Sharif Quits Pakistan Coalition, Setting Up President Contest

Via Bloomberg -

Nawaz Sharif, head of Pakistan's second-largest party, quit the six-month-old ruling alliance, setting up a fight with Pakistan Peoples Party leader Asif Ali Zardari over who will replace Pervez Musharraf as president.

"We have been forced to take this decision, which we take with great regret," Sharif told a news conference in the capital, Islamabad, today after meeting senior party leaders. "Zardari pledged in writing to reinstate the judges within one day of Musharraf leaving."

Zardari reneged on several pledges to reinstate judges fired by Musharraf and to nominate a presidential candidate from outside the main parties, Sharif said. His party nominated former chief justice Saeed-uz-Zaman Siddiqui to run for head of state in the Sept. 6 presidential election.

Zardari, widower of former prime minister Benazir Bhutto, will need support from smaller parties including the Mutahidda Qaumi Movement to ensure the majority needed to win the parliamentary vote for president. Sharif's departure removes an opponent to military action against extremists as the government today banned the Pakistani Taliban after a string of suicide attacks.

Sharif's withdrawal "won't cause the government to fall but the PPP will fight for stability because it will be dependent on smaller groups," said Khalid Mahmud, a research analyst at Institute of Regional Studies in Islamabad. "Even without the support of the Muslim League, the PPP can elect its president."

The PML-N "won't try to bring down the government," PPP spokesman Farhatullah Babar told GEO TV in a telephone interview. "The coalition was in the interest of the nation."

The benchmark Karachi Stock Exchange 100 index, which has declined 30 percent this year, has lost 10.5 percent in the last four sessions. The rupee, which has shed 24 percent this year, declined to a record low of 76.68 to the dollar today.

Pakistan Muslim League-Quaid-e-Azam, which backed Musharraf, will announce its presidential candidate today, parliamentary opposition leader Chaudhry Parvez Elahi told reporters in Islamabad.

Sharif's Pakistan Muslim League exited the alliance a week after forcing Musharraf out. Differences between Zardari, 52, and Sharif, 59, have stalled the work of Pakistan's government as it tries to tackle a slowing economy, faster inflation and increased terrorist violence.

"These repeated defaults and violations have forced us to withdraw our support from the ruling coalition and sit on the opposition benches," Sharif said. "However, we will play a constructive role."