Pakistan’s Ruling Coalition Selects Ashraf as Premier

Pakistani lawmakers elected Raja Pervez Ashraf, a former minister, as successor to Prime Minister Yousuf Raza Gilani, who was ousted from his position by a Supreme Court ruling earlier this week.

Ashraf, the candidate nominated by President Asif Ali Zardari’s ruling alliance, received votes by 211 members of the National Assembly, the lower house, in Islamabad yesterday, Fehmida Mirza, speaker of the house, announced in proceedings telecast by state-run Pakistan Television. He needed 172 votes to win.

Pakistan’s new leader, who will run the government and federal cabinet, will face the challenge of improving ties with the U.S. and tackling a record energy crisis that has caused social unrest and closed factories. The prime minister may also have to pursue corruption charges against Zardari or risk meeting the same fate as Gilani, who this week became the nation’s first premier to be removed by a court ruling for failing to open graft cases against the president, who is head of state and commander-in-chief of the armed forces.

“He is a compromised choice amid very tough political bargaining with the coalition partners,” Rashid Khan, a professor of politics and international relations said by phone from the University of Sargodha in central Pakistan. “His widespread perception is that he is incapable of dealing with the massive problems the country is facing. He failed to resolve the country’s worst energy crisis while he was the minister.”

Cabinet Ministers

Ashraf was administered an oath by Zardari soon after the vote and appointed 38 ministers to his cabinet, Pakistan Television reported. Hina Rabbani Khar and Abdul Hafeez Shaikh, who were foreign and finance ministers respectively in Gilani’s cabinet, were reappointed, the broadcaster said, adding portfolios haven’t yet been assigned.

Pakistan Muslim League-Nawaz, the main opposition, had nominated Mehtab Abbasi as its candidate for premier who got 89 votes and Maulana Fazl-ur-Rahman, a religious party leader, withdrew from the race just before the vote.

“We are standing at a critical juncture and to strengthen democracy, Pakistan needs free, fair and transparent elections,” Ashraf said in a speech to lawmakers after being elected. “I appeal to the opposition to join us in making this a reality.”

A four-year clash between the government and judiciary has rocked an administration that’s aiming to be the first elected Pakistani regime to serve a full five-year term. Elections are due in the year ending June 2013, Syed Khurshid Shah, a senior official of the ruling party told reporters in Islamabad yesterday.

Former Posts

Ashraf, 61, a member of the National Assembly from Rawalpindi, has served as minister of water and power and information technology since he was elected in 2008. He was the chairman of Social Action Program initiated by slain Benazir Bhutto during her second term as the prime minister.

The Supreme Court in March ruled that the country’s National Accountability Bureau should initiate corruption probe against Ashraf and other officials for violating rules while granting licenses to private electricity companies during his term as minister for power.

The Karachi Stock Exchange 100 Index, which has climbed 21 percent this year, rose 1 percent to 13,730.82 yesterday. Pakistan’s rupee, which has dropped 5 percent this year, shed 0.2 percent to 94.54 to the U.S. dollar.

Pakistan’s low investment is compromising its future growth potential and energy shortages have economic and social costs, the central bank said in a report on the economy yesterday.

External Payments

The nation’s external payments position is under strain from a rising trade deficit and declining capital inflows, Moody’s Investors Service said in a report on June 21. Domestic political uncertainties add to vulnerabilities, according to the report.

The government is struggling to revive an economy hurt by the fastest inflation in Asia and a power shortage that has led to violent street protests across the Punjab province this week. It’s also seeking to mend ties with the U.S. that are critical to stabilizing neighboring Afghanistan.

“For us, Kabul is the most important capital in the world and until there is peace in Afghanistan, there can be no peace in Pakistan,” Ashraf said in his speech. “With the U.S. we will work to establish ties as equals.”

The ruling alliance nominated Makhdoom Shahabuddin yesterday just before a judge ordered his arrest as part of a drugs probe, forcing his withdrawal from the race.

Illicit Trade

A judge of the anti-narcotics court ordered Shahabuddin’s n arrest in a case allegedly involving the illicit trade of ephedrine, Waseem Qureshi, a special public prosecutor said by phone from Rawalpindi on June 21. The anti-narcotics force is investigating whether Shahabuddin authorized an illegal permit for two pharmaceutical companies to import ephedrine during his term as health minister in 2011. The case, which also involves Ali Musa Gilani, the former premier’s son, is being supervised by senior judges headed by Chief Justice Iftikhar Muhammad Chaudhry.

Pakistan’s most senior judges convicted Gilani, 60, of contempt of court on April 26 for failing to act on an earlier order to pursue corruption investigations against Zardari in Swiss courts. Gilani’s lawyers failed to convince judges that the constitution grants the president immunity from prosecution while in office.

Negotiating with political parties to stay on as a civilian president, former military ruler Pervez Musharraf in 2007 decreed an amnesty to halt corruption probes against 8,000 politicians and officials, including Zardari and his wife, Bhutto.

The Supreme Court in 2009 ordered the government to formally ask Swiss authorities to revive cases there against Zardari and Bhutto, who was assassinated at a political rally.

To contact the reporter on this story: Haris Anwar in Islamabad at Hanwar2@bloomberg.net;

To contact the editor responsible for this story: Peter Hirschberg at phirschberg@bloomberg.net

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