ID: 139128 1/29/2008 13:36 Embassy Islamabad CONFIDENTIAL ISLAMABAD 000421 SIPDIS E.O. 12958: DECL: 01/22/2018 TAGS: PREL, PGOV, PTER, PK

SUBJECT: MQM LOOKING FOR RESPECT

REF: ISLAMABAD 405 ISLAMABAD 281

Classified By: Anne W. Patterson, for reasons 1.4 (b)(d)

1.  (C) Summary.  The Muttahida Quami Movement (MQM) based in Karachi appears to be transforming itself from a group of thugs to a service-based grass-roots political party. Expecting to win 20-25 seats in the upcoming National Assembly elections, MQM also sees itself as a potential kingmaker in formation of the next government.  MQM wants some respect from the USG for its political development, secularism, and continued support for our policies.  End Summary

2.  (U) Ambassador, Consul General and Polcouns met January 25 with Muttahida Quami Movement (MQM) mayor Mustafa Kamal and hosted MQM leaders Farooq Sattar and Haider Abbas Rizvi for dinner.  Ambassador also met in Karachi with the Pakistan People's Party (PPP) Co-Chairman Asif Zardari (Ref A), the American Business Council, Farooq Hassan, Chief Executive of the Management Association of Pakistan, and former President of the Supreme Court Bar Association Munir Malik (septel).

Young, Activist Mayor ---------------------

3.  (C) At age 36, Mustafa Kamal is a young mayor overseeing an ethnically diverse population of over 16 million people in a city with enormous infrastructure challenges (see also Ref B).  Kamal proudly recounted his rise from modest middle-class roots through the MQM party structure. Upon election, he was told by MQM leader Altaf Hussain that he must be the mayor for ""all of Karachi, not just for MQM supporters.""  Kamal seems to have taken this advice to heart by providing basic water and sewer services to neighborhoods of the Pakistan People's Party (PPP) and others who have long been neglected by their own parties' leadership.  Kamal boasted that Karachi now provides 68% of all GOP tax revenues.

4. (C) Kamal replaced the traditional revenue maker of a land selloff for the elite with new public-private partnerships that lease land to those willing to develop it to expand the city's tax base.  He collected taxes dating back forty years by publishing the names of tax evaders, although he lamented that he had to give the revenue to the federal government before he received his share of collections. He pushed through development of new highways and overpasses to ease traffic congestion and razed houses that encroached on city property to expand public parks.

5.  (C) Ambassador asked why Karachi had such a bad reputation despite infrastructure progress.  Kamal said the PPP under Benazir Bhutto had embarked in the 1990's on a series of extra-judicial killings that exacerbated ethnic tensions in the city. MQM's popularity grew as the population increasingly wanted law and order and protection from violence.  He claimed MQM's disciplined party organization and its practice of delivering services without discrimination was responsible for its growing electoral base. But the bad memories persist.

Don't Ignore Us ---------------

6.  (C) Kamal noted that during the difficult 1990's, the U.S. never condemned the on-going human rights violations in Karachi.  Ambassador said that there had been a perception that MQM was more of a criminal group than a political party, but that we had taken note of MQM's efforts to improve its image and its activities.  Saying that the MQM was now popular and had an expanding power base, Kamal urged that the U.S. ""stop ignoring us.""

7.  (C) Sattar and Rizvi repeated that same 'please don't ignore us' theme during dinner at the Consul General's residence.  They pointed out that MQM was avowedly secular and had repeatedly supported USG policy but was treated like a terrorist group.  In fact, Sattar asked for USG assistance in convincing the Canadian immigration service to stop listing the MQM as a terrorist organization; Ambassador responded that we knew that the Canadian policy was affecting some asylum cases in the U.S. We would examine what might be possible on outreach to Ottowa on this question.

Post-Election Coalition ----------------------

8.  (C) Sattar both defended Musharraf and complained about the Pakistan Muslim League's (PML) continued dependence on feudal politics that the MQM has abandoned.  He noted that MQM had supported Benazir's return, and Altaf Hussain was one of the first to offer Zardari condolences on her assassination.  Still, he made it clear that MQM could work with either a PML- or PPP-led coalition government after the elections.  He predicted that MQM would win 20-25 seats in Karachi, but agreed that plans to expand the party's base had been undercut by blame over the May 12 riots.  Sattar admitted it was perhaps not wise to have organized a countervailing demonstration to the one organized for the former Chief Justice.  But he argued (unconvincingly) that the decision not to intervene and stop the rioting would have caused additional violence.  Sattar pointed out that 14 MQM party members had died in the violence that left approximately 40 dead.

Altaf Hussain Returns? ---------------------

9.  (C) Kamal, Sattar and Rizvi all confirmed that Altaf Hussain had expressed an interest in returning to Pakistan, but this idea had been rejected by the party.  They feared that another assassination attempt would be made and they would be left leaderless.  Nevertheless, while leaving dinner, Sattar indicated that Hussain could, in fact, be induced to return with the right deal for inclusion in a coalition government.  (Note: According to press reports, President Musharraf met with Hussain in London this week.) The National Reconciliation Ordinance signed by Musharraf to give Bhutto and others immunity from prosecution reportedly benefited many MQM members; if Musharraf extends the NRO, this may increase Hussain's willingness to return from self-imposed exile.

10. (C) Comment:  Despite some continuing evidence of thuggery, MQM is making progress in emerging as a popular grass-roots political party, and it clearly is improving city life in Karachi.  As Musharraf's visit to Hussain demonstrated, PML very much wants to keep MQM in its coalition corner.  But the PPP's Zardari (Ref A) also believes a coalition with MQM would be possible.  Like some of Pakistan's other small parties, MQM also sees itself as a possible kingmaker in forming the next coalition government.

PATTERSON?