We at the Insider Brief have refrained from chiming in on the issue because there has been far too much disinformation and sensationalism out there clouding the actual story and underlying events. As more information has become available to us, we will briefly try to make heads or tails of the situation in Islamabad.

Our sources report that anxiously waiting Pakistan-watchers can likely expect some major news on Monday. The last time our sources told us to expect “major news,” Musharraf shed his uniform; this time may be a little different. We’re hesitant to speculate that Musharraf will resign due to what we’ve been hearing. The level of leaks and “inside news” emerging from Pakistani and American papers alike is unprecedented – and for good reason. Sources further report that a thorough disinformation campaign is being carried out by Pakistani intelligence agencies (“lafafa” journalism anyone?).

We believe that the campaign may be an attempt to focus the attention of Pakistanis and foreign governments towards the prospect of Musharraf’s resignation, away from the idea that he may be planning something altogether different. Based off chatter we’ve picked up on, we believe that any alternate plans being chalked up by Musharraf and the establishment may relate to the repeal of the National Reconciliation Order (NRO) that absolved the likes of Asif Zardari and Nawaz Sharif of their sins, fabricated or otherwise.

Our rationale is based off the fact that Musharraf allowed for the return and political participation of the late Bhutto, and to some degree the Sharifs, with the understanding that they would play by the rules laid out by the establishment. By pursuing Musharraf’s impeachment, they crossed the line in the sand. Now if Musharraf must go, he will pursue mutually assured destruction, bringing the coalition government down with him.

Ultimately, even if Musharraf does go, it’s of little consequence. As president, his constitutional powers are largely ceremonial – for whatever the constitution’s worth.

Transition Continues as Planned
Effectively having dealt with former Chief Justice Iftikhar Chaudhry, Musharraf’s transition appears to be continuing as planned. The newly revamped Supreme Court has paved the way for Musharraf’s second term as president and now that Nawaz Sharif has returned to Pakistan, the stage is set for the January parliamentary elections. The only remaining unresolved issue is the present state of emergency that is in effect which will likely go soon. Many IB readers will recall that our sources had stated back on November 3rd that Musharraf would remove his uniform, elections would be held, and that the emergency would be short lived.

Taking stock of the present situation — isn’t this what everyone wanted? A civilian Musharraf as president with elections being held in which all major parties are participating? Not to sound like a military regime apologist, the question begs to be asked: was Iftikhar Chaudhry acting in the greater good of the country by sparking a confrontation with President Musharraf? In attempting to push Musharraf out of the public realm entirely, instead of seeking a phased transition, can it be argued that Chaudhry can be blamed for the current state of emergency and curbs on the media?

We’ll leave that for our readers to answer.

A Paradigm in Twilight?
When Musharraf retires from the army this Wednesday, many will begin to question if this is the beginning of the end for the military’s involvement in government. The answer: not by a long shot. We had stated in a prior post that the army is at the center of the Pakistani state and that it will be involved in the country’s governance for decades to come if not in perpetuity. Whether this is right or wrong is not the question — it’s a ground reality.

Heard ad nauseam, the military is Pakistan’s single most organized, popular and powerful institution. It is the only grouping of Pakistan’s major stakeholders that can universally impose its will on the country and bring everyone else into line. As long as Pakistan’s ruling elites — the military, political parties, feudal lords, and business barons — remain at loggerheads with one another over the direction of the nation, the military will remain in the driver’s seat.

Out with the New, In with the Old
Sources also report that President Musharraf has grown weary of the Chaudhry cousins (Parvez Elahi and Shujaat Hussain) and intends on bringing in the Sharif brothers (Nawaz and Shahbaz) to dilute their influence. I doubt Musharraf will entirely rid himself of the Chaudhries — he will need some civilian allies — but instead he will likely marginalize them to the point that they are forced to share power with the likes of Benazir Bhutto and the Sharifs. This is in line with our analysis from September stating that Musharraf wanted a diluted coalition government in place; it would shield him from criticism for being undemocratic, all the while allowing him to carry on his policies unchecked while coalition members would bicker among one another.

