PESHAWAR, Pakistan — America's key ally in the fight against al Qaida and the Taliban plunged deeper into turmoil Wednesday after its Supreme Court disqualified popular opposition leader Nawaz Sharif from running for parliament.
The ruling threatens to trigger a new political crisis that could paralyze the government and push Pakistan to the brink of collapse as the nuclear-armed country battles an economic collapse and a sustained assault by Islamic extremists.
Pakistan's stock market dropped 5 percent as investors panicked, and analysts said that conflict between Sharif's Pakistan Muslim League and President Asif ali Zardari's Pakistan People's Party could produce a repeat of the 1990s, when their political parties repeatedly toppled each other's governments until the military staged a coup in 1999.
"The future of democracy will be in serious question," said Hasan-Askari Rizvi, a political analyst in the eastern city of Lahore. "The (Zardari) government will find it difficult to cope with governance issues because political survival will be the main consideration for them."
"Pakistan faces dire economic and security threats that threaten both the existence of Pakistan as a democratic and stable state and the region as a whole," the Atlantic Council of the United States, a Washington-based policy institute, reported Wednesday. The report recommends an additional $4 billion to $5 billion in aid to Pakistan.
The new instability comes as the Obama administration is asking Islamabad to take more aggressive action against Islamic militants, and it complicates the administration's nearly completed review of U.S. policy toward Afghanistan and Pakistan.
In Washington on Wednesday, CIA Director Leon Panetta said he'd expressed concern to a visiting high-level Pakistani delegation that the Zardari government's recent deal with Islamic militants in the strategic Swat Valley "represents a retreat in terms of the war on terrorism." The Pakistanis assured him that the Swat region "is a special situation," he said.
Panetta deflected concerns in Pakistan and elsewhere that U.S. missile strikes against al Qaida might destabilize the country. "This is a very sophisticated enemy we're dealing with," he said. "I don't think we can stop. . . . Because they're not going to stop."
The Pakistani Supreme Court ruled that Sharif couldn't run for a seat in parliament because of an old criminal conviction, dashing his ambitions for a third term as prime minister. Sharif isn't a member of parliament, as a previous ruling barred him from running in the elections last year, a prohibition he'd hoped that the Supreme Court would overturn.
The judges also disqualified Sharif's brother Shahbaz Sharif, the head of the Punjab provincial government, forcing him to quit the job. Angry demonstrations broke out across Punjab, the country's richest and most populous province — which had been ruled by the Sharifs' Pakistan Muslim League — with tires set ablaze and posters of Zardari torn down and burned.
"The nation should rise against this unconstitutional decision and this nefarious act of Zardari," Nawaz Sharif told a news conference in Lahore. "People can work out for themselves whether this was the judges' decision or Zardari's."
Zardari imposed emergency rule in Punjab for two months, meaning that the province will be governed from Islamabad. In Pakistan's federal system, ruling Punjab is sometimes considered more important than controlling Islamabad, the nation's capital, and Nawaz Sharif used his Punjab power base in the 1990s to undermine and eventually oust Pakistan People's Party governments.
Zardari's party will try to garner enough support from other parties in the Punjab parliament to form its own government there.
Polls have shown that Sharif is, by far, the most popular political leader in Pakistan, while Zardari's ratings are poor. Zardari is gambling that he can contain the fallout from the court ruling, which his party said was an independent decision.
"Neither the president nor the federal government had anything to do with the Supreme Court verdict today," said Farhatullah Babar, Zardari's spokesman. "The PPP is not happy with the verdict, but it also cannot do anything about it."
Zardari, however, provoked controversy when he retained high court judges whom former military ruler Gen. Pervez Musharraf had appointed and who were accused of being subservient to Musharraf.
Sharif has championed the cause of an independent judiciary and had refused to appear before the Supreme Court. His party and a pro-judiciary movement led by lawyers already had planned to march on Islamabad next month, calling for the restoration of the chief justice whom Musharraf fired in 2007. That march now could prove incendiary.
"In our history, whenever the political class have got into a confrontation with each other, it has hurt democracy and it has hurt the country," said Shafqat Mahmood, a newspaper columnist and former member of Pakistan's upper house of parliament.
Analysts think that throwing Sharif out of the political system opens the door to army rule again. Democracy was restored in Pakistan just a year ago, after eight years of military rule under Musharraf.
"Both sides (Zardari and Sharif) will now have to go to the army's doorstep, looking for support," said Ikram Sehgal, an analyst based in Karachi. "We're up the creek without a paddle."
The army, now led by Gen. Ashfaq Parvez Kayani, who's on an official visit to the U.S., has shown little appetite for stepping into the government so soon again, though there's feverish speculation that the military may intervene behind the scenes.
(Shah is a McClatchy special correspondent.)
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