice to meet you.  I happened to have to take a phone call right when you were talking about what I was most interested in --

MARKEY:  Okay.

QUESTIONER:  -- which was the tribal areas.  And when I got back on, you said, "Yes, and that party would be the best partner for dealing with the tribal areas."  So I missed what you said.  I think you mean the PPP, but I can't quite tell.

MARKEY:  I was talking about a combination of the ANP, this Pashtun Nationalist Party, and the PPP --

QUESTIONER:  Okay.

MARKEY:  -- because they look like they're poised to be partners in the Provincial Assembly in NWFP, which would be a good thing.

QUESTIONER:  Okay.  And so that was the technical.  My real question is this.  From the vote, can we tell what the Pakistani people want to do in terms of dealing with militants and terrorists?  Can we tell generally what direction the population is moving in in terms of how to deal with this problem?

MARKEY:  The short answer is no.

QUESTIONER:  Ah.

MARKEY:  I don't think we can at all.  I think I would go back to a point I made before, which is Pakistanis, many of them voted on pocketbook issues.  We don't have exit polling, so I'm speculating on this.  But my sense is, if you look at the kind of pre-election polls that were done and the concerns that people voiced, their main concerns had to do with the fact that they get electricity only several hours every day and the food prices have gone significantly higher.  Their wages haven't gone up.  And they look around and they say, "Well, who's to blame?  The incumbents are to blame for that."

Most Pakistanis' lives are not touched as directly by the relationship with the United States or the fight against militancy.  And to the extent that polling over the past few months has shown anything, it's that Pakistanis have actually shifted in terms of not favoring militant groups that used to have at least a residual popularity.

The hit after Benazir Bhutto's assassination -- al Qaeda, for instance, according to some polls, took a massive hit in terms of domestic popularity, which would lead you to think that, in fact, many Pakistanis see their interests on those issues as being more closely related to the U.S. perspective than we might have thought in the past.

But I think those numbers tend to vacillate.  If you get an air strike that kills civilians, then people are angry at the United States.  And if you get an attack on Benazir Bhutto that looks traceable to terrorists, it hurts the militants.  But the elections were fought, I think, mainly on different issues.

QUESTIONER:  Okay, thank you.

STARES:  Thanks, Dan.

Next question.

OPERATOR:  Thank you.  Our next question comes from Paul Eckert from Reuters.

QUESTIONER:  Thank you.

There were -- prior to the election and the crisis, there were moves afoot in Congress to trim aid to the military or refashion the aid.  And I'm wondering if the pressure from this -- now that the election has taken place, does that remove the pressure for those sort of movements, one?  And two, under -- you've had us prepared for a potentially fairly corrupt government, no matter who forms the new government in Islamabad.  Does that lead to the idea of less accountability for U.S. programs going forward than we've witnessed during the Musharraf years?

MARKEY:  Right.  I think, on your first question about whether the U.S. Congress is likely to pull back on some of its more critical conditioning on assistance, probably yes in terms of -- because it seems that Pakistan has crossed the hurdle on the democracy agenda, at least for the elections.  This could be a real step forward.  But, of course, we don't know exactly where the chips are going to fall in terms of what government will actually form.  And so we'll have to wait and see on that.

But I think, yeah, I mean, basically Congress was very worried about having a partner in Pakistan that was a military dictator and was voicing its concern.  And now we won't have exactly that as we look ahead.  In fact, there have been calls, at least from Biden's office, that if Pakistan was capable of overcoming this democratic hurdle, that there should be a dividend, that they should receive significantly increased assistance, on the civilian side especially, to demonstrate that the United States really favors that move.

And this gets at some level of Pakistani history where Pakistanis typically -- the mythology goes that the United States only supports military dictators and that when civilians come into power, we pull away.  The truth is somewhat different than that, but it would be a good idea maybe to send a message that the United States very strongly favors civilian rule.

Now, in terms of accountability and corruption, a lot of the money that had been going to budget support over the past four years has now been turned into programs.  There's greater monitoring and accountability already.  The United States took that step.  I think that may help somewhat in terms of making sure that these programs are actually -- you know, the money actually goes to education institutions rather than just ending up in someone's pocket.

The main problem with corruption, though, in Pakistani is they have a significant amount of national resources of their own, and that's where money can get pocketed; also when they make deals with foreign contractors, the kind of skimming that can go on.  There are a lot of other ways for a government to be corrupt than just to steal foreign assistance.  That, in fact, would be pretty low on the list of ways to do it.

So they don't need us -- (laughs) -- to be corrupt.  And they don't need us to also -- the problem really is not just the corruption itself.  It's not just the stealing of money.  It's the gradual decay in public trust or confidence in our government, which really hurts, because you would want to have civilian democratic administration in Pakistan that inspired trust and made people feel that it was something worth defending.

And unfortunately in Pakistani history, the opposite has been true, and that when the civilians have been sort of ridden out on a rail, everybody has been cheering when the military comes back in.  That's the kind of cycle that we need to hopefully try to avoid in the future.  And that's, you know, one of the fears, I think, that we should have in the back of our minds is that we just repeat this process.

STARES:  Dan, do you see the mix of foreign assistance might change, though, that the relatively low levels of actual development aid would actually increase relative to military assistance?

MARKEY:  Well, yeah. 

I mean, right now in terms of the actual assistance programming, it's 50-50.  And then there's a huge amount of extra money that goes to what -- essentially coalition support funds, which are reimbursements for Pakistani military operations.  But if you look at the actual just assistance, it's 50-50.  It's 300 million (dollars) for military, 300 million (dollars) for civilian.

I think you could see a boost on the civilian side, and I think that actually would send a very positive message.  I'm not sure that the Bush administration will do that --

QUESTIONER:  Mm-hmm.

MARKEY:  -- but you could conceivably see that going into the nest administration.  I think that would be popular here in the States and I think that would potentially give -- assuming that we do get to some stable civilian power-sharing arrangement in Islamabad, that would send a good message there as well.

STARES:  Okay, thanks.

Next question.

OPERATOR:  Thank you.

Our next question comes from Sunny Ephonse (ph) of L.A. Times.

QUESTIONER:  Hi, Dan.  Thanks so much.

MARKEY:  Sure.

QUESTIONER:  This is enormously helpful. 

I want to go back to what you said about the North-West Province and this question of U.S. reaching out.  There's this dilemma, it seems, that on the one hand, it's important for the U.S. to reach out to new players and to be inclusive.  On the other hand, to the extent that the U.S. is seen as endorsing people, it's the kiss of death.

MARKEY:  Mm-hmm.

QUESTIONER:  I'm interested because there seems to be an opening here in North-West Province to have -- to kind of bypass the central government altogether and to have kind of direct connections with local leaders, which certainly has been one of the recommendations, right, that's been made for years.

MARKEY:  Yeah, yeah.

QUESTIONER:  I'm wondering, how does the U.S. balance this and play this to be encouraging and maybe work on things like good governance and anti-corruption programs without really being seen as giving the nod to -- you know, and therefore dooming --

MARKEY:  Mm-hmm.

QUESTIONER:  -- any kind of -- sort of new and democratic alliance that's emerging?

MARKEY:  Well, I think at the local level in terms of the provincial assembly and bureaucracy within North-West Frontier Province, this is actually somewhat easier than at the national level because at the national level, there is a tendency to have rhetoric really become amplified in the national media.  And people pay -- you know, people like President Bush will say things about Musharraf.  The kind of relationships that we're talking about at the local level are much less likely to get attention and can be more focused on the delivery of actual basic services to the people -- can be focused more on building up a bureaucracy and civilian institutions within the province that would be effective. 

And so it's very much more at kind of a working level basis where those ties can be made.  So in many ways, this is a positive.  I'm not sure about the idea of necessarily circumventing the center in terms of a relationship with the province.  Most of the money would still have to, in some ways, get the stamp of approval from Islamabad before it ended up out in the province.  But I don't think that that would necessarily be that hard.  And I think resources, when we're talking about especially programming in the tribal areas, there are a significant amount of resources that are available right now.  Over $100 million has already been sort of slated to go to the tribal areas from Washington for development and other kinds of assistance.  And working with that provincial government will now be much easier because there will be fewer concerns about having that money go to places where we would really find it troubling. 

And now we're kind of making -- we're empowering those local officials and making them more capable of actually delivering to their constituencies.  And if they do a good job, then it's more likely that they will win elections the next time around.  It won't necessarily need to have the flag of the United States on these -- you know, on the resources or any stamp of USAID.  And in many ways, that kind of cooperation can be done more quietly and that's more effective.

STARES:  Okay.  Thank you.

Next question.

OPERATOR:  Thank you.

Our next question comes from Lee Cullem from KERA Television in Dallas. 

QUESTIONER:  Dan, thank you very much.

MARKEY:  Sure thing.

QUESTIONER:  This has been most informative.

You mentioned Aitzaz Ahsan -- the lawyer and the lawyers' movement.  What do you see ahead for that movement and also for the former Chief Justice Chaudhry?

MARKEY:  Right.

I think this is a huge question that is very much hanging out in the wind right now as to whether the lawyers' movement will be rekindled by the success of these opposition parties, and in particular, whether the former chief justice and the other justices that were ousted by Musharraf after November 3rd will be reinstated.  This is a primary aim of Nawaz Sharif.  I think it's very important to recognize that it's not because -- I don't think it's because he's so concerned about an independent judiciary, but because he and everybody else see the reinstatement of the justices as being synonymous with the ousting of Musharraf. So what they're going for is a -- primarily a political goal, but it would have the institutional benefit of reasserting an important part of the judiciary and the -- at some level a more powerful and in some ways, more independent judiciary. 

My concern, though, is that Nawaz Sharif, should he come back into power or his party have a significant degree of power, they've shown no sings of heeding the independence of the judiciary in the past.  And I think this would -- is more of a tactical move on their part than kind of a principled one.  But Aitzaz Ahsan is both a politician -- lawyer.  He is both power-seeking and also principled at some level.  He is deeply liberal in a western sense and I think he has made himself into a very appealing, attractive national figure right now and somebody that may be able to bridge a gap between Nawaz Sharif's party and the Pakistan Peoples Party. 

At the same time, I think he threatens these leaders.  Especially Asif Zardari sees Aitzaz Ahsan as a threat, as somebody who could try and steal the crown of the PPP from the Bhutto line.  And so therefore, there are good reasons to think that Asif Zardari won't want to see Aitzaz Ahsan rise to some point of prominence in the future like prime minister.  So -- but all these things are very much in play and I think we're going to be hearing a lot more from Aitzaz Ahsan over the next few weeks, and I think he's going to try and do everything he can possibly do to ride the lawyers' moment right into the prime minister's office if there's any way he can do it.  And that wouldn't be the end of the world.  It would certainly shake things up and signal a real shift -- a sea change in Pakistani political parties, probably signaling the end of the Pakistan Peoples' Party as we know it if he were to emerge as prime minister. 

QUESTIONER:  Do we have any sense of army views on Mr. Ahsan?

MARKEY:  They're not all that thrilled with him.  He has caused a lot of trouble over the past nine months for army figures in terms of sparking protests and instability.  And he has no credentials that bring him close to prominent army leaders, either.  So there's not a lot of love there.  But I don't think -- at this stage, I think what the Army has signaled more than anything is that for some period of time, they intend to stay out of politics as much as possible and to allow the process to unfold in a way that they're not going to dictate.  So that would -- leaves him with some -- a real opening.

STARES:  Okay.

Next question --

QUESTIONER:  Dan, excuse me.  It's Lee Cullem. 

MARKEY:  Mm-hmm.

QUESTIONER:  -- if I could just ask one more thing.  You said it would be the end of the PPP as we know it.  By that, you mean the ascendancy of the Bhutto family?

MARKEY:  Yes.  And beyond that, it's worth noting that -- so Asif Zardari doesn't enjoy a lot of love from many segments of the PPP.  He's seen as being corrupt, he's seen as having gotten there simply through marriage and not by merit.  But he enjoys a lot of access to the party's wealth, and so he can spread that wealth.  So he has a certain amount of power within the party.  Aitzaz Ahsan is not from Sindh.  He's a Punjabi and therefore, he doesn't have connections -- or strong enough connections -- to the rural Sindh base of the party, which is the real heart of the party.  So if he were to become the leader, it would jeopardize the long-standing ties to rural Sindh and the Bhutto family in general, and could cause a break along those lines. 

You could get a Punjabi PPP and a Sindhi PPP that wouldn't be together, and that's the kind of break that I think Zardari is worried about.

QUESTIONER:  Thank you.

STARES:  Okay, next question.

OPERATOR:  At this time we have no further questions.

STARES:  Okay.  Let me just wrap it up with one final question.  What has been the reaction in India, Dan, to the election?

MARKEY:  Well, so far I haven't seen too much.  I think India, like the United States, is kind of holding its breath.  Up through the past few weeks and months many Indians have been concerned that a return to normal politics in Pakistan would be bad for India, that they had become relatively comfortable with Musharraf, working with somebody that they eventually had reached a kind of a stable working relationship where infiltration across the line of control into Kashmir was much lower than it had been in the past. 

There was clearly a desire on Musharraf's part to, once politics of the country had passed, to get back to trying to come out with a real reconciliation with India, a normalization of relations, some real progress onKashmir.

I think there's probably a concern that a return to normal Pakistani politics will make that kind of action more difficult, rather than easier.  I think Indians had no love for Musharraf when he came into power, but over time saw him as a guy that they could work with because he controlled the army.  And these new Pakistani politicians, the same old faces, they don't have control of the army in quite the same way, so it may ultimately be harder to work with them.  Those are the concerns I've heard. 

I think more than anything, Indians feared a really destabilizing unraveling of Pakistani politics.  And I think if there is anything that's really very positive about election day, it's that it wasn't that and it didn't inspire that kind of -- you know, if we'd seen massive rigging and massive violence, then we would have had opposition parties out in the streets today.  We would have had a clampdown.  We would have had a potential of going back to martial law, and we're not seeing any of that.  I think Indians are probably quite pleased about that.

STARES:  Okay.  Any other final questions?

OPERATOR:  Yes.  Our next question comes from Francine Keifer from Christian Science Monitor.

QUESTIONER:  I have a follow-up on the tribal areas.  Is there a limited amount of time that the U.S. has to work with whatever government is set up on the issue of militancy in the tribal areas before it might be forced to take unilateral action?

MARKEY:  Before "it," being the United States?

QUESTIONER:  Yes.

MARKEY:  Well, I guess it depends on what you mean by unilateral action.  I would say the United Statesis already taking unilateral action.  There's a story in The Washington Post today about the Predator strike on al-Libi in the tribal areas.  So to some extent, that's already happening.

A broader kind of unilateral action in terms of something that looked more like an invasion I don't think is in the cards until or unless we were to see some significant terrorist attack and theUnited States would do that in retaliation.  I think that's pretty far off.  I hope it continues to be far off, and I hope it's not -- it shouldn't be something that's right in the front of what the Bush administration is planning, and I don't think it is.

So I don't think that that's the kind of calculation we need to be thinking about, but again, if we saw a major terrorist attack in the United States or in Western Europe and there were obvious ties back to Pakistan then yeah, that sort of thing would be on the table.

I think even then the United Stateswould be more inclined to use attacks more from drones, from planes, rather than an actual invasion.  This is a very difficult territory to invade, to control, to occupy.  And the questions of exit strategy make it even more daunting.  So I don't think that Americans, except in extreme conditions should be or want to be or are considering that as a real option.

QUESTIONER:  Okay, thank you.

STARES:  Thank you.  Okay, we're coming close to the end now.  Any final questions from anybody?

OPERATOR:  We have two questions in the queue.

STARES:  Okay.  If you could be concise please, since we have to end at --precisely at11:00.

OPERATOR:  Okay.  Our next question's from Lee Cullum from KERA Television.

QUESTIONER:  Thank you very much.

Dan, could you talk a bit more about the economy?  You said that food prices are up; wages are not.  Is the growth rate down?  It was 7 percent last year, 8 percent the previous year.  Is all that over now?

MARKEY:  No.  The growth rate is not -- well, it's not all over.  I think it took a bit of a hit over the past year, primarily because of all the instability, political problems that we've seen over the past year which have hurt investment, hurt the stock market, hurt confidence, to some degree.

But the reasons for Pakistan's macroeconomic success have not necessarily coincided at the micro level, in terms of -- they haven't trickled down.  So you've seen growth rates that -- and a stock market boom that have really helped a sliver of the Pakistani population, wealthy industrialists, businesspeople, stock market investors in Karachi, outside global investors who have gotten into the market.

So at the very top, people have gotten pretty rich under Musharraf and I think they're probably concerned about this political outcome.  But for mass numbers of Pakistanis, that growth rate has corresponded to a high rate of costs on everything going up, everything from bread to rice to cooking oil.  And Pakistanis see that and that's what really hurts them.

And the energy crisis is also a long-term problem in terms of electricity.  There's first of all a problem in terms of delivery and distribution networks within Pakistan, which are antiquated.  But there's also a problem of a massively growing population and a growing economy with not particularly any good access to cheap sources of energy within the country. 

And this is something that Musharraf's government was never able to really deal with effectively over the time that he was in office, and I'm not convinced that a kind of a weak civilian government would necessarily be a heck of a lot better, but it's possible that they'll be able to entice outside investors and make deals with energy companies at the global level that will help them out.

But they need big changes.  They need to build dams, they need to build pipelines, they need to build new electricity grids, all these things before the pressure on -- for average Pakistanis who, as I said, get a few hours of electricity a day, will really be reduced.

QUESTIONER:  Thank you.

STARES:  Okay?  Last question.

OPERATOR:  Our last question comes from Aziz Hanifa from India Abroad.

QUESTIONER:  Yeah.  Paul, Dan, it's just a housekeeping.  Thank you very much, Dan, for the really comprehensive and informative briefing.

MARKEY:  Sure.

QUESTIONER:  I was just wondering where you guys would have the transcript up on your Web any time soon?  It would be of tremendous help.

STARES:  I believe that transcripts are put up.  I'm not 100 percent about that, but we will be able to find out pretty soon.

QUESTIONER:  Okay.  Thanks very much, Dan.

STARES:  Okay.  Well, Dan, thanks so much for a really comprehensive overview.  This has been fascinating, listening to you, and thank you all for joining us this morning.  And we look forward to hearing from you in the future.  Bye-bye.

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