Pakistani coalition wrangles over president, judges

By Kamran Haider

ISLAMABAD (Reuters) - Pakistan's ruling coalition parties wrangled over the presidency and deposed judges on Sunday, continuing infighting critics say keeps them from tackling rising militant violence and a sagging economy.

The Pakistan People's Party (PPP), the leading coalition partner, said on Saturday the widower of slain former prime minister Benazir Bhutto, Asif Ali Zardari, would be its candidate in the presidential election set for September 6.

The move further annoyed another former prime minister and the chief of the second biggest party in the alliance, Nawaz Sharif, who has been pressing for reinstatement of judges purged by U.S. staunch ally Pervez Musharraf late last year in the face of PPP reluctance.

Musharraf resigned as president last Monday in the face of threatened impeachment by the coalition.

The deepening differences between the PPP and Sharif's Pakistan Muslim League (N) look increasingly likely to lead to a break-up in the six-month-old coalition.

"If they're taking steps unilaterally then what we can do? It looks like the People's Party wants to break ties with us," Sharif's party spokesman, Ahsan Iqbal, said on Sunday.

Sharif wants the post of president stripped of strong powers, in particular to dismiss parliament. But a senior official from Bhutto's party has made it clear that would only be dealt with after the presidential election.

Iqbal said his party's leadership would meet on Monday to decide on a plan of action after the move by the PPP.

A small coalition partner from North West Frontier Province (NWFP) said on Sunday it would support Zardari in the presidential election. The new president will be chosen by Pakistan's two chambers of parliament and four provincial assemblies.

"It's time to keep the coalition intact as the country is facing serious threats of growing militancy and a worsening economy. We have decided to support Mr. Zardari," said Zahid Khan, spokesman for the Awami National Party which leads the government in the NWFP.

SPREADING VIOLENCE, SAGGING MARKETS

As the politicians bicker, militant violence has surged, adding to a sense of urgency for the fractious coalition government to end infighting and turn its attention to security and pressing economic problems.

The violence and political uncertainty, on top of weak economic data, have undermined investor confidence and sent the country's financial markets on a downward spiral.

Pakistan's stocks and currency strengthened when Musharraf stepped down but then weakened as the political squabbling dragged on.

The rupee set a new low of about 77.15 to the dollar on Friday but ended at 76.10/20. Stocks finished 2.4 percent lower.