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171110Z FEB 71
SECSTATE WASHDC 6973
SECTION 1 OF 2 ISLAMABAD
SUBJ : CONVERSATION WITH ZULFIKAR ALI BHUTTO IN
1351, 1360, 1378, 1424.
Bhutto called upon me at Consul's residence Peshawar Friday evening Feb. 13 accompanied
by Mustafa Khar and Hyatt Sherpao. Sherpao, who during political campaign was
violently anti-US and the sponsor of many attacks upon me personally, and was
introduced as Bhutto's trusted lieutenant in the North-West
Frontier Province. Mustafa Khar was likewise characterized as a
trusted lieutenant and I was informed that he would be Chief Minister of the
Punjab Provincial Government, Bhutto said that he had asked them to come with
him to stress the fact that these two men would serve in their respective areas
as the PPP's principal contact for "Mutual Briefings" with US
Throughout preliminary conversation and later in more substantive comments
Bhutto indicated quite clearly that he wanted to "turn over a new leaf' in
his relatiom with the US and pointed out that, as a concrete gesture of good
will on his part. he had refrained from severely criticizing the "new
American adventure in Laos".
Personally, he said, he was opposed to "American policy in Vietnam" and that he could easily be
critical, but as a friend he would attempt to play down his personal views and
not succumb to the considerable pressure from his party to make some public
statements criticizing the United States
action in Vietnam.
In this connection, he said that during the campaign he had tried to minimize
attacks upon the US
and to curtail personal attacks against me. He said that he had
instructions to all of his lieutenants to bear his personal feelings in mind
and refrain from derogatory statements, particularly when they affected me
personally. He was quite jovial in acknowledging that Sherpao had been one of
my principal vilifiers, adding that Sherpao's presence in this meeting
indicated that "that chapter" had now ended. I said that I certainly
hoped that this was true because not only were the charges fallacious, a fact
well known to the leadership of the PPP, but it seemed to me that with all the
problems facing Pakistan, foundationless vilifications would serve no useful
purpose and were viewed not only by my government but by virtually all of the
diplomatic corps in Islamabad as being less than self-serving.
During the somewhat rambling conversation then ensuing, which extended for a
period of an hour and fifteen minutes, the following subjects were discussed.
Devaluation. Noting that Pakistan's
economy was slowed down considerably and that Pakistan's
balance of payments position was becoming critical, Bhutto posed the question
whether or not devaluation would increase Pakistan's exports. I indicated
this question was for economists specialized in international trade and,
further, as the American Ambassador, I was disinclined to answer. However, I
said that, personally, it seemed to me to be a necessary step and, most
certainly would increase West Pakistan's exports and to a lesser extent the
exports of East Pakistan, the jute market
being fairly well stabilized. I added that I hoped his advisers would
concentrate on this subject soonest.
Foreign investments. I pointed out to Bhutto that, like all developing
was sorely in need of private foreign capital and could make little if any
progress in economic development without it. I further pointed out that
potential investors unfortunately were being discouraged by a slow grinding
cumbersome bureaucracy which seemed bent on preventing private foreign capital
coming into Pakistan.
Bhutto, in reply, agreed that private foreign capital was necessary for the
economic advancement of his country and noted that while he was minister of
commerce he had exercised his best effort to attract foreign investments but
had succeeded only in bringing Esso Fertilizer to Pakistan. This was followed by an
extensive discussion of means of attracting private foreign capital and the
areas of interest.
Nationalization. Regardless of the wording of the manifesto, Bhutto insisted
that the PPP did not intend to institute sweeping dramatic reforms of the
private sector. He said that the party program was aimed at redressing some
legitimate grievances and at this juncture showed intense displeasure towards
the "entrepreneurs" of Pakistan, calling them
"callous cannibals" who were thriving on the misery of the people. He
said it was most unlikely that they could be influenced toward a greater
interest in the common man and that, hence, the government would have to go
around them in an "end run". He added that some measures which would
be taken might be economically unsound over the long pull but they had appeal
at the present and the psychological climate among the voters was such that the
PPP had no other choice. At any rate foreign investors should not be inhibited
by the "mild forms of nationalization" contemplated by the PPP.
Bhutto added that, to give his ideas some term of reference understandable to
the American investor, he contemplated changes somewhat in keeping with the
reforms instituted by Pres. Roosevelt during the latter's first two terms.
Department of State
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171137Z FEB 71
TO SECSTATE WASHDC 6974
AMCONSUL DACCA AMCONSUL KARACHI
SECTION 2 OF 2 ISLAMABAD
unity. Bhutto made a special point of recalling that part of the Karachi conversation which dealt with US policy concerning
the unity and integrity of Pakistan.
He said that he fully understood and appreciated the US
position and that, regardless of propaganda to the contrary, he did not doubt
that what I had told him continued to be the policy of the US.
Nevertheless, he said he was wondering what would be the attitude of the US if the PPP
could not agree on a "Modus Vivendi" with the Awami League on the
constitution. I told him that it should be obvious to all concerned that
Pakistan belongs to its people and how its people decide to orgainze the nation
and deal with its multitude of problems was their business, nevertheless, I
wanted him to know that the policy of the US has been and continues to be that
of supporting the independence, unity and integrity of Paksitan.
Convening the National Assembly. Bhutto said that he was agreeable to convening
the National Assembly in accordance with the call of the President. He said
that nonetheless he would have preferred additional time. He noted also that he
had told Sheikh Mujibur Rahman that he would not be ready for a call by Feb. 15
as proposed by the Awami League leader. Bhutto said that the reason for this
was that the PPP had to coordinate a program of action with four provinces and
that the situation in the West was greatly different from that which prevailed
in the East wing, where Mujib was swept into power on a unified program. FYI
Inasmuch as Pres. Yahya had announced the March 3 convening of the National
Assembly several hours prior to the instant conversation, and inasmuch as the
subject was being
by Bhutto later in the night, it is reasonable to assume that the PPP Chairman
was knowledgeable of the decision at the time he made the foregoing comments.
The Northwest Frontier Province.
Bhutto said that in his talks with Qaiyum and Jamiat Leaders he had stressed
PPP neutrality in the present struggle for the formation of the provincial
government. Jamiat leaders, Mufti Mahmood and Maulana Hazarvi, had indicated
that they wished to lead a coalition Government, but, Bhutto said, the PPP was
not interested in promoting "merchants of medieval nostrum".
Political expediency dictated cordial relations with the Maulanas but there was
little hope for any working arrangement with Jamiat. The position of Wali Khan
(NAP) in the Frontier, Bhutto went on, would be determined by his position in
the National Assembly. If the NAP leader gave his unqualified support to the
Six Points, he would have insurmountable difficulties in forming a Government
in the Frontier. On the other hand, if Wali accepted the Six Points with
reservations, his chances in the Frontier would be enhanced but he would lose
the three Baluchi seats controlled by Bugti, the unreconstructed separatist of
Baluchists. Bhutto concluded by saying that the political situation in the
Frontier was very unstable and that the solution might lie in new elections. If
such elections were to be held, the PPP had an excellent chance of improving
its standing considerably.
Comment: The referenced telegrams contain general comments on the foregoing
matters, eliminating the need for repetition.
The American Papers- Secret and Confidential India.Pakistan.Bangladesh
Documents 1965-1973, The University Press Limited, p.490-493