Resentment within the Army
We had reported earlier that there was resentment in the Pakistan Army over operations in Swat. Now, we are being told that there is broad resentment among the army’s mid-to-low ranking officers over Musharraf’s handling of Benazir Bhutto and Nawaz Sharif. They are particularly upset that Nawaz Sharif is being allowed to return, after they helped show him the door nearly a decade ago. The discontent over Musharraf’s policies has not spread to senior army leadership, which remains on board, likely understanding the compromises he needs to make in light of international (read: US) pressure. It also doesn’t hurt that they’re all hand picked Musharraf loyalists. Ultimately, this is bad news for Musharraf. The army is his constituency and power base. If his support continues to erode, he could soon find himself out of a job.

Intel Validation
We revealed exactly two weeks ago that the Bush administration, specifically Deputy Secretary of State John Negroponte, had advance knowledge of President Musharraf’s plans of imposing a state of emergency in Pakistan. Today, the Wall Street Journal reported just that — that American diplomats had prior knowledge of the impending emergency.

DECEITFUL DEALINGS EXPOSED?
The Jeddah visit proves to be a very interesting development especially when viewed in the context of the “chatter” that we’ve been picking up on from some of our sources. We’ve consistently heard over the last week that President Musharraf, having won his re-election bid with the tacit support of Benazir Bhutto, is abandoning his deal with her. He is allegedly banking on the Supreme Court to strike down the National Reconciliation Ordinance (NRO) which grants Bhutto, among others, amnesty from pending criminal charges. And while the delegitimized Bhutto will not be returning to Pakistan, Nawaz Sharif will. At the time, this scenario was both highly speculative and implausible for many reasons and as a result, we left it unreported.

The first mention of this potential outcome came shortly after Pakistan Muslim League (Q) president, Chaudhry Shujaat Hussain, appeared at a news conference with Prime Minister Shaukat Aziz early last week saying that the NRO was a ploy and that Bhutto had lost at a political game. Though some knowledgeable individuals claimed that Hussain had been told by Musharraf to say what he did, it was far more likely that the comments reflected an attempt to throw a wrench in the Musharraf-Bhutto deal. It was reasoned that the Chaudhry cousins, who campaigned hard for Musharraf during the recent presidential elections, were trying equally hard to maintain their relevancy.

A few days later however, Musharraf made the suggestion during a TV interview that Bhutto delay her return. This, despite an almost immediate rejection of the idea from Bhutto, coupled with news of the Jeddah trip, led us to question whether there was any credence to what we had been hearing.

COMPULSIONS FOR MOHTARMA AND MUSHARRAF
Having re-evaluated our position, the aforementioned scenario forecast by some of our sources still remains improbable, though not as speculative, as the Supreme Court has agreed to review the NRO.

There is one major reason Musharraf cannot abandon a deal with Bhutto – the United States. The US has a high degree of vested interest in seeing the Musharraf-Bhutto deal come to fruition and has spent a great deal of political capital trying to make it happen. If Musharraf hopes to maintain the continued support of the US government — a major prop for his regime — he must remain committed to a power sharing agreement with Bhutto. There have already been some signs a la State Department commentary signaling that the American government may be distancing itself from Musharraf.

Bhutto on the other hand cannot afford to not return to Pakistan on October 18th as we’ve stated in the past. This is Bhutto’s last chance to return to power and redeem herself. If this window of opportunity closes, she will be relegated in history as yet another failed ruler in Pakistan’s long line of over-hyped disappointments. For her credibility to stay in tact, she must return to Pakistan on the 18th regardless of whether or not the Supreme Court strikes down the NRO.

A FRAGMENTED FRAMEWORK
So where does the Jeddah visit fit into all of this? The delegation likely flew to Jeddah to discuss with Nawaz Sharif the terms of his and/or Shahbaz Sharif’s return to Pakistan. Since his deportation back to Saudi Arabia, the Saudis have kept Sharif on a short leash. If he hopes to leave Saudi Arabia, it will have to be with Musharraf’s consent.

One may question what incentive Musharraf has to allow either of the Sharif brothers to return to Pakistan. The truth is that though Musharraf is beholden to the Americans to make a deal with Bhutto, he doesn’t have to guarantee that she or anyone else is all that powerful. By forcing the PPP and PML(Q) into a coalition government all the while re-activating the PML(N) through the return of its leadership, Musharraf would be creating a fractured political environment with multiple, nearly co-equal players. Under the probable guise of national reconciliation, he would effectively be neutralizing the Chaudhry’s, the Sharif’s and Bhutto by playing them off one another. The very fact that the Jeddah visit was made by Army officials and not civilian political operatives makes us believe that the Chaudhry’s were not to have any say in or knowledge of negotiations with Sharif.

On the surface, it may appear as though Musharraf is conceding power to the country’s politicians, but the reality is that he’s ensuring, with the Army’s backing, that he will remain the single most powerful player in Pakistani politics.

How the Supreme Court acts in the coming days is anyone’s guess. One thing is certain though – Musharraf is proving to be a very deft politician.

Maj. Gen. Taj is a trustworthy ally of Pres. Gen. Musharraf’s and has been considered by many to be up for a promotion in the coming reshuffle. Taj, once Musharraf’s Military Secretary (MS), has accompanied Musharraf through some of the regime’s most significant events. He was flying with Musharraf on that fateful flight from Sri Lanka on October 12, 1999 when the coup was launched and was also in Musharraf’s car during the assassination attempts of 2003. From MS, he was appointed Director General of Military Intelligence (DGMI) and then moved on to become General Officer Commanding (GOC) Lahore before landing his current role at Kakul.

The question then becomes, what of Gen. Kayani? The media has been rife with speculation about Kayani’s next post, oscillating between Vice Chief of Army Staff (VCOAS) and the largely ceremonial post, Chairman of the Joint Chiefs of Staff (CJCS). Sources have also confirmed that though due to retire in October, Kiyani will most definitely be occupying one of the two aforementioned posts. With Musharraf already having announced through spokespeople that he will be stepping down as Chief of Army Staff (COAS) after being elected President, VCOAS may essentially translate into a direct transition to COAS.

Musharraf’s plans to step out of uniform also indicate that the reshuffle of top Army posts is bound to increase in pace. Word that a new DG ISI is being appointed soon reflects that.

AN EXPOSED JUSTICE
Many are expectantly awaiting another showdown between Pres. Musharraf and the Pakistani Supreme Court, particularly Chief Justice Iftikhar Chaudhry, after Musharraf essentially flipped the top judge the finger and deported Nawaz Sharif. Those waiting for a confrontation won’t have to wait for long – but not because there’s going to be a confrontation.

The same sources privy to government plans have indicated that Chief Justice Chaudhry will likely be leaving office soon (”within a month”) as the government intends on bringing to light Chaudhry’s collaboration with Nawaz Sharif and his role in mitigating Sharif’s return. If presented to the public or courts with even a modicum of credibility, such charges can be damning for Chaudhry, who during and since his campaign to be reinstated, championed the independence of the judiciary.

We’re in for a very interesting ride.

Nawaz Sharif’s highly anticipated return from exile on September 10th very quickly dissipated into an anti-climactic return to exile.

In the wake of his deportation, Benazir Bhutto has announced that after nearly a decade in self-imposed exile, she herself will be returning to Pakistan on October 18th. The government has responded by saying she is welcome back but will have to face the corruption charges that await her at home.

Will Benazir Bhutto hold firm to her October 18th arrival date or will she back track as she’s done in the past?

INSIGHT INTO THE DEAL
By very publicly declaring a formal date of return, Bhutto has no choice but to return as announced unless she’s willing to take a severe hit to her credibility and popularity. An astute politician, Bhutto wouldn’t risk announcing a return date, let alone a return, unless she knew it was a safe bet. This alone leads us to believe that Bhutto is confident in the progress of any negotiations between herself and Musharraf.

