Asia Crisis

Fresh political violence kills 17 in Karachi

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KARACHI, Feb 1 (Reuters) - At least 17 people have been killed in three days of political violence in Pakistan's commercial capital Karachi, police said on Monday.

Karachi police chief Waseem Ahmed said the violence erupted on Friday, when activists of the Muttahida Qaumi Movement (MQM) clashed with those of the Awami National Party (ANP).

Both the MQM, which dominates Karachi, and the ethnic Pashtun ANP are in a coalition led by President Asif Ali Zardari, who is already under presssure from a raging Taliban insurgency, the possibility that some of his aides will be prosecuted under revived corruption charges and a troubled economy.

While investors in Pakistan have got used to almost daily Islamist violence in the northwest, bloodshed in Karachi has a more direct impact on financial market sentiment.

"At least 17 people have been killed in three days," Ahmed told Reuters.

An International Monetary Fund loan package of $7.6 billion agreed to in November 2008 helped Pakistan avert a balance of payments crisis and shore up reserves. The IMF increased the loan to $11.3 billion in July last year.

About 67 people have been killed in political violence in Karachi since the start of 2010, according to police. Gangsters and the drug mafia have taken advantage of the tension, officials say, increasing the chances that violence could get worse.

Karachi has been largely been free of Islamist violence over the past couple of years, but a bomb at a minority Shi'ite Muslim procession in late December fuelled concern that the militants were expanding their fight to the city.

The city of around 18 million is home to the central bank and main stock exchange and is also the country's main industrial base. Pakistan's two main ports are in Karachi and most foreign companies investing in Pakistan have offices there.

It is also a major transit point for military and other supplies to Afghanistan for the U.S.- and NATO-led anti-insurgency effort, and any trouble can directly affect those supplies. (Editing by Michael Georgy) (For more Reuters coverage of Afghanistan and Pakistan, see: