Cracks in Pak coalition day after Musharraf quits

Coalition leaders, who campaigned against Musharraf, met for several hours to set about tackling pressing economic and security problems and to discuss a new president but got bogged down over the fate of judges Musharraf purged last year. The bickering and prospects of more to come are likely to dismay investors and allies.

The two main coalition parties, PPP and PML-N, were bitter rivals through the 1990s when Bhutto and Sharif served alternating terms as prime minister. Analysts have said opposition to Musharraf bonded the old rivals and his departure could see them drift apart.

Former Prime Minister Nawaz Sharif, who heads the second biggest party in the coalition, has been insisting the judges be restored to office.

But the party leading the coalition, that of assassinated former Prime Minister Benazir Bhutto, has wavered, partly because the deposed chief justice might take up challenges to an amnesty from graft charges granted party leaders last year, analysts say.

Leaders of two small parties in the four-party alliance played down the failure to reach agreement but said they had been given three days to resolve the problem between the big parties.

“We have been assigned to reach a consensus on the situation within the next 72 hours and play our role in finding a final solution,” Fazal-ur-Rehman, leader of a small religious party, told reporters. He declined to elaborate on the disagreement.

Prolonged wrangling over President Musharraf’s position before he quit had already hurt financial markets in the country of 165 million people, raising concern in Washington and elsewhere it distracted from Islamabad’s efforts to tackle violent militants.

Musharraf’s resignation lifted Pakistan shares and the rupee on Monday and again on Tuesday when stocks jumped as much as 3.2 percent as investors cheered an end of political uncertainty over Musharraf quit.

But concern about the weak economy pared gains. The rupee strengthened as much as two rupees against the dollar in early trade but slipped to close at 74.53/60 compared with 75.30/45 on Monday.

Investors said Musharraf’s resignation removed a hurdle in politics, but markets were now waiting to see if the government could rule effectively and tackle economic problems.

Bomb Attack

Security is also a huge problem, as the suicide bomb attack at a hospital in the town of Dera Ismail Khan illustrated.

The bomber struck in the compound of the hospital as members of the Shi’ite Muslim minority were holding a protest against the killing of a leader earlier in the day.

Pakistani Taliban claimed responsibility. Elsewhere in the northwest, 20 militants were killed in a clash, the government said.

With the coalition partners’ preoccupation with Musharraf out of the way, the United States and other allies will be keen to see the government concentrate on fighting militants.

Even though Musharraf’s buy-in to the US-led war on terror was unpopular, the coalition government has assured Washington it too wants to control militants, who have provided refuge for Taliban and al Qaeda elements near the border with Afghanistan.

President George W. Bush said he appreciated Musharraf’s efforts to deal with the problem.

Both US presidential candidates, John McCain and Barack Obama, stressed on Monday the need for Pakistan to focus on security now that the question of Musharraf’s presidency had been dealt with.

However, divisive questions still hang over Musharraf’s future. There was no announcement on Monday on whether he would get immunity from prosecution and be allowed to live freely in Pakistan.

Sharif, the Prime Minister Musharraf ousted in 1999, has insisted he face trial for treason. Bhutto’s party says parliament should decide.

Law Minister Farooq H. Naek told reporters there had been no resignation deal with Musharraf. “He resigned himself and as far as his accountability is concerned, coalition partners will decide,” Naek said.