We’re also inclined to believe that the timing of Bhutto’s return indicates that her and Musharraf have already come to some sort of initial accomodation. Musharraf’s term as President officially ends November 15th, but government officials have stated that Musharraf would be seeking re-election sometime between September 15th and October 15th. Not incoincidentally, Bhutto’s arrival steers clear of that period, allowing Musharraf to focus on being re-elected. These facts, coupled with Mushahid Hussain’s comments that Musharraf will “doff” his uniform sometime after re-election, reveal that perhaps Bhutto has good reason to be confident.

However, there remain some major hurdles between herself and the premiership. Sources in my last post mentioned both the two-term limit for Prime Ministers and the remaining corruption charges as major sticking points in negotiations for a power-sharing agreement. The government’s response, that Bhutto will have to face pending charges upon her return, reinforced that these sticking points still exist. It also represented some serious posturing on Musharraf’s part since Bhutto will be unable to contest elections for any parliamentary seat while there are open charges against her. Knowing the speed at which cases are dispensed in Pakistan and with elections looming, Bhutto may be forced to make some major concessions to Musharraf in order to secure a pardon. Whether Musharraf is willing to grant a pardon at all is another question.

But if Musharraf was willing to drop all charges, a third term for Bhutto as Prime Minister would still require amending the constitution, something the PPP itself cannot undertake alone, either now or even after the next round of parliamentary elections. Enter the “King’s Party” – the PML-Q. With the combined voting power of the PPP and the PML-Q, a constitutional amendment suddenly becomes viable. It additionally raises the specter of a coalition government.

My sources had stated that Musharraf was not about to abandon his “allies” in the PML-Q, notably the Chaudhry cousins. I interpreted this to imply that there was a possibility of some sort of watered down coalition government between the PML-Q and PPP. That interpretation is gaining increased traction as Dawn reported today that Musharraf had directed the PML to hold direct talks with the PPP over a post-election power-sharing “formula.” It will be interesting to witness how the dynamic between the Chaudhry’s and Bhutto unfolds, as neither likely wants to work with the other.

With PPP requests for the import of armored transport for Bhutto declined by customs officials, some well connected individuals have omniously speculated that the Chaudhry’s may seek to assassinate Bhutto. We hope that these speculations remain just that – speculations.

Assassination plots, negotiations, and sticking points aside, there remains another major irritant for a final deal – Nawaz Sharif’s failed return.

SHARIF’S MONKEY WRENCH
Hoping to show up Bhutto, Nawaz Sharif elected to return to Pakistan before her, gambling that Musharraf would not risk another confrontation with the Supreme Court of Pakistan by deporting him. He gambled wrong and was deported to Saudi Arabia. In the process, he threw a major wrench in Musharraf’s plans.

First, he created the potential for another show down between Musharraf and the Supreme Court as the latter decides whether the Musharraf government is to be held in contempt of court. Secondly, he made it increasingly difficult for Bhutto to strike a formal accord with Musharraf without damaging her public image. This was exacerbated by the United States’ perceived role in both the deportation of Sharif and the deal between Bhutto and Musharraf.

We don’t think Nawaz Sharif intended for all this to happen – he’s not that smart. Had he planned for all this, he wouldn’t have ended up in Saudi Arabia where his movement and activities are severely limited. The worst Sharif likely expected was that he would end up jailed in Attock Fort after which the courts or public outcry would grant him reprieve.

Had Sharif shown some patience and political maturity (lacking in Pakistan), he would have waited for Bhutto to return or returned with her, making it very difficult for Musharraf to show him the way back to exile without utterly compromising Bhutto’s public standing.

UNHAPPILY EVER AFTER?
Ultimately, we foresee that Musharraf and Bhutto will successfully achieve a power-sharing agreement. We question however, whether the deal will translate into a stable polity, sustainable development, or democracy.

It is a question that President Gen. Pervez Musharraf and self-exiled former Prime Minister Benazir Bhutto will have to answer soon if they hope to counter the growing momentum of Nawaz Sharif’s campaign to return not only to Pakistan, but to power.

