May 30, 2008 Classified By: Anne W. Patterson SUMMARY: On May 26, Codel Schiff — US Representatives Adam Schiff and Allyson Schwartz — met Pakistan People's Party (PPP) Co-Chairman Asif Zardari, Foreign Minister Shah Mehmood Qureshi, NSA Ambassador Mahmud Ali Durrani and Ambassador-designate to the US Husain Haqqani. Zardari thanked the Codel for USG (US government) support of credible national elections. As he has previously, he committed Pakistan to the war on terror, insisting this was Pakistans fight. He argued more needed to be done by the US and international community to promote economic development in the Frontier (Province).

Building on that point, Zardari suggested a new blend of USG assistance, increasing aid to “civilian forces” like the police and promoting civilian engagement. He warned that public opinion was unalterably against President Pervez Musharraf and that, for the sake of the new GOP, (government of Pakistan) Musharraf needed to contemplate an “honorable exit”.

“WE ARE BECAUSE OF YOU”

Meeting May 26 in Islamabad, US Representatives Schiff and Schwartz met with PPP leader Zardari and his foreign policy team. Zardari thanked the USG for its support of credible parliamentary elections, which brought his party to power: “We are here because of you.”

Zardari noted that his late wife, Benazir Bhutto, maintained close relations with many members of Congress, and he encouraged more codel visits to Pakistan to improve mutual understanding.

PAKISTAN'S WAR: As he has before, Zardari stressed that the Global War on Terror (GWOT) was “Pakistans war” The fall of (Benazir) Bhutto's second government was financed by Osama bin Laden, he claimed, noting that she and her father Zulfiqar Ali Bhutto were assassinated by religious extremists.

But counterterrorism initiatives lacked popular Pakistani support, Zardari lamented, and terrorism fostered profiteers who had an interest in the struggle continuing.

Zardari argued that Pakistan Muslim League-N (PML-N) leader Nawaz Sharif had “walked into the vacuum” as opposition leader when Bhutto was assassinated just weeks before national elections. For stability, however, the PPP continued to cooperate with the PML-N at the federal and Punjab provincial levels.

Zardari described the general distrust of the US by the public and in political circles, “fearing you will leave us again.”

Post 9/11, however, he believed this was no longer an option; the USG would have to make a commitment of decades, calling for a Marshall Plan for Pakistan. There were already success stories, noting that his progressive PPP even won a National Assembly seat from the Federally Administered Tribal Areas (Fata).

Zardari advocated attacking the root cause of radical insurgency: economic under-development. He lobbied the Representatives to quickly take up and pass reconstruction opportunity zone (ROZ) legislation. There should be US tax breaks for companies producing “made in Pakistan products, noting that Pakistans textile industry would be more competition to other countries than to US manufacturers.

Without creating more jobs, Pakistan just could not match the Taliban's reported USD 300 per month to tribals in the frontier regions. The tribals, though, wanted peace, Zardari claimed.

A New Blend: Asked if he felt USG assistance over the past seven years had been military heavy, Zardari noted that democracy promotion had been the smallest component of aid. He quickly added that military aid was still badly needed but more should also go to “civilian forces”, e.g., police.

USG assistance should support social development, e.g., more higher education scholarships to Pakistanis studying in the US All in all, he wanted to see more civilian engagement than military-to-military exchanges.

Zardari also said he wanted the UN (with support from the US and other western countries) to establish a compensatory fund for the families of the victims of terrorist acts.

Codel Schiff did not clear this cable.

PATTERSON

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