AN UNLIKELY SCENARIO
A decade ago, no one would have believed, let alone foreseen, the political reality that exists in Pakistan today. We are witnessing a Pakistani military dictator seeking political survival through a power sharing agreement with the anti-establishment Pakistan People’s Party, all the while facing off against a faction of the Pakistan Muslim League, once a favored proxy of the military establishment.

Musharraf and Bhutto have been flirting with a political settlement for at least five years now. As far back as November 2002, we learned of meetings between Musharraf’s close associates and aides debating the release of Asif Zardari – Bhutto’s husband – two years before his actual release. And again, at the end of 2003, we received word that Musharraf was readying to send a personal confidante and childhood friend to visit Bhutto in Dubai and initiate parleys by asking in very plain terms, “What is it that you want?”

In those days, Musharraf was negotiating from a position of strength, when the worst of his worries were troublesome Baloch nationalists. Today, he is fighting for his political life and willing to concede ground to Bhutto and her demands.

THE TERMS
Questions, speculation, commentary and criticism have been swirling around the surprisingly public negotiations between the two camps.

The media has speculated that a power sharing agreement between the two would leave Musharraf in control of national security and foreign policy issues and Bhutto with all remaining national issues. Under such terms, the question then becomes, how different would Bhutto’s tenure really be from the neutered prime ministerships of Shaukat Aziz or Zafarullah Jamali?

Others have theorized that Musharraf will take a hardline stance against all opposition and declare a state of emergency. Such a move would be fatal for Musharraf, likely galvanizing his opposition to the point that he would be forced to step down. We like to believe that Musharraf is smarter than that.

Sources close to the negotiations have stated that a deal between Musharraf and Bhutto is inevitable. They also confirmed much of what has been reported in the media already, that there are currently three major sticking points upon which negotiations still continue:

1. The dropping of all charges against Bhutto
2. Bhutto to be allowed a third term as Prime Minister
3. The repeal of the President’s power to dismiss the government

It’s clear why these are sticking points. Not willing to relegate herself to a behind-the-scenes role, like Sonia Gandhi across the border, Bhutto wants the premiership and visibly so. She also wants to remove the presidential power that brought down her government twice.

In Musharraf’s eyes, the latter two sticking points not only require constitutional amendments, but rolling back presidential power would deny him any leverage over Bhutto. And if good governance remains an issue to him, appearing soft on corruption and allowing for a third term would be counterproductive.

Lastly, the same sources said that Musharraf would not abandon the PML-QA or the Chaudhry cousins as they are his “allies.” We’re unsure of what this implies about the future power sharing arrangement, but it does open up the possibility for a coalition government between the PML-QA and PPP. Whether this is a workable, effective or acceptable solution for any of the involved political parties is questionable. For Musharraf, a diluted coalition government may just be what he is looking for. It would shield him from criticism for being undemocratic, all the while allowing him to carry on his policies unchecked while coalition members bicker among one another.

SHARIF’S RETURN
Regardless of what a future power sharing agreement looks like, Musharraf and Bhutto must agree posthaste. Parliamentary elections are looming and more importantly, Nawaz Sharif is due to arrive in Pakistan in a matter of hours.
Once written off, Sharif is quickly emerging as a dark horse in the coming parliamentary elections having maintained a consistently anti-Musharraf stance, defiantly rejecting all calls to adhere to his exile agreement. Pakistanis and Pakistan watchers alike have been apprehensively awaiting Sharif’s potentially explosive return.

Now aboard a flight to Pakistan, sans his brother Shabhaz, Nawaz’s return is promising to be confrontational. Senior officials indicated to us that surveillance has been established at all major airports and routes to jails have been secured. Using “pressure tactics,” they hope to coerce Sharif into leaving Pakistan on his own accord, thereby avoiding the contempt of court charges associated with deportation. Given the unlikelihood of this outcome, officials are also prepared to arrest Sharif, keep him out of the public eye and jail him.

Whether Sharif or his supporters will go quietly remains to be